The New Frontier of the Badlands

If you think after-hours trading is tough terrain, Cramer shows you the chaos coming out of Scandinavia in early-morning Nokia trading.
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We typically associate the Badlands with rough-and-tumble after-hours trading, a late 1990s version of a Western shootout, sans Clint.

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Message Boards. But they have nothing on the craziness coming out of Scandinavia in the early morning hours. You gotta go back to the Russo-Finnish war (good guys, anyone?) to find something more chaotic and dumbfounding.

Take the predawn shooting in cell-phone giant

Nokia

(NOK) - Get Report

yesterday. We don't like to waste any time when we come to work in the Badlands, whether they are in Helsinki or Tombstone. If hired guns can find lucrative work, we strap on some Peacemakers and get out there. But for yesterday's action, you needed a repeater.

It all began with a bad print, the closing trade for Nokia, which on our screens was 176. Mind you, we are all getting used to trading these multihundred-dollar stocks. Heck, they go up so fast now, who has time to split 'em?

But we aren't that thrilled with the chaotic nature of the once-faithful closing price. Ever since after-hours trading gained gravitas, it has affected our precious finals, the benchmarks we use to trade against the next day. Nokia's final wasn't anywhere near 176. It was actually 171. Nevertheless, the scorekeepers have become subjective, and everything keyed off that price, as in "Nokia's down 10, but nobody knows why."

Yeah, that's how the morning began. With one of those elevator-cord-cut openings and you stuck in the elevator, as I am always long Nokia. Kind of takes your breath away. Even after all these years of trading.

We make our calls to international brokers; we check the wires. Lotta "Beats me's." Then the news breaks that

Ericsson

(ERICY)

is halted. In the world we trade in, Ericsson is the perennial

Avis

(AVI)

, always trying to get past either

Motorola

(MOT)

or Nokia, but never first. In the background, we hear some talking head speculating that

Microsoft

(MSFT) - Get Report

is going to buy Ericsson.

Hey, what the heck, and

IBM's

(IBM) - Get Report

going to buy

GM

(GM) - Get Report

. Why not say anything?

It's early, the program managers are asleep and nobody ever gets hurt anyway 'cept us bad-guy traders.

Nokia quickly falls 3 more points on that heard-round-the-world canard. Now, Noke's at 163. Yeah, we call it Noke. We go in and buy some more. In typical Badlands fashion, we pay all over the lot from 163 to 166. Trading Noke's like trying to catch a frog in a pond. You go left; it goes right. You go right; it goes left. It always jumps ahead of you.

We call Ericsson in Sweden. There is nobody there. Par for the Swedish course. We call analysts. Their analysts. Our analysts. Nobody's around. Par for the American course. I keep thinking they are on the slopes or at some rink somewhere, but that's just because our only image of these countries comes from

Wide World of Sports

or the

Olympics

. They are probably in suits somewhere plotting world domination over really bad food. I mean, there isn't a single Finnish restaurant in New York that I know of, and I have had Ethiopian, Mongolian and Tasmanian food here.

Nokia sags to 162. We buy more.

The wires pick up a story about Microsoft and Ericsson in some sort of joint deal. We know now for sure that Nokia is not involved. Maybe someone is thinking this is a "Get Nokia" initiative? Nokia trades several hundred thousand shares between 163 and 165. We buy more. Trying to catch that frog with our bare hands. Could use a Net, I think to myself.

At this point,

Jeff Berkowitz

and I burn the wires trying to find out anything that says that Nokia is going to get stung harder than it has already. We come up with nothing. No Finnish downgrades. No Swedish downgrades. No Norwegian downgrades. No Danish downgrades. No German downgrades. No British downgrades. No

NATO

downgrades.

There will be no downgrades off of this -- all that really matters in the end. There is nothing earthshaking about the MSFT-ERICY deal, no money changing hands, no lost customers for Nokia, no obvious pain coming.

That's our etched-in-jelly conclusion.

We buy more. The stock begins to stabilize.

It is now about 7:30 a.m. and we are beginning to talk to our brokers. All we ask is that they flag us if someone is going to talk about Nokia so we don't get blindsided, midtrade, by a downgrade. You imagine a group of collective shrugs.

I say out loud that this sounds pretty positive for Microsoft, but Jeff urges me not to go there because the personal computer business remains "in flux," meaning not so hot. Jeff's been pushing this anti-PC rap and it has been making us mucho dinero, so I am not bucking him. Better to focus on B2$, which is the shorthand I am now using for B2B.

We buy more Nokia, still at 165. Someone is selling multiple hundreds of thousands of shares of Nokia at that level with many different brokers worldwide. Someone is giving up on Nokia and we don't know why.

Man, this seller is worrying me. He has unlimited firepower. Who has unlimited firepower and keeps carpetbombing the market with Nokia?

We meet off the desk over a cup of coffee. I press Jeff again, "What does this seller know? Everything seems fine with Nokia. What is this guy scared of?" Jeff can't figure it out either. I ask

Matt

to check out the boards, knowing that

TheStreet.com

doesn't have one yet for it, but to round up the usual board suspects. There is nothing there, either.

We are on our own against this massive seller.

We buy more. We have 100,000 Nokia. Oh man, we are the Nokia fund. I keep, for some reason, thinking of that

E*Trade

(EGRP)

ad, "Blow'd Up," and I see my picture and some man saying "Ohh myyy," as they blow me up with Nokia strapped to my back. Fiery crash. (Better they blow up that repulsive toaster at Brad and Julie's wedding -- remind me to plead with Steve Swartz to ax that annoying commercial.)

We hit the wires again. Nothing new negative on Nokia. And while Ericsson is going to be up, it is going to be up less than Nokia is down, unless you count the real close, which makes the decline and the advance an exact push.

I want to buy more Nokia. But it doesn't help out basis. It is still at that same level.

As one after another firm checks in with no downgrades of Nokia and an occasional reassurance or reiteration based on the lack of real news involving Microsoft, we sense we have a good one going. We take 10,000 more. It is now 8:15. You just gain confidence in the vacuum of no downgrades.

Everybody is now at work. The market grows more perfect. Others are picking at the seller. The stock stabilizes and then lifts to 166. I declare us home free. Nothing negative is going to happen, Nokia.

At that point we huddle. Do we scalp some, let some go before the opening and call it a good trade? Or do we go for the New York trading, which is habitually more positive than the Scandinavian Badlands, as Americans love Nokia as if it were their own stock.

We elect to go for New York.

Once the stock opens, the Nokia lovefest begins anew. The sellers disappear. Buyers come lapping, as they always do. Next thing you know, the stock is climbing north of 170 and we begin, slowly, to piece out Nokia in the style of our trading, 10,000 shares every half-point until our fund regains equilibrium. We book a great trade. Best of the day.

Yessirreee, the Finnish Badlands. They've got it all over the U.S. now that the homesteaders have taken over here. But don't forget to bring your Winchester.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Nokia, Microsoft, Motorola, IBM and E*Trade. 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.