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| James Cramer is one of the many market guru TV types out there, the co-founder of the street.com and with his own cable shoe—Jim cramers real money. There is something called the type A personality. The A stands for Annoying— the screamer type. Jim gets a triple A plus rating. To scream, for him, is normal conversation. But we as investors have a craving to learn and from who we learn is no importa. Jim was in Los Angeles last month to hawk a new book and during the course of an interview he said: "the stock market is a suckers game". Those were his words. On that very night I attended a meeting— an investment club meeting—a group that subscribes to a common investment style popularized by William O'Neil, the founder of IBD--Investors Business Daily (Ive written about O’Neil elsewhere. Go to: archives/my rise and fall and rise again in the stock market) The group meets once a month at the Ocean Park branch of the Santa Monica library and the charts for a handful of stocks screened from the pages of IBD are thrown up on the wall and we go back and forth for a bit and a consensus taken for adding the stock to the watch list—or not to add. On this night one of the stocks discussed was Veriphone (PAY). Veriphone makes these little hand held wireless devices that verify a credit card purchase there at your table in the restaurant or down in the garage of the car rental agency or at the slot machine of your friendly neighborhood casino, etc—just another of the many amazing ways technology has simplified our lives. But there we were at the library with the veriphone chart on the wall and everything about this one said: buy. The stock was on a tear—up 70% for the year—and beginning to consolidate around a new buy point following a correction. The fundamentals were good—even great: sales, earnings, return on equity, etc and also some solid numbers relating to mutual funds and the large institutional investors—a key element as O’Neil sees it. Its the accumulation of stock on the part of the large institutional investors that drives a stock. If these people are buying maybe you should be too. Its called: common sense. So there we are going back and forth on Veriphone and the consensus is favorable and on it goes to the watch list. Lets move ahead three days. Let me repeat: 3 days. Im home, lying on the couch, watching my favorite TV show—Nightly Business Report. NBR features a segment—stocks in the news—the best and worst of the day, and now as I watch what stock should make an appearance in the worst category but—you guessed it—Veriphone. The company had issued a release--a “restatement of earnings” release. What does this phrase—the restatement of earnings—mean. It means that all those great earnings of the last several quarters—or even further back werent so great. They were inflated—either willfully or via some other unfortunate accounting stumble. Whatever the cause--the market doesnt care. The market fears one thing and that thing only: uncertainty. So now Veriphone, highly touted by my investment group—and a pretty savvy group at that—takes a 45% hit. In the blink of an eye it goes from 46 to 27. The chart looks like the edge of a cliff— straight down. I thought of Jim Cramer and his remark: the market is a suckers game. I must agree. But—thats the market. With the good goes the bad--always. The only reaction is to keep punching. Maybe the next time the news will be great instead of horrible and the chart of the stock will resemble not the edge of a cliff but a splendid erection. |
jim cramer
the greatest
stock investor
of all time--
Jesus. Why?
Because he is
the only one
who knows
what is going
to happen
tomorrow.
stock investor
of all time--
Jesus. Why?
Because he is
the only one
who knows
what is going
to happen
tomorrow.
| Stock market thought for the month: "To be wrong is acceptable. To stay wrong is unacceptable"--Mark Minervini (the minervini fund) |
