Cramer on 'Second-Guessing Syndrome'

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My wife's words hung in my ears Wednesday as I remained paralyzed by a disease that seems to infect far more men then women: "second-guessers syndrome."

I don't even know why, but Wednesday, searching for a new symbol to replace


on one of my quote machines, (like anybody needs to follow that dog anymore) I typed in CL, for



The two letters brought up the price $69. I remember at that moment at the office we were going over

NFC East

injury reports, something that usually rivets me, but as soon as I saw that price, my brow furrowed, my nostrils flared, and I felt a flush coming over me. Although I had just put the stock up on my bulletin board, I then proceeded to type CL in my quote line seven or eight times, as if repeated symbol hitting would somehow affect Colgate's price.

Jeff Berkowitz

, my partner, soulmate, shrink, and underboss, knows the signs of the first onset of "second guesser's syndrome." He knows better than to ask what's the matter.

"Which one is it this time?" he asked, disgustedly, because he knows that the incubation period has probably passed, and it is too late to nip it before the disease distorts all thinking.

"^^%$&^6$&^$ Colgate." %&^$$%$% 69 ^$%$&$ dollars. We sold it at $6%$%$&$5 dollars."

Jeff knows better than to say "so what." But he wanted none of the rant. He buried his head in the four columns of injured Cowboys for this weekend's game and smiled. (I swear he hates the 'Boys more than he loves the Jints!).

Jeff also remembers what happened. We were having one of those days a month ago when the bonds looked good, and the drugs were flying and the utilities were on fire, and Colgate was down about a buck and a half. I checked the floor picture, we looked at

First Call

notes, we checked with some brokers, made some half-hearted analysts calls and felt that Colgate should have been more in synch with the market. It should have been up, not down.

While it was true that


had just blown up from poor overseas sales, and Colgate has a monster good business in Latin America, we were reassured that those businesses were tracking on plan. We bought 50,000 shares at about $68.5, down a dollar and a half.

The next day

Smith Barney

downgraded the stock. The analyst did it on price. She even went out of her way to say it was price. No matter, delayed opening, massive sellers, the works. Even after Colgate called around and told people things were fine, the stock got wrecked. It dropped to $63 like lightening hitting an antenna attached to my head.

Oh we averaged down, we battled, we bought some, darted out again and bought some more, so that when the smoke cleared we had a $66 basis on about a hundo.

And then


came out with its "restructuring" and we got a little bearish internally, and I said to Jeff, "What are we walking around with all this Colgate for? It was just a ^%##^#$ trade that I have turned into an investment."

So we booted it at about $65, basically licked by the downgrade, coupled with the unfathomable logic that you can't just own 100,000 shares of a stock because you think it is going to go up if the bonds go up or if Latin America stabilizes. We had no edge. The only reason we were in the darn stock to begin with was because it was down a dollar and a half two weeks before because someone anticipated the downgrade, for all I know.

Colgate's $69 stock price Wednesday morning was a piece of rancid halibut right in my face. Smack. "And I bet the ^##^$%e stock is rocketing to $71 and now I can't buy it cause I missed the last four points," I said to myself.

But then I remembered a lesson the

Trading Goddess

taught me during the years that we worked together. Never, ever let a past trading mistake paralyze you and keep you from taking action you know is right. See Colgate for what it is, a $69 stock that might be going to $71 right now, and not a $69 stock that you sold at $65. Start your basis over everyday at the closing price, not where you bought it.

But, then I got distracted. I started thinking that the Trading Goddess missed this last move anyway because she got too cautious. Jeff got me to loosen up a little by talking about the gihugic Eagles-Giants game this Sunday at the Vet. On my quote machine I replaced Colgate with

National Semi



downgraded the stock. Nice and benign. And the day proceeded.

Right before I left the office Wednesday night, thinking I had licked the syndrome, I hit up Colgate.

It closed at $71, up two for the day. Darn, what a great gain I left on the table!

James J. Cramer is manager of a hedge fund and co-chairman of Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Mr. 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 welcomes your feedback, emailed to