The market humbles you every day. Every day the market can make a fool of you. That's just the nature of the beast. There will always people who tell you that they are never humbled by the market, but I have a name for those people. I call them liars.
Let's take my
piece. For that little battle, that skirmish, I thought I had won. But the next day I was down big on my Yahoo and down bigger the next. That's kind of what happens. The market does it. I was humbled by Yahoo! last week. Pretty much in front of everybody.
Take my situation. For 18 years I pretty much thrash the market. I beat it handily. My 10-year record is one of the best in the business. Only a handful of managers have topped me. But I screwed up last year and didn't have a good year. It was an amazing lesson in humility. Partners pulled out. People laughed openly in my face, My email turned bitter. Chat boards? Forget about it. Can't even go there for the lies they tell about me.
That's kind of what happens. The market makes fools of just about everybody at some time or another. The best people get it wrong sometimes. I read the stories about
having tough quarters, and I can just hear people saying what a bunch of bums they must be. Didn't they have
? Didn't they own Yahoo!? Are they any good at all? Have they lost their minds?
That's wrong. These guys are brilliant guys. I would rather invest with them than just about anybody else in the world. I always want to know what they are thinking. Heck, they have long-term records that tell me how great they are even if they have a tough quarter.
I know a ton of people who own
. This morning they will all feel foolish. They will feel hurt and pained and upset. They have every right to be. Compaq did indeed let them down. But if you are one of these souls, shake it, dust yourself off, and don't second guess. Get back in the game.
This week is the anniversary of
, and I have penned a piece for a special issue that talks about my Cendant disaster. I know that was a huge cause for humility for me. Read it and weep, not for me, but for the game itself, because sometimes the game is tinkered with and we all get fooled.
At the end of this week I am going on vacation. I intend to do a special series to be filed daily about what I did wrong in 1998. Read it, learn from it, don't do what I did. Let me look foolish and be humiliated for you.
I accept that this market can humble me. My goal is to share the humiliation, to let you, who trade silently at home, or professionally at the office, know that you are not alone in making mistakes or missing out or getting hurt on a bad stock.
On Friday I had a special visit from one of our readers. (I make it as tough as possible for people to come see me because I am trying to keep my day job separate and I don't want to be disturbed.) She wanted to thank me for helping out, for showing her the institutional side of things, but most importantly, for admitting I make mistakes, too.
For that recognition, I was most grateful. But what made me especially happy was that she said that she had learned from my mistakes and has become a better trader. Wow! As I have said to many of you in e-mail. You made my day. Thanks!
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long America Online and Yahoo! and was short Compaq, 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