Sometimes we should know better. Today someone writes me that I should look at

Planet Hollywood

(PLHYQ)

.

Why? Is the logic that you can't lose more than 8 cents? I don't know, if you buy $50,000 worth of an 8-cent stock, I think you can lose $50,000.

Similarly, someone I trust recently urged me to buy

Fruit of the Loom

(FTLAF)

stock in bankruptcy when the stock was hovering in the low-single digits. But you can't speculate on stuff like that because the common almost always gets wiped out in bankruptcy.

Similarly, I have no sympathy for those who have lost money recently in

McKesson

(MCK) - Get Report

or

Conseco

(CNC) - Get Report

. These two stocks have had widely flagged problems; anybody who stepped into them -- and that sure is the right verb -- deserves to lose money because

you should know better

.

When a stock is low because it has problems -- widely known and severe problems -- sometimes it pays to take a pass. During the days when the world revered

Warren Buffett

he made famous the phrase, "There are no called strikes in this game."

That's true. But there are also some pitches we should know better than to swing at. Planet Hollywood is one of them.

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.