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Playing Beside the Buy Program

Sometimes you just have to respect the buy program when it gets better prices than you do.
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Darn that buy program Friday. It got all of the good prices. In the last 40 minutes on Friday, a giant buy program swept through the Street, taking offerings, taking up Nasdaq 100 stocks in its wake. I am always torn about these buy programs. To go in and buy stocks while this program is on is almost foolhardy, as it is inflating prices right in your face.

(Just so there is no confusion, a buy program is like a machine gun compared to a rifle of a single buy. It can fire off multiple shots per second. It sweeps everything in its path. You have to respect it and you can't get caught in its field of fire, even if you are on the same side. It is like putting a billion dollars to work in a blink of an eye.)

But it looks like this morning that the buy program got great prices. Everything is ramping, and we won't be able to get in lower than the program.

That's what happens occasionally. It is very discouraging because a buy program, while rapid, does not run deep. Stocks have been taken up, but rest -- and let me mix my metaphors for a second, as it is the Net -- on a bed of quicksand.

Cisco

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, for example, went up on very little buying Friday -- largely all program buying lifted it. But now I feel like I have to come in and buy more Cisco on top of this inflated level. I have no choice other than to admit that the program got the better prices and move on.

Everyone is faced with this dilemma when a buy program "hogs" the offerings and then the tape gets bullish as it is now. So, we tread carefully into quicksand and we do some buying. Regretfully, as I said

this weekend, we did not do enough buying before the program.

But that was last week, and second-guessing doesn't make you a dime.

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Random musings

: Last week, a release that

Amazon

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just sent out about having 10 million members would have been tossed. Today, I bring it into my morning meeting with

Jeff Berkowitz

and talk about buying it.

Amazon.bomb is now fishwrap, I guess.

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