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Pick Your Price

JJC steps off the desk and determines a price at which he'd buy Time Warner. And then the stock hit the price.
Author:

On days like today, with the sell programs burying you faster than the tide buries a kid's sand castle, I like to step off the desk and pick price levels where I would buy merchandise no matter what.

Let me give you a real-life example. I love

Time Warner

(TWX)

. I think these guys are doing many things right. The stock has been funky ever since that Portland ruling that hurt all of the cable stocks.

In our morning meeting I told

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Jeff Berkowitz

that this stock, which was at $67 yesterday, intrigued me below $65. In other words, if I could buy it at $64 and change, I wanted to be there.

Sure enough, at 1:10 there it was, down about three, looking absolutely awful. You would think this stock was about to announce a shortfall. Or worse! No way did I want to stick a bid in. But we had agreed, in a benign, off-the-desk, analytic moment that $64 and change made sense to start a position. So I stuck a $64.675 bid in and got hit. On 15,000 shares.

Lo and behold, the sell program stopped, and the stock bounced to back above $65. I am not naive enough to call that a "good trade." But I love buying merchandise at my price, not someone else's. That gives me conviction, in a tape that is totally conviction-less.

Will this work for you? I don't know. I don't know your temperament. But I have done a massive amount of empirical research on these kinds of buys done with price objectives off the desk and they are almost always the springboards to successful trades.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Time Warner. 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.