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What happens if it gets too tough? What happens if the volatility gets too great? Won't people eventually pull in their horns until it is safe again? Can it ever be safe again?

These are the questions portfolio managers are asking all over Wall Street after today's topsy-turvy session. You have to understand just how sensitive we all are to this more difficult landscape. We don't like our performances to swing wildly day by day. We like to manage risk, but so far this year the risk can't be managed.

Big deal, you may say, the year has just begun. What are we all fretting about? Each year, however, draws its characteristics from January, and right now, we are all wondering, what the heck, who needs this kind of craziness? Is the whole year going to be like this?

Remember, we had a few wild swings last year. But beginning in October, there were no swings. The pendulum got tossed out. All we had was up. Sure, there were some days where the market gapped up. There were other days where it inched up. Still, on other occasions, it started down and then finished unchanged. We got pretty spoiled. Had there been dips, we would have bought them. However, there weren't even any dips!

This year, however, we are getting giant slaloms down followed by giant ski lifts up followed by colossal moves down again. It's the down portion, of course, that has us worried.

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Now we are getting whole years in a session. I have watched



trade in 50-point increments since the year began. I have gone from buying 5,000 shares of Yahoo! at a clip, to buying 500 shares every 15 points down. And that may be too aggressive.

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Don't get me wrong; as a trader I welcome volatility -- within reason.

These kinds of moves are not reasonable. As we finished the Yahoo! call tonight I turned to my partner

Jeff Berkowitz

and said it was too hard to call the next 25 points in the stock.

Twenty-five points

! This from someone who used to pride himself in calling the next quarter-point in a stock.

In reality I am being too generous in defining my own abilities. Maybe it is the next 50 points that are too hard if we catch enough big sellers or buyers intent on making themselves right.

For individuals out there maybe it seems like they have simply put more air in the ball or lowered the basket or widened the goal. Maybe it has gotten far more "high scoring." We are seeing more strikeouts and more home runs than ever before. It's terrific for the spectators.

But for those of us trying to gauge exposure, it's getting too hard to handicap. The tendency is to believe that these swings will have to resolve themselves somehow, with a blowoff to the upside or downside.

Me? I just think it will grow increasingly more volatile -- and I better get used to it if I want to stay on top of my game.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund was long Yahoo!. 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