Jim Cramer fills his blog on

RealMoney

every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week, when he wasn't

rapping with longtime foil James "Rev Shark" De Porre in their first-ever meeting, he blogged on:

  • tipping the shorts' hand;
  • tech's return; and
  • what you have to tolerate in this market.

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, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.

Know the Stocks Where Shorts Lean Too Hard

Originally published on July 9 at 11:45 a.m. EDT

Many stocks simply can't handle their short positions. There are just too many shorts in the stocks, and the result is that you get these dramatic moves that astonish people. Nowhere is this inability to handle short positions more prevalent than in solar, dot-com and footwear stocks, which are all viewed as fads that are about to fall apart.

I think people mistakenly believe that unless there is a gigantic short position, equal to half or two-thirds of the float, the levels where the stocks actually trade are irrelevant. That's just plain wrong, as the shoe stocks show.

Before I go into this theory, I want to be clear: No one should buy any stock just because its short position is big. Often the short-sellers are very right, longer-term. But the mechanics of shorting are so hard and so biased against the shorts that you can see some elaborate moves against them. That forces them to cover and can give a stock more lift.

That said, take a look at

Deckers

(DECK) - Get Report

and

Crocs

(CROX) - Get Report

, two stocks that are front and center in the footwear move.

Crocs has a total public float of 62 million shares; 20 million are being shorted. That short position is just way too big, and unless Crocs shows an immediate and utter slowdown, you can't expect the stock to get hit.

Plus, if this company is the next

Nike

(NKE) - Get Report

, which I keep hearing, then Nike should just buy Crocs. It could, Nike's that big.

I don't know what I would do if I were short Crocs. The short crowd on that name is so big that I'd be fearful of a 10-point gain in this stock on good news.

Deckers Outdoor has a smaller position, 2.2 million shares, but its float is only 12 million. Again, given Deckers' stellar earnings growth, the shorts just can't manage that position. Too many shorts will panic and cover because Deckers is not ready to slow down yet. Good news could send that one up maybe 20 points, given that position.

Under Armour's

(UA) - Get Report

another footwear and, of course, sports apparel stock. Amazingly, this company's float is a whopping 33% short. That's just nuts. Sure, the stock is

expensive

(so is Crocs) but the momentum is here and, like Crocs, everywhere you go you see people wearing Under Armour.

That's deadly for a short-seller, because it means the public will keep buying this stock. There's simply no real way to make money if you are short unless Under Armour collapses and misses numbers, but tellingly it already did and the stock went down -- and came right back up. The stock can't handle the short.

Or how about

Amazon

(AMZN) - Get Report

? Here there are "only" 46 million shares short on the float of 304 million. But that could be enough to cause a panic if Amazon delivers the same growth and improve gross margins when it reports earnings. There are too many potentially panicky shorts here on any good news.

Finally, consider

First Solar

(FSLR) - Get Report

. A quarter of the float is short. The company is enjoying a constant good news flow as long as oil goes higher. There are so many companies that want to go green and this company, a profitable one, is benefiting. Meanwhile, the shorts panic and the retail investors go nuts on every press release. So you get these kinds of exaggerated moves.

Unless you understand the difficult mechanics of short-selling, you will miss these moves over and over again. You must recognize that the short itself can't propel a stock. But it can easily exaggerate the move in either direction. (Remember how Under Armour dropped on bad news? That was more shorts piling on and knocking the stock down.)

You can spot some of these moves by going to

Stockpickr which regularly profiles

stocks with big shorts that have insider buying. But you can also find them simply by looking at exaggerated moves and checking the short position.

Until you see a big decline in the short positions or a dramatic increase in the float through secondaries, you are

not

going to get these stocks to come in and they will continue to go higher, in a sudden and vicious way, on any good news.

At the time of publication, Cramer was long Nike.

Tech Is the Sector to Shop In

Originally published on July 10 at 7:51 a.m. EDT

There's a reason why tech stocks are doing well

before

they should be doing well. The companies are doing well before they should be doing well.

I expect

Intel

(INTC) - Get Report

to guide up this quarter, in part because of

AMD's

(AMD) - Get Report

problems, in part because of the end of the inventory overhang.

Dell

(DELL) - Get Report

is making many right moves, including marketing moves that show the effect of Michael Dell being back.

This morning, Goldman placed

Cisco

(CSCO) - Get Report

on its value list because, even though its earnings should be nicely in the teenage realm, its multiple is at an ever-so-slight premium to the market. That's pretty silly given its performance and its leverage to the expanding fiber world and the competition between cable and telco.

EMC

(EMC)

, which has been an amazing horse, is spinning off

VMware

in a transaction that now looks to be good for

both

companies as we now see Intel investing in the spinoff, the virtualization company, and EMC is doing well enough alone to merit higher prices. (Compare EMC to

Halliburton

(HAL) - Get Report

, which spun off

KBR

(KBR) - Get Report

at the

worst

possible moment.)

I think that

Hewlett-Packard

(HPQ) - Get Report

is having a great quarter selling printers, which is why

Lexmark

(LXK)

really

blew up.

Oracle's

(ORCL) - Get Report

got a new product cycle, which always is good news.

IBM

(IBM) - Get Report

is still buying back stock and is still cheap, even as it was removed from the go-go list at Goldman Sachs this morning (which added Intel, by the way, on the bet that earnings would be revised upward).

Only

Microsoft

(MSFT) - Get Report

, of the stalwarts, has nothing good or exciting to say.

This litany comes at a great time for the market, which is sorely in need of something beyond the infra/machine/ag/oil/aerospace bull markets. We aren't going to get it from banking, housing, restaurants or retail, now that mortgages are being reset, standards tightened, home-equity lines diminished, gasoline higher, electric bills going up and the

Fed

remaining stupidly vigilant.

We already had the

four horsemen --

Apple

(AAPL) - Get Report

,

Google

(GOOG) - Get Report

,

Research In Motion

(RIMM)

and

Amazon

(AMZN) - Get Report

(the latter is still cheap vs. the online retailer's momentum) -- providing the initial leadership. Now these once-high-multiple stalwarts are coming up from behind.

When you see the market doing its usual "woe is me" bit today because of housing and

Home Depot

(HD) - Get Report

(despite the fact that Home Depot's tender offer is huge!), consider buying tech. We have had a nice run and should cool off here, but tech might be a new place to pick up on

any

decline.

At the time of publication, Cramer was long Hewlett-Packard and Halliburton.

No Pain, No Gain

Originally published on July 11 at 1:08 p.m. EDT

Anything can go down.

I do not mean that comment to be facetious. I am not even being a bit of a wise guy.

But I have learned a lot from my callers on "Mad Money" and from the Answers feature on

Stockpickr, which is an amazing forum.

And one of the most important reminders I have, particularly for a day when sales can be made not into a panic, is that anything can go down.

Oils can go down. Ag can go down. Brokers and will go down. Nothing is immune. Some stocks will go down because the sector is awful: homebuilding. Some will go down because the market pulls them down even if you think it shouldn't, like

ConocoPhillips

(COP) - Get Report

before the buyback or

Boeing

(BA) - Get Report

before the Dreamliner, or like

Foster Wheeler

(FWLT)

a year ago, in the $30s, despite my protestations. They didn't mean much.

Bausch & Lomb

(BOL)

can go down because of what turned out to be an irrelevant recall.

Alcan

(AL) - Get Report

can go down because the price of aluminum ticked down.

Chaparral

(CHAP) - Get Report

can go down because

Nucor

(NUE) - Get Report

missed.

Goldman

(GS) - Get Report

can go down because

Bear

(BSC)

went down and

Lehman

(LEH)

went down. They can all go down because 9 times earnings may not be a floor and because there are no floors other than zero with stocks. I have been debating Goldman with a smart guy who wants me to be wary of it. Duly noted.

Some stocks that shouldn't can go down on downgrades. We saw a slew of downgrades on the oil service stocks before this decline, especially

Schlumberger

(SLB) - Get Report

. We saw a host in

Deere

(DE) - Get Report

in the $80s and $90s. Each time the stocks were hit. They went down.

Sears

(SHLD)

can get crushed despite the good manager behind it.

But what I think people should realize that, in my 25-year history of writing and investing in the market, I have found that stocks go down

all of the time

. That's why I have said -- why I have shouted -- that stocks are

not

for everyone. A portfolio of one-month Treasury bills never goes down. Your cash account never goes down. CDs never go down. Cash in your mattress never goes down.

If the fear of owning stocks is that they go down, those are all fabulous alternatives that are much better than stocks for you. Mix in a bunch of 10-year corporates, some munis and some government agency paper, and you have a fantastic portfolio, especially if you are rich. In fact, that's my portfolio, not by design, but by default, and it's terrific.

But, it never goes up. But it never goes up. I am going to write that again: It

never

goes up.

For some reason, that is not discouraging to me, because, alas, I don't need it to go up. You only need to get rich once. It's a fabulous truism.

But what if you are not rich? And what if you are a believer in the empirical data that high-quality stocks have beaten all other asset classes over any 20-year period? What if you recognize that stocks that pay growing and solid dividends (if the dividend does not exceed the profits and does not have to be paid for with borrowed money) are the best single asset class ever provided? What then?

Stocks will go down when there is fear. They will go down when there is bad news. They will go down when the

Fed

says the wrong thing. They will go down on earnings shortfalls. They will go down when they make wrong moves. All of these things have happened and will continue to happen. If you pick stocks with good dividends that fit the pattern I mentioned, it is entirely possible that your stocks will go down less, but they will go down.

That is why I say, please, please, please

sell

your stocks if you don't understand the risk of them. I know plenty of smart people who do understand the risk, know themselves and chose not to be invested because it isn't worth the worry.

Understand, though, if you want to actually make money to augment the paycheck, no matter what I do, I can't and haven't been able to come up with a better asset class than the one that went from Dow 1200 to Dow 12,000 in the time span I have been in the game. Understand this is totally against my interests, but I want to actively discourage you from owning any stocks if you feel hurt and you can't stand the house of pain. It isn't worth it.

On down days like yesterday, you might even be ecstatic. On up days, you will be miserable. The fact that there have been many more up days than down in the last 25 years means

nothing

for the future.

But let's just say that I am a lot happier and a lot richer because I understand that stocks do go down, and I respect that and can still live with it. If you can't take the pain, you can't get the gain.

At the time of publication, Cramer was long Goldman Sachs and Sears.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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