The Next Step

Still counting his blessings at having escaped slaughter, the trader is back to business as usual.

Author:: Jim Cramer
Publish date:: Apr 27, 2000 11:08 AM EDT

Back to business.

Got out alive from buys that we didn't think we would be able to escape from. Now we are in shape to do what we do best, which is pick our spots.

It is very confusing when you get it wrong -- meaning you expect to be slaughtered -- and it goes higher. I think the combination of short-covering and belief that tech can be owned through inflation contributed to our lucky gamble. I call it lucky because I am a realist.

I worry that the

Fed

will tighten aggressively because it is behind the curve. That is not a wrongful worry after these numbers. A tightening will impact many, many sectors in the old economy negatively if it happens. We managed to be able to get out of what we put on in the financials and the foods and the cyclicals. We shorted the

QQQs

(QQQ) - Get Report

to hedge our tech exposure. We won't blow out of our tech here because tech had great earnings. We want tech to go lower so we can buy more. We want wireless lower so we can buy more. We are

very encouraged

at how the

AT&T Wireless

(AWE)

deal fared and it emboldens us to buy weakness.

We can't believe the market let us out of our

Pepsi

(PEP) - Get Report

and our

Citi

and some of our

Mellon

(MEL)

without sizable losses. That made no sense to us. We should have been taken apart on those and we figure we got bailed out by some sort of

S&P

short-covering rally.

Anyway, the market certainly seems a little more forgiving than we thought.

All that said, if they come down again WE WILL DO THE EXACT SAME THING WE DID YESTERDAY BECAUSE PEOPLE ARE STILL WAY TOO NEGATIVE. WE KNOW THAT FROM THE WAY IT BOUNCED.

Weird day. Confirms to us that everybody is too negative, including ourselves. But also makes the stock picking really rough. We can't buy anything that will get hurt if the

Fed

raises rates 50 basis points fast.

But we have to buy tech that comes down because it seems immune to rates, as silly as that might sound. And we wish we were still at the game last night, rather than at our turrets (a grim attempt at local humor).

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Mellon, AT&T and AT&T Wireless. 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.