Getting to Secondary Base

Buying ahead of the secondary roadshow can make you money -- until everyone starts doing it.
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You can tell when a market is getting really screaming hot, so hot that it might do some burning. It's when people are playing the secondary game. No, I don't mean buying the stocks on the secondary; I mean buying them ahead of the roadshow!

At least three times this morning brokers urged me to buy stocks ahead of a New York roadshow for some secondaries. All sounded exciting. All sounded like they would get a first wind at the show and then a second wind at the pricing.

We have seen this pattern before, in the spring of 1998 and in the spring of 1996. We played it aggressively. Initially it works, but later on, when too many people get wind of it, the strategy kills you. We are still way early in it, so we think the strategy will still make you a ton of money.

Confused about where to find a list of the secondaries worth playing? That's wrong. Just read

Ben Holmes'

stuff on the site. Really want to get into it? Subscribe to

ipoPros.com

. I do. Darn good.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. 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.