Just because you have done the homework doesn't mean it has to work.

Many people who have bought stocks and made money in the past two years are now buying stocks and not making money. So increasingly they are reading up more about their stocks, boning up, trying to be sure they understand what they own. Often they are shocked to see their stocks go down on good news or excellent reports.

That's how it is in bad markets. In bad markets research isn't worth much at all. Stocks don't do what they are supposed to. It's not faulty work; it's just a bad tape.

The stock market is not like school. When I help my daughter do her homework and she does well, she gets a good grade. One follows the other. It leads to a simplistic belief that homework in this venue produces similar results.

Not in a bad stock market. In a bad stock market, you can do all of the homework you want and it doesn't matter. You can lose money. One of the reasons why I wrote the

nightmare series was to give you insight into when I started running money. I had done seven months of research on 10 stocks. Seven months! I devoted a massive amount of time to it. But just when I bought, the market turned sour and my homework was for nil. I was down a huge amount almost overnight. I have carped about technicians in the last few months, distrustful of their false sense of surety. Things just ain't that easy. But I have no illusions about the prowess of my fundamental research, either. That can very easily lead you astray in tough markets like these. Today, I am sure I will sell some of the very stocks that I feel best about fundamentally. I will do so because they are overowned and overloved by others using the same methodologies that I use.

Remember, we are in a tough and unforgiving market. Cash is working extremely well. I want more and more of it, if I can get it. But at this point I can only get it by selling stocks of companies with great fundamentals. Those are the ones that are going down the hardest. The goal in periods like this is to stay in the game, not to make a lot of money. You want to stay in the game for when it gets better. It does get better.

If you can survive this market, you will make a lot of money when it gets better. But if you can't survive it, all of the homework in the world won't matter if you have no money left with which to invest.

Random musings:

US Air

(U) - Get Report

was put on Earth to torture hedge fund managers. I remember when Michael Steinhardt rode this one down -- my wife was still there. And then Julian Robertson at

Tiger

. Now

it sells! Now, after causing so much pain! My wife told me recently that it would be "incredibly ironic" if, after all the pain US Air has put the Street through, it now sells out. Maybe irony can make you money after all ... For those asking what the

Trading Goddess

is thinking, she believes that we are much closer to the end than to the beginning of the pain. She was a heavy buyer into the

1994 scenario when she last worked. A few more days like yesterday and she will have to go back to work!

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. 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.