Ten times a day, people email me about how the market is going to crash soon. They always have some proprietary indicator that predicts the doom. They always sound authoritative and credible. Their arguments always are well documented and cogent.
To which I always say the same thing: You short it with your money.
Take this morning. I have, at one time or another, shorted all three stocks that just got huge bids overnight. I shorted
when I thought
wouldn't re-sign with the company. I shorted
when I figured it would miss its quarter -- in fact, I did that many times. And I shorted
when I thought it had moved up too much.
In every case, if I had held on, I would have been crushed. broadcast.com, which is up 1,213% since coming public, perhaps provides the most daunting lesson.
At no point did I think this company was worth what it might turn out to be worth until about a month ago, when I finally reasoned that, heck, if you can't beat 'em, join 'em (which is why I'm long broadcast.com).
Today I'll get more email from people pronouncing doom. The papers are filled with stories about how narrow the averages are and how likely they are to collapse. But I think about broadcast.com, Arco and King World.
And I say, You short it with your money.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long broadcast.com, although positions can 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 firstname.lastname@example.org.