Tune Out the Static -- Value's Always There

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American Stores

(ASC) - Get Report

giveth and

Procter & Gamble

(PG) - Get Report

taketh away.

AMP

(AMP) - Get Report

giveth and

Medtronic

(MDT) - Get Report

taketh away. It's rough out there.

So let's take a moment and discuss what owning equities is all about. You should not own stocks because they are the only alternative to bonds and real estate. You should own cash if you want a default investment, not stocks.

You cannot rely on anyone to get you in and out of stocks. You must find stocks you like and can live with, ones that fit your investment parameters for more than just Dow 9000 or Dow 7000. If you can't, again, cash is a perfectly good alternative.

If you are spooked out of stocks by programs, and technicians, and people who come on in the afternoon on

CNBC

, then you should go into cash. Cash is not affected by stock or TV programs.

But if you can stand the pain, and find stocks that have rock-bottom value, you will be rewarded. American Stores was worth a lot more to

Albertson's

(ABS)

than it was to the mutual funds.

AlliedSignal

(ALD)

did not check in with

Bob Farrell

or

Ralph Acampora

before it made its bid for AMP. It did not say, "Hey, that's a head and shoulders, let's avoid that." It did not say, "Let's wait to see who is on "Street Signs" before we make out bid." And it did not say, "Wait a second, isn't the 200-day moving average about to get taken out and China going to devalue and Clinton get tested for the double helix on a dress?"

AMP, the largest maker of connectors in the world, one of the finest manufacturers and perhaps the last great independent mid-Pennsylvania business save

Hershey's

(HSY) - Get Report

(I'm a Keystoner), was worth too much to Allied Signal, to

Lawrence Bossidy

, one of the smartest operators in the business, not to go hostile.

AMP and ASC are not needles in a haystack. They happen quite frequently when stocks have been trashed and the new-low list goes to 580. They happen because companies do not look at the averages. They look at individual stocks. They take the long view. You should, too.

All of us are caught up in the intense day-to-day. I am most guilty of it. But that doesn't mean I don't look for value. Until I find that value, I keep money in cash. When I find value, I pounce. When I don't I wait, or try to wait.

Let's not forget in this incredibly confusing time that there is value. The value today is not in Medtronic. The value a week ago was not in P&G. But lower prices created value in PG and now I wish I had bought it in the low 70s. The value in Medtronic may not be in the 50s. But the 40s? I'll take a look.

Panic, fear, trepidation: not good. Clear-headedness, rigorous analysis, fortitude: good.

Yes, it is as simple as that.

Random musings

: My wife, after perusing the charts yesterday, says, "Don't trust anyone who tells you to get out now. Every chart I look at peaked months and months ago. If anything it is time to buy, not sell."

Too pat? Maybe, but common sense was always her hallmark. I said give me an example. She said, "How about this

Maytag

(MYG)

? Stock's gotten killed but business is good. Love the new washer." I said I was worried that there could be an economic slowdown from a stock-market decline. She suggested I call them and see what they think. I was transfixed by my screen, too busy to call. Right at the close Maytag expanded its buyback, saying they felt the stock had come down too much. Open mind one, closed mind zip.

James J. Cramer is manager of a hedge fund and co-chairman of TheStreet.com.

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 by sending a letter to TheStreet.com at

letters@thestreet.com.