Birthdays Beat the Game Any Day

The trader heads into today's Fed meeting lean, with no agenda. And he's keeping his mind on the important things in life.
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Game day.

After six months where the

Fed

hasn't been a factor, we are back in that world where our fates are tied to a two-line statement.

If the statement has the magic words -- whatever those words might be -- we will make money, and if the statement reads terribly, we will lose money. I hate situations like that. All of my stock-picking skills get benched because of the triple uncertainty: I don't know what the Fed will say and I don't really know what the market wants, or how it will react to the Fed's two-line statement.

So, I try to remain as nimble as possible and not be locked into one scenario. That's one of the reasons I approach important Fed meetings lean with no agenda.

But there's another, more significant reason. I've been through dozens of these Fed days. Five years ago exactly, the day my youngest was born, I got a call from the office within a minute of her young life, telling me the Fed had tightened. There I was, on the one hand enjoying the truly wondrous miracle of birth, and on the other shouting frantic -- and wrong -- directions to my office.

Why do I remember it so vividly? Because I let my poor positioning in the market tarnish one of the happiest days of my life, for no reason at all, because -- of course -- we recovered in a week's time and lived on and to play and profit again.

Besides the obvious mistake of taking the phone call, I had also thought I could game the ungameable. Two days before the event, I knew we would soon be welcoming a new child into our lives. But I had a hunch that the Fed might tighten. So I shorted a massive number of cyclicals, betting that if the Fed tightened, I would profit.

Sure enough, I got the tightening right. But the cyclicals went nuts to the upside. Not only should I have not tried to game the ungameable, given the real life situation that was on the line, but I got it dead wrong anyway! I lost a bundle and then exacerbated it by adding to my shorts in the hospital room because I thought a tightening was bearish for cyclicals.

And it served me right. For thinking I would know how the market would react. And for thinking it was so important to get it right on the eve of something so fabulous in our real lives that nothing else should have mattered.

I have to live with the fact that I took that phone call and discussed being short

Alcoa

(AA) - Get Report

and

Dow Chemical

(DOW) - Get Report

in that hospital room, something I will always regret.

But I don't have to live with any more attempts to get right something that can't be predicted.

There will be plenty of opportunities down the road and plenty of time to get them right. And hopefully, plenty of birthday parties to remember what really happened on May 17, 1994.

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

letters@thestreet.com.