Why not be super-bearish? Why not cash out and hit the road? Why bother to take any pain? Why not just shut the screen off and go home, and forget about it? Go see
again. Take in a matinee! Sure would be a House of Fun. No pain at all. Like a big Ben Gay bath!
October: Join the discussion on
Sorry bears, but I see opportunity and I am unwilling to be blind to it or chill from it or take a vacation away from it.
Let's get some stipulations here. This is October. As I said at the beginning of the month, there would be selloffs, maybe even a down 500 day. I got in shape for it. Now that it is happening, over a course of a couple of days, obviously, what am I supposed to do, panic just to please those who would want me to puke up stocks cheaply? Oooh -- really scary!
At the beginning of this month I wrote about how I was worried about the market and even though I had raised a lot of cash, maybe I should raise more. I did. I said that on the site. Numerous times. Now that it is coming in I get to bid and get hit.
To refresh, let's say I like
, which I do. I think Mel and Sum (does anybody call him that, kind of like subtract or Diff!) will be fantastic together.
I don't know when this thing will bottom. So we bid down. We just sit there and bid. We bought 10,000 at 45.5 today. We are not down an 1/8th on that stock.
We let the selling work for us as we gradually re-apply shares to our sheets --
Always with an idea that we are buying things that if they go lower we will buy more of them
. If CBS went to 43, I would not think, "Darn it all, why did I buy that 10,000 shares at 45.5?"
I think, "Hmm, the market is letting me buy a stock I like very much at a cheaper price." I would buy another 10,000. Sure, if I were a visionary, a seer, a clairvoyant and a madman (fact-check that last one, please), I would just wait to 43 and buy all 20,000.
Alas, I am human. I don't know where it will bottom. I do know I think it will be much higher later on and in the interim I don't think I will get crushed. I am using what is called a "wide scale" meaning. That means I am letting the stock get hit each time for a point or two before I buy more.
When I am really bullish on the stock market I use a much tighter scale, maybe 5000 or even 10,000 down every half-point. And when I am super aggressive about the near term of the stock and the market I might just, say, buy 25,000 shares right now if I thought the stock was going to go right up and to bid right underneath for more stock.
In other words, what I am saying is that we at
are in a cautious buy mode because I don't know when the selling will stop, but I do think it will stop. We are already oversold and there is a lot of negativity. That makes me more excited about buying, not less.
A number of people have asked me "am I ever bearish?" I always laugh. I am bearish on individual stocks that I don't like. I am bullish on the opportunities I see. In 1990 and 1994 I was extremely bearish and, at times, heavily short, which is why I made money in those tough markets.
If I thought we were going down several thousand points I would be short now and looking to buy in those shorts and then go long at much lower levels.
It is my judgment that that won't happen. If it does, I will be wrong. But, I am paid to make these bets. That is my strategy and the tactics I am using to pull it off.You now have my game plan.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long CBS. 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