Publish date:

Seamless Logic

The trader looks at the 'coiled spring' stocks that his colleague favors.
Author:

They can't stay away. They only know to buy these kinds of stocks, these rough-and-tumble gappers of 15 points or more.

Take

VeriSign

(VRSN) - Get Report

. We remain long it. The ride down has been incredibly painful. Worse than the Big Bad Wolf at Williamsburg. Positively nauseating.

But once the selloff ends, the buyers come back. They take the fluff out. They slash the margined players. And then the institutions that love this stuff come right back in and take it up again.

For me, a relative old-timer, it seems so capricious, kind of like "Will they ever learn?" But to

Matt "Coiled Spring" Jacobs

, these stocks are just that, coiled springs, where the fundamentals are great but the shareholder base isn't. After a selloff is the best time to buy because all of the marginal holders are gone. You get your biggest bang for the buck right now.

He has history on his side. The

Nasdaq

rallies hard after rate hikes, we have found, and we don't think this time will be any different.

And he has the fundamentals. You really want to be in

Dial

(DL) - Get Report

,

Colgate

(CL) - Get Report

,

Gillette

(G) - Get Report

,

Procter

(PG) - Get Report

or

TheStreet Recommends

Coke

(KO) - Get Report

? Can you really trust the fundamentals of

Kimberly-Clark

(KMB) - Get Report

or

Kellogg

(K) - Get Report

?

The only thing he doesn't have is valuation. But the valuations are

better

than they were a week ago, so the stocks are

cheaper

and should be

bought more aggressively

.

Darn that seamless logic.

Random musings:

We are holding the

biotech rotisserie league on the day of the

Genentech

(DNA)

secondary pricing (maybe as early as this week) as we think that could be the best entry point.

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