We are all sitting around
, waiting for the
sellers to show their faces. Surely someone must freak out at a
$4.9 billion verdict. Isn't anyone going to sell to us?
Verdicts are like that. You hear them and read about them, and you begin to think that they have to matter to someone. But the funniest thing about these outsized verdicts is how little they really scare people into doing anything --
Here's what happens, though: Throughout America, dozens of hedge funds huddle around Instinet to see if anyone blinks. No one does initially, of course, because we all know that this verdict won't stand. So all of the action is on the bid side. No matter -- I bid 65. Someone else then tops me at 65 1/4. Then I move up to 65 1/2. Someone joins me. Then I move up to 65 3/4.
Throughout this whole dance,
no sellers materialize
. We are all just bidding. We are all just playing around with each other.
But then someone in the media picks up on all of the bid-side activity and doesn't really understand that we are all just topping each other and no one is selling. That reporter says that the stock is looking down 2 from the close, at 65 3/4.
Now people really do panic. They hear selling. They think, "Heck, if someone else is selling, then I better sell." Next thing you know, the stock gets clobbered.
This media-created panic is so ingrained these days that I just can't afford
to be bidding. It is one of the most predictable portions of the investing firmament.
So, come on media, let us in. Do the buyers' bidding. I know we can count on you.
Another impossible-to-understand-and-value deal on the Internet -- the
combo. If someone tells you this is easy and I don't know what I'm talking about, he or she is lying.
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