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On Days Like This, We Want to Get Hit

Remember, we aren't in this market to amuse ourselves, we're in it to make money.
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On days like today we like to bid for stocks. We want to get hit. We don't want to overpay. So, for example, we bid for a little

National Semiconductor


a quarter-point below where the stock was when it opened.

We bought the stock at 27 3/4.

We only do this kind of buying in stocks on the

Big Board

. We don't like to leave bids in


because that market can move too fast.

Right now, for example, we are bidding 47 for 5,000 shares of



. If we get hit, great. If we don't, no problemo. That discipline keeps us from buying too much at one price and lets the sell programs and the illiquidity work for us instead of against us. Same with

America Online


at 93. That's where we want to buy more. Not a penny before then. (We want to wait two points -- wide scale -- before we buy more.)

This kind of buying is very boring. We tend to sit around and hope the market comes down. But when you have markets this thin and you don't know where the bodies are, we figure this is the best way to make things happen for us. We aren't in this to amuse ourselves; we are in this to make money.

Why do we care exactly what price we get? Because we have found over the many years we have done this that the incremental quarter- or half-points do add up for a performance manager. Individuals who want to own and forget about stocks might think this method is silly, but we have examined and re-examined these kinds of limits and we find that at the end of the year that price sensitivity makes us a great deal of money.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund was long America Online, Donaldson Lufkin & Jenrette and National Semi. 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