A Happy Tale, by James Cramer

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By James Cramer

Oh my God, will the bears hate this column.

Most people in the stock business can't remember a time like we saw last week. Bonds rallied. Utilities rallied. Transports gained. Techs ramped. Small-caps rolled. Even

Pilgrim Baxter

made money!!!

It was, quite simply, unlike any market we have had this decade. But not last decade. Last decade we had whole months like this. Last decade we had periods of delirious heart-stopping rallies that made you look like Midas if you were long.

I know, you are thinking that I am about to launch into some 1987 riff, about how right before the Crash we had rallies like this, false ones, that lured you in, and ultimately made you broke. You think I am about to tell you about how you better take it off the table right now because October '87 looms around the corner. Oooh, really scary!

Wrong!

I'm talking about the summer of '84, when we had an explosive rally nearly every day. This market's coloration is the spitting image of that fantastic time.

I remember it well. I was ostensibly studying for the bar exam, taking some BarBri course at Town Hall on 45th or 46th Street and 6th Ave. in midtown New York. We had a couple of breaks in class, including one that coincided with the opening of the market, which was at 10 a.m. during those leisurely times.

I had set up operations on the phones diagonally across the street, tucked into the New York Tel building, because the phones right at the corner of 46th and 6th were always too busy.

I would dash out on break and quickly call Fidelity Discount Brokerage to play the openings, my notebook in hand, my positions in my head. I always asked for a guy named Joe, because all of the others in the FIDO bullpen -- anybody could pick up the phone and you had no account exec -- didn't take me seriously and thought I was some sort of out-of-breath nutjob. (I still harbor

Carrie

-inspired prom fantasies about those who laughed at me, by the way.)

Anyway, I had this epiphany that buying out-of-the-money calls on the semis was the way to go -- this was right before Japan came in and ruined the margins -- and I was big long Texan (

Texas Instruments

), Mote (

Motorola

) and AMD (

Advanced Micro Devices

). (Heck, if

Intel

had been any good I guess I would have been long that, too.)

Daily, I would place my call bets at the opening, rush back to Torts or Commercial Code and then dash back out to learn my out-of-the-monies were now in-the-monies!! (Translation for neophytes: A Motorola August 60 call I might have bought for $1 with the stock at $57, would be at $4 because the stock had vaulted to $62.)

And I would ring the register and head back to my sister's floor where I was camped out while I studied for the stupid test and watched FNN to get the feel I needed to generate my next hot picks. Sometimes I would just stare at the tape for hours, mesmerized, looking for nonexistent patterns to place my bets on. Didn't matter; that tape was unstoppable. I was coining money.

And then August came and something unheard of at the time occurred that gutted my trading style. There was simply too much demand every morning for stocks, so they couldn't get them open in time for my measly little bar study break. I was unwilling to give market orders (still am) to try to get the opening option trades out of rotation.

I would sit on the phone waiting for Mote to get out of upside indication or Texan to be reindicated up, and hear those brokers cackling in the background about the "madman trader." And then I would have to go back to class without any bets being made. Damn class cost me a fortune, like I ever used the Esq. thing anyway.

After about a week when Motorola and Texan must have been delayed every day as buyers flew into the stocks, I had to adopt a "buy-and-hold strategy" -- buy Tuesday after class and hold through Wednesday after class to sell!! My version of long-term capital gains. At the time nobody believed the upside would last. The papers were filled with doubters even then. The press hated the market!!!

But my buy-and-hold plan just made me more money as I rolled out of one strike and into the next highest one. Sometimes the stocks would just blow through the strikes, like oil blowouts in search of Red Adairs that never came. I still tingle when I think about how exciting that period was.

That's the way this market feels. I think soon stocks, all kinds of stocks, will have delayed openings just like that summer as supply dwindles and demand increases, exacerbated by the Godot-like wait for capital gains tax breaks. Like then we had the Fed against us for a while (the early part of '84 which was horrendous particularly for small-caps) and then turn benign as we had good but not red-hot growth.

So what finally happened? I know if I were a journalist back then, I would have liked the epilogue to read: "All the jokers like Jim Cramer got wiped out when the market turned south and ravaged the speculators."

But the Fidelity brokers who used to giggle as they fielded my five lots never got the last laugh. Instead, I traded my phone booth at 46th and 6th for a desk and Quotron at

Goldman Sachs

-- ground zero for the greatest bull market ever -- and we rallied some 4500 points. I stopped trading fivers and went for position limit

Merck

and

Philip Morris

calls. I can't say that the story had a happy ending -- because it never ended. Let's just say it kind of reads like the tagline for a lot of my daughter's books, you know, the ones that say, "and they lived happily ever after."

I told you the bears would hate this column¿

*****

Random musings: The antitobacco plaintiffs' bar sure does make it rough to be long those stocks, let me tell you. Just as the jury goes into deliberation on some Jacksonville case that would cost the industry a boatload, I am hit with a one-two punch of a devastating

60 Minutes

-- featuring a Mo exec talking about how it's tougher to quit Gummi Bears than Cancer sticks -- and a well-documented piece in the

Journal

about how 30 million odd Americans can't quit. Unless that jury is forbidden to speak to anybody, I'd say the mass tort bar's got this one in the bag. Memo to Morris exec: Hope your kids give you unfiltered gummies with high tar and nicotine for Father's Day. Memo to tort bar: Next time see if you can get Cancerman to keel over with lung cancer on

X-Files

. Then I'd short

Morris

!!! ...

How about that nod to the bulls

Barron's

throws us with an interview with

Abby Joseph Cohen

. Of course they intersperse it with

Steve "nuclear winter" Leuthold

. But they made it very easy to skip over his negativity¿

Damn, just when the bears were going to be able to say that the cyclicals were getting left behind,

Fort James

strikes back¿

James Cramer is manager of a hedge fund and co-chairman of

The Street.

His fund holds a long position in

Intel.

While he cannot provide investment advice or recommendations, he welcomes your feedback, emailed to

Jjcramerco@aol.com or

JJC@jjcramerco.com.