A Bad Trade Spreads Like a Weed

Cramer recounts his latest dealings in Nortel.
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So I was a good boy and waited until after the

Chicago Purchasing Managers' Index

before I bought 10,000 more shares of

Nortel

(NT)

at 42 1/4 to average down. It hurts to even write that term, but if you remember, I

bought the stock off of a call that seems like it was made eons ago, yesterday's announcement that

AT&T

(T) - Get Report

would give more business to Nortel.

In this market, nobody remembers something from day to day. That Nortel call is probably wrapped around some fish right now.

Of course, I think that earnings do matter and that this AT&T business could help Nortel's earnings, but now I am saddled with playing defense. And I hate defense.

Now here's the tough stuff. A bunch of Web sites are saying this morning that Nortel is in talks to buy

Cabletron

(CS) - Get Report

. Truth Serum, where are you when I need you? Every few weeks, Cabletron gets rumored like this. I don't think this one's true, but even if I knew for certain either way, I could not comment because I would be an insider. Meanwhile, though, I get hurt because nobody long Nortel really wants to see that acquisition occur.

The paranoid in me says that this rumor was floated

because

I mentioned that I am long Nortel and somebody wanted to hurt me. But that would be so outrageously self-important as to be unrealistic.

Now the stock is trading through 42 as the bonds give it up. A bad trade gets worse.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Nortel. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.