When we put paid to this year, we are going to have to do some serious introspection about the rules of the game. Last year at this time, we were filming a pilot for "TheStreet.com"
TV show and I was debating the value of stock splits with
. I was taking the absurd, unrigorous, foolish, silly position that splits mattered. Greenberg was taking the intelligent, high-road,
Graham & Dodd-ist
position that splits are meaningless.
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A year later, and we wouldn't even bother. Herb's position seems hopelessly outdated, a relic. Even arithmetically, it still makes all the sense in the world.
So what that splits don't matter. All I have to do to make money is to know which stocks are going to split next. I was long some
on the outside chance that it might announce a split. Bingo! I tried to buy some
today betting that a split could be in the offing. I took down some
with this unrigorous, foolish, silly position in mind.
Instead of lamenting how pathetic all this is, I revel in it and seek to figure out what has changed. For me, what's changed, frankly, is that individuals are in this market big-time and they can't afford to buy enough shares to make it of interest unless companies split their stocks. I am conscious through my wacky Friday interactions with people on
Fox News Channel's
"Fox & Friends" (where I try to play buy, sell and hold 100 times in an hour) that people want stocks they can buy more than 4 shares of. They can't buy more than that of Yahoo! up here or CMGI for that matter. As it is individuals that are driving these stocks, a split takes on new importance.
Sure, it would be great to try to find a dollar's worth of value in 50 cents worth of stock, instead of two 50 cent pieces of value in a dollar stock, but that's simply not this era.
But I gotta make money. I can't play it like an intellectual. That, above all, turned out, at the turn of this century, to be the ultimate fool's game.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Yahoo!, CMGI and Phone.com. 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