Finding the Market's Risks and Rewards

The goal is to make as much money as possible with as little risk as possible. But the dangers of being in the old stuff can be <I>greater</I> than the risks of the Red Hots.
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An astute reader last night sent me a quick P.S. to a short missive: "long B2B; short quarter-point movers." The simple clarity and contrast of those six words ring out to me. They say the same thing as "long Millionaire; short Jeopardy."

The money is simply bigger. Nothing vulgar about that. The money is simply bigger.

Join the discussion on

Cramer's Latest, go to the

Red Hots Forum

, or visit our

B2B Forum

. Sometimes in the frenzy of commentary about the markets, we forget that the goal is to make as much money as possible with as little risk as possible. Oh sure, some people like more risk. Others don't need to make money. But when we were setting up

TheStreet.com

and doubter after doubter -- and there are still way too many of those -- said, "Hold it. That's too niche," I would always say that if you appeal to the universe of those who want to make money, you aren't niche. You're wide.

That's why I spend so much time on these

B2Bs, why I keep insisting people go to our

boards (I weigh in there regularly about my likes and dislikes with full disclosure, so if you want the skinny, what are you waiting for?), and why I remain interested in publicizing the

Red Hots. I do it because, like

Millionaire

over

Jeopardy

, the money is bigger. The increments are bigger. And like

Millionaire

vs.

Jeopardy

, right now at least, the risks are about the same.

Oh foolish me, you may be thinking, everyone knows that

Extreme Networks

(EXTR) - Get Report

is more dangerous than

Dial

(DL) - Get Report

. Everyone knows that

JDS Uniphase

(JDSU)

can be more deadly than

Brown-Forman

.

But that has not been the case. In fact, let's take that first comparison. I rode Dial down to 20 in a frightening burn-up from 32 for

nothing

. Nothing had changed. Meanwhile, Extreme is facing a dangerous product transition (don't worry -- people are short it, not me) and nobody gives a hoot!

In other words, the dangers of being in the old stuff, the quarter-point movers, is at times

greater

than the risks of the Red Hots.

If the increments of gain are much, much bigger and the risks slight or less, how can we justify working on

Revlon

(REV) - Get Report

or

Coke

(KO) - Get Report

? How can we?

Anyway, I leave you with that thought as I

prepare for grilling

Henry Blodget

on absurd price targets that move stocks up in staggering clumps, with the goal of getting him to give us new ones on our

Fox

show this weekend.

Random musings:

PurchasePro

(PPRO)

, one of my B2B teams, just got a big contract from

Sprint

(FON)

. But it also filed an offering. Oh boy, and I thought I was going to kick

Matt's

butt; these shares are going to slow it down. Heck, at least I will have a chance to get long in real life.

Be sure to check out the latest standings in Cramer's business-to-business rotisserie contest against his colleague Matt Jacobs.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Ariba, Brocade, Broadcom, Conexant, Internet Capital Group, JDS Uniphase, Redback Networks, VeriSign, VerticalNet and Dial. 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

jjcletters@thestreet.com.