One thing I'm getting sick and tired of reading and hearing about is the vast conspiracy that people concoct regarding the large brokerage houses and their positioning to shaft the public.
It just isn't true.
First, what are my credentials here? One, I'm a rock thrower. Check that, I throw high explosives. I have taken these firms to task for just about everything, from not helping the little guy to defending an underwriting system that brings out the worst in both managements and clients. I have criticized research departments for being slaves to corporate finance. I have taken individual analysts to task for blown picks. I have railed against full-service brokerages for charging too much and discount brokers for crummy service. I have pretty much assured that I'm no house man for this industry. If anything, I walk around with a target on my back as big as a steamer trunk. I am sure I'm a real picnic spoiler at the ad sales confabs.
So, with those credentials in mind, here's my beef: The research departments of these firms operate wildly independent of the trading operations. You don't get a heads up about these things. Nobody does. The surprise factor here is very, very great. Nobody accumulates stock. Nobody has an edge on this stuff.
. At one point Thursday, Brocade was up large. I even joked about it in
Buzz and Batch, talking about how they were going to take it up. I mentioned it in my disclosure. Soon after the article appeared this stock just got raided. Just hammered. I was all over
Matt "Brocade's One of the Good Ones" Jacobs
about it and we called everyone and nobody knew why it fell off a cliff. Nobody was long it. Heck, people told us they were short it, not long it. If this thing was being accumulated, believe me, it was not being done on this planet.
After the close, Goldman Sachs's Laura Conigliaro put it on the recommended list. Again, this was a bolt out of the blue for everybody. No one knew this was coming, inside or outside of Goldman. But that's typical of how this business is. The recommended list is still a closely guarded secret even to the insiders at these firms. Always will be.
I have broken enough taboos and taken enough heat in my life that I would be more than willing to tell the truth if it were otherwise. But there are no conspiracies about this stuff. Forget about it. Focus on something else. Blame someone else.
This just isn't an issue.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Brocade Communications. 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