A Formula for Success

The trader shares the strategy that has always worked for him.
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Last Friday night, it sure felt uncertain out there. When I was hanging around the Fox News Channel's offices, periodically on air and backstage, people would come up to me and ask me "Is it still OK?" or "Do you really still believe?"

Part of me wanted to moderate my enthusiasm for this market just to show them that, yes, I too get worried. But I wasn't worried, so I couldn't.

Now I look at my screens this morning and I think, wow, it happened again. The gloom got to people so fast, everybody got so worried, and yet, if you stood there and bought the weakness Friday, you made good -- no, make that great -- money in many stocks. And it looks like you will do so again today.

When we were knocking out the

Channel 5

(local New York TV) spot last night, Carol Martin, my partner, wanted to know how I knew to buy and how come I wasn't scared.

To which I said the same thing I have been saying for years: If being scared made me more money than not being frightened, I would be a jackrabbit! If fretting and indecision could coin money, I would have a monopoly on both.

But what works, what always works, is buying high-quality stocks of high-quality companies that are doing quite well, taking advantage of the pessimism created by others to buy what you want at your prices.

Still the best formula I know.

Random musings:

Business Week's

Gene Marcial got the

SFX Entertainment

(SFX)

right. Wrong bidder, but a bid! Good for him!

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. 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.