The confluence of positive and negative voices occurs each day in the market. Some days the positives are simply louder than the negatives.
Yesterday was one of those days. Coming in to the day we had aggressive
buying. I couldn't figure out where it was coming from.
one in my office could either. Some of that aggressive buying from the get-go, it turns out, stemmed from a radio report by Bob Brinker, a man whom I do not closely follow, who had been negative on the market since January.
His decision to go positive for a trade over the weekend probably moved the thinly traded market that was yesterday's session substantially. He has a huge and deserved following.
At the same time Laszlo Birinyi, a man who has been right far more than he has been wrong, turned less bullish. He doesn't see big gains from here. That I caught because it was on
Don't get me wrong. I make up my own mind. But I can't help listening to what is around me. Some of the confusion I felt yesterday had to do with calls by these two individuals, one of whom I heard and the other, I didn't. Here's how the confusion played out.
I like to buy individual stocks although at times we have bought the QQQs or other index instruments. Yesterday we could not understand initially where all of the
buying was coming from. Sure Dan Niles made a bullish call from Lehman, but he had made the same bullish call from his previous firm. He is one of our favorite analysts so we thought to buy some
but the stock wasn't flat at the opening, as we thought it would be off the gateway -- to-use-somebody-else call so we did nothing.
Similarly, we saw no reason to go and start taking more
. But all of those were ramping from the get-go, too.
I now understand they were ramping because the public was buying the QQQs off the Brinker report. Remember, Brinker, while well followed among retail, does not fit into the firmament on Wall Street. (That's probably good.) Not one broker or trader said to us yesterday "I see a ton of QQQ buying." That's because it was all retail buying. But buying of the QQQs yesterday moved all of the underlying stocks,
and not vice versa
Of course, in retrospect, I wish I had been buying too. I wish, at least for a trade, that I had gotten the Brinker call. We did nothing until later in the day when we sold some tech to by some sold out drug stocks.
Later in the day we got wind of the Birinyi call. When I heard it, it confirmed my skepticism about the rally. But to others, Birinyi's capitulation marked more of a bottom than a top. Unlike Brinker, Birinyi had been positive coming in to the year. So his "go negative" view was taken as a contrarian signal and it fed the rally further.
That leap was hard for me to take. Perhaps I show too much respect to my elders. But just as I refuse to say that George Soros, Stanley Druckenmiller, Julian Robertson and Stanley Shopkorn knew nothing or were out of synch, or weren't wise to the new way stocks are trading. I was unwilling to dismiss a lifetime's worth of Birinyi's work and decide his negativity was a buying opportunity, too.
Yesterday, Birinyi's view turned out to be wrong, too.
What does one day matter? So what if you are wrong for a day in this business? Typically, one day wouldn't matter. But yesterday was a plus 7% day. I have to catch the plus 7% days square in the kisser if I am going to outperform. I didn't. So I left angry and unrequited.
Of course, when I got home I recounted all of this to my wife, the
. We took a long walk and I hashed things out with her. She took it all in and seemed about to offer me some encouragement until I slipped up and said something that got her going.
"We didn't win today, I guess," I said. "Win?" she looked at me and shouted loud enough that anyone on Summit Avenue had to have heard. "Win? Win what? Win the Congressional Medal of Portfolio Management? Wake up. There is no winning. You can't win. It is not a winning game. It is a job, for Heaven's sake."
But, I said, I should have been. ..." And with that she just waved me off.
"I can't believe we are still talking about how you should have been longer or should have been shorter," she said. "You'll get it right tomorrow. You always do."
Brinker, Birinyi, Karen.
I am going with the latter.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Cisco, Intel, Oracle and SunMicrosystems. 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