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Inside the Mind of a Xerox Short

Many otherwise thorough short-sellers reached the wrong conclusions about the largest copier company.
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Guess I gotta cover that nastola Xerox (XRX) - Get Free Report short. Oh, I've been waiting all day for a little break. What was I thinking yesterday when this one was down 4? What's the deal with those gross margins? How can this be happening to me?

You've just stepped inside the brain of the intelligentsia-type bear, the kind of short-seller who does all of his work, knows all of his geography and reached the wrong conclusions about the largest copier company. For too long now, Xerox has been the macro whipping boy, the stock bears have used to play the weakness -- first in Asia and then in Brazil. Xerox had become the stock the bears said could do no right because of its excellent efforts to take over the world during the relentless pullback of the Japanese. All of Xerox's savvy has been working against it because the company's share gains came from all of these wacky places with bogus currencies.

This quarter was the veritable kodiak trap. Who said Jeff Bezos is the only guy who knows how to manage a stock around here! Xerox is full of stock jocks! A combination of the enfeebled Japanese and problems at

IKON Office





resulted in Xerox taking huge share without having to give any price concessions. What you see on your screen now, with Xerox up 12, is the scramble among the bears to save something, anything, before they get Xeroxed into the 120s.

If I didn't have any discipline, I would be taking this stock now, betting that the bears aren't done covering. But alas, I have violated enough old-fashioned discipline with the Net. I can't come in on Xerox here.

James J. Cramer is manager of a hedge fund and co-founder of 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 by sending a letter to