When I left Goldman Sachs in 1987 to go run money, people were incredulous. Even though we had just finished a Dow Jones doubling, which is a massively positive event, lots of folks predicted I would find my way back to Goldman in a few months, back to mother, because, well, it's awful hard to just sit there and make money in the market. Most people don't. Even if they make money, they can't make a living. They need the safety of working for an institution, the safety of a paycheck not earned by your wits.
Even though I had made fortunes for my clients, the lifeboat of working at a firm was considered too great a positive to risk going off and trying to set up a money-management firm. You could count with one hand the number of believers. Only a tiny group of managers were able to make a go of it on their own then. The odds were dead-set against it.
Ten months later the market crashed. Almost everybody I knew who had set out on his own to run money gave up. I had been in cash for the crash, and stayed in business. I had a decent year and I never looked back. Not for a moment.
I think about that time now because, once again, we are in a challenging position where people are saying, "What was I thinking? Who was I to think I could make money, or make a living off the market?" There are probably a hundred times more
hedge funds existing now than when I got in the business. Plus, there are literally hundreds of thousands of minihedge funds, people who trade for a living out of their homes and out of offices designed to support the activity. Swing traders, daytraders, at-home enthusiasts, they are all the same for me. They are people trying to make it just like I made it in 1987.
You see, we have all had it easy. In blackjack, I would say we are all so used to drawing the 5 with the 6 showing that we don't know how to handle it when we get hit with another 6! People are going bust now. Now it is hard. Real hard. Almost impossible. I know it; you know it. People don't want to talk about it. Total denial. You won't hear it spoken, other than perhaps on Squawk, where Mark Haines can't help but tell the truth. He knows, too. You can tell from the questions he asks. But nobody else is saying it.
Many of you have emailed me in the last few weeks saying, "What the heck is the point?" Or, "Why don't you just walk away, or take three months off?" Others write, "Face it, this market is finished. Go do something else."
To which I say, this is my job. It is what I do. I ain't going anywhere. It is my job to manage money in good times and in bad times. I have to find opportunity and stay in the game. Sometimes, like this time, the
task is to stay in the game, to preserve capital,
to be left standing
. If I were a lawyer or a doctor or an engineer or a salesperson or a Full-time, stay-at-home dad, I probably would conclude, "What the heck, I am taking what I have made off the table and sitting this one out. Maybe for good. It's just too nasty."
Instead, I have to look at the playing field and say, OK, what's working, what could work, what could change? What could get better? What could get worse?
What could be shorted? As someone who is a fundamentalist, I have to stay on top of companies and continue to find out what is going right and going wrong. I have been tough on
chartists lately. But one thing is true, and I know this from my wife, who is an inveterate chartist: You don't have to keep up with companies as I do to be a chartist. I had to be on the
call last night -- which was good, despite the fact that people were whispering for a higher number -- and I had to hear what
said and what
said before that. I have to pay attention to the
war because one of the participants owns a ton of
and I am afraid it will blow it out. I have to follow what is said about
because if business had turned bad I would have to cut the position back. It didn't; I won't until it does.
I get the sense that many of you are evaluating this market and deciding "What the heck, maybe this business isn't for me. And it shouldn't be for Cramer, either. It shouldn't be for anybody."
Sorry, I don't know about you, but I know this business is for me. It is pitch black, 3:38 a.m. in the morning, everybody's asleep and I am reading the cyberpapers scanning for ideas, looking for an edge, as always. Now it is 3:39 a.m. and I can't wait to get to work to find something new to check out -- whether Avon last night was better than expected, to see who upgrades
or downgrades Applied Materials. I can't wait to see if I can spot a pattern, or find something new or different or lower-priced to buy. Or too high a price to sell. I don't care.
I made my decision in 1980 that this stuff was for me. I endured law school, took the darned bar exam, and still decided it was for me. I forged it in 1987. I had it tested in 1990, in 1994 (which I still think is
the best analogue) and in 1998, when I got too negative at the bottom, something that I don't think about but am reminded about often by nasty emailers who will never let me live that one down.
Now the market is crummy again. Awful. Take the roll call of how awful yesterday was for someone who likes tech:
is fighting for its corporate life in a system that doesn't really allow you to fight,
is recalling a basic product, something material to earnings, Cisco reports a stellar quarter -- oh don't give me any of that nonsense about rejiggering and massaging, that's just a pack of lies, business is on fire there -- but the stock gets hit anyway, Applied Materials reports what we all know to be a great number, but somebody out there wanted more and that somebody is selling,
is taking shots at Cisco,
, and we hear that
is having a so-so quarter.
Hey, that's all bad.
To which I say, how about them
? Did you see the action in
? Don't want to miss that
here. Gotta like the way the
withstood the onslaught.
Oh, and how about tech? Not so hot right now. Don't aggressively add to positions. Make sure they are trim. Stay close, don't know when it will turn, but don't lose too much money. Trade around them, buying a little on a dip, selling a little on some strength. Recognize that we are in a bear market for technology, but don't draw a conclusion that it can never end, because that's when it will end.
It's my job to come to work and find ways to make money every day. Maybe it shouldn't be yours. Maybe it is too hard again. Maybe it is like 1987 when everybody told me that I was nuts to leave a great job at a great firm. Maybe too many people were lured into this game by how easy it was.
I don't know.
I work now, I come to work now, because I like to. I have done well enough since 1987 that I don't have to. Ever again. Haven't had to for a very long time. Lucky and good, I guess. Can't stay home; my wife sure doesn't want me hanging around the house doing nothing. And, most important, I love what I do. Always have. Always will.
It is 4:38 a.m.
Can't wait for the day to begin. Just like every other day.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Applied Materials, Intel, Cisco, Dell, Sara Lee, Quaker Oats, EMC, Hewlett-Packard, Pepsi, Microsoft, Colgate, Philip Morris and Disney. 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