The Dark Side of the Moon

The new skepticism about stock splits can be viewed as healthy or deadly, depending on the time frame.
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Here's a scary thought: We just sold some IBM (IBM) - Get Report because we fear having too much on the sheets after it splits Thursday. Amazing. When you think you are on the dark side of the moon, everything looks so ... why, so awful.

Remember when we bought stocks for splits? We just did a backtest of the last 12 high-profile splits, and it was a push whether you made money. A push. You make no money now.

I remember when my mailbox used to be full of requests trying to figure out what stock might be the next to split. Now I dread a split because I will be taking in too big a position. Now I am trying to anticipate whether others will sell after a split. I got hit by this new negative phenomenon with

United Technologies

(UTX) - Get Report

, which swooned after the split, although that was exacerbated by a nasty arbitrage that made it sensible to sell UTX at almost any price and by

Sundstrand

(SNS)

.

Longer term, this newfound split skepticism is healthy. Splits shouldn't mean anything. Shorter term, it is deadly, as we still have plenty of people trying to play this game.

It's a sucker's game on the dark side of the moon.

Random musings

: People keep streaming in here aghast at how bad this

First Union

(FTU)

conference call was. Darn fundamentals getting in the way again.

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

letters@thestreet.com.