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Why is this business so hard? Because reasonable people can disagree. Because stock prices are based on popularity, not principles. Because this is show biz, not Accounting 101.

Take last week. On Thursday I gave a presentation about stocks that I want to own as part of a charity group, Tomorrows Children, which helps a children's hospital in Jersey. Two presenters before me was Jim Chanos, a professional short-seller whom I respect immensely. It was through Jim's work that I avoided

Boston Chicken

(BOSTQ)

and never believed in

Oxford Health

(OXHP)

. He steered me clear of

Conseco

(CNC) - Get Centene Corporation Report

, too. Mind you, when I say "through Jim's work," what I mean is that I've heard him speak or read about the stocks he dislikes. While I've met him a couple of times at hedge fund gatherings, we don't collaborate. (I mention all of this because the ongoing board cesspool has people like

Herb Greenberg

, Chanos and me getting together regularly in smoke-filled rooms to plan assaults on great stocks.)

Anyway, Chanos presented the case for shorting stocks like

4Kids Entertainment

(KIDE)

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-- although he didn't mention it outright. The idea behind the short was that KIDE gets its revenues from Pokemon and Chanos believes Pokemon has to peak because, well, they all do in the end. He talked about how he has shorted these fad stocks before and they have always turned out to be big home runs. He acknowledged, however, that they

tend to last longer

than he expects. He also pointed out that these stocks, once they stop moving up, seem very cheap on earnings because the earnings are peaking. Finally, he pointed out that his young kids are no longer into Pokemon, so it must be over. He made me want to call stock loan immediately to see if I could borrow any KIDE to bet against it.

The very next morning my trainer, Mike, comes in and he's all excited. He has heard that Pokemon is introducing 100 new characters and that the kids will want the cards for them all, so he bought a ton of KIDE the day before. He wanted me to buy it. He couldn't imagine how he could lose, as the stock sold so cheaply to its earnings.

So at dinner that night I asked my kids if they still loved Pokemon as much as ever. Yes, of course, my eldest says, and there are 100 new characters coming out and she wants to buy the cards for every one of them and learn them.

As fast as I wanted to short KIDE, I now wanted to cover it and go long! This one sounded like the perfect bash -- the shorts-full-speed-ahead idea that I'm looking for right now.

Of course, I'll end up doing nothing. I respect the rigor and history of Chanos' analysis of fads. But I also recognize the power of capitalist institutions to evolve into higher and different life forms to keep the balls in the air.

And I understand the befuddlement so many feel about the stock market, given that neither Chanos nor my trainer could

both

be right at the same time.

The befuddlement stems from a fundamental truth: The game is harder than the

Ciscos

(CSCO) - Get Cisco Systems, Inc. Report

and the

Intels

(INTC) - Get Intel Corporation Report

make it seem. That's why, if you're going to do it yourself, you must at least do enough homework to understand the bear case, so it doesn't get you down or, ultimately, triumph over you.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Cisco Systems and Intel. 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.