Flying Blind in the Third Market

Cramer's no adversary. He just hates it when people get things wrong.
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Friday afternoon, 5:30 p.m., and the remaining players on the Street are scrambling. "Where should Compaq (CPQ) trade?" I'm thinking 24-25. My partner Jeff's thinking 23-24.

Suddenly, a broker's on the line. He is willing to bid 26 for a million shares of Compaq. (I will spare him the embarrassment of naming him.)

"You are way off your market," I scream into the phone. "Move it before you are whacked. You are way off."

The guy reiterates his market. He wants to get involved.

"You will be buried alive. Move. Move. Move," I scream.

"No need to get adversarial," he says to my trader. "I hear you." And he moved to safer territory.

"Adversarial?" I ask. "Adversarial? You think I want to hurt you? What, are you out of your mind? I'm trying to do you a favor."

Maybe today this guy realizes I wasn't being adversarial.

Look, I hate it when people get things wrong, even people I don't really care about. Even people on the other side, the sell side. Why should I care if National Gift and Brokerage (no, not his name) gets it wrong?

Because there is smart and dumb, and dumb is bad and smart is good.

Because I don't want anybody to be buried. That's just me. When you are trading in the third market, you are flying blind. For some, blind means with some sonar. For others, it just means blind.

I was not long Compaq, so I could not whack this guy who was way off his market. But it does remind me that someone who was long could have made out like a bandit by nailing this guy big.

Again, there are so many imperfections after hours that it pays to stick around. It can save you a fortune.

Random musings

: Jeff notices that we are now getting into an old-Web/new-Web dichotomy where the old Web (

Yahoo!

(YHOO)

and

AOL

(AOL)

) underperforms the new. I hope this is a short-term observation.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long America Online and Yahoo!, although positions can 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.