The Micro vs. Macro Dance

What to do when company-specific news is good, but the big economic indicators are egging the Fed on.
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It's time to reprise why it is so hard here. It is difficult to strike a balance between the micro and the macro. For example, in the micro news, the company-specific stuff, we heard so many great things in wireless, in telco equipment and in semiconductor equipment manufacturing and in semis that we can't leave those stocks.

But the macro news, the rest of the economy, is very difficult because -- well, frankly, don't you have to

expect

that

Greenspan

will just hammer us the next time he talks? Don't you think he will say bad things when he speaks if the market is up because of the red hot consumer spending? Don't you think that Greenspan will be your enemy until we see some break in these numbers?

We think YES!

That's why we are buyers of the area that is good and sidelined for the rest. That's why we have a substantial cash position. Because of that cash position we wanted to make a bet that maybe we would see more benign macro numbers. We didn't.

That bet was WRONG! Someone emailed me this morning and said, "These reports aren't helping us. We don't need to see you flip-flopping."

To which I say: Oh Lordy, come on. This is real life. This isn't the fantasized, sanitized money-manager gobbledy-gook that you see on TV. We screwed up. We made a mistake. We got it wrong. (

Jeff Berkowitz

just hung up a sign on his door that says "Dr. Berkowitz, Cerebral Proctology." That pretty much says it all.)

I can't help it if we get it wrong. We are not the Laurence Olivier of money management. We can't act that we did it right if we didn't. We can't lie to you. We wish we had gotten it right. We didn't -- unlike those managers you see on TV who are NEVER WRONG!!

But

we recovered and now we are playing it our way: lean, with some buys in the sectors we like.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. 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.