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They make it tough on the short side once this market breaks. I just priced out some puts in some PC companies and some financials that were so overvalued they would offer no protection unless the market got crushed here.

Take the

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March 85 puts. Here is a great company that is up a great deal and is extremely volatile. With worries about personal computers in the air, I thought this would be an interesting spec. But they are at $3. I don't know if the stock falls to $82 (yes, they would increase in value before then, but I don't know by how much and certainly not enough to justify that price), and the risk reward just doesn't cut it for me. Too expensive; they almost always are.

It is always tough to go against good companies, but they are the ones that are up the most and could get killed the fastest if the bonds keep going at this pace.

Yes, the bonds are still the focus and they dropped almost a full point on the futures since I last wrote. Again, that is all that I am focused on. I am not trying to call a bottom. The bonds will call that bottom for me. They are in control; not me or you or anybody else.

Sidelines with small puts. That's the ticket.

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 an email to