Cramer: "Pain's Just a Part of Playing the Game"
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Cramer: "Pain's Just a Part of Playing the Game"
"Pain's Just a Part of Playing the Game"
By James J. Cramer
RealMoney Columnist
3/23/2004 9:52 AM EST
"OK, everybody -- and I mean everybody -- take a deep breath and calm down.
Have some faith in the system. Have some faith in the markets. Stop viewing this session or that session as the end of the good times as we know it.
Start remembering the pain of the first five days of October 2002 or the first five days of October 1998.
Go back into your diaries or trading journals -- which are so vital to doing well -- and see what you wrote then. Try to recreate some of the pain of the other bad days so as to recognize that this pain, far from being more searing and horrid than other pain, is simply just another version of what it is like to lose money.
Are we on edge after Madrid? Sure we are. Do we expect the terrorists to attack here before our election to make it so Bush loses, because, well, it worked in Spain? Of course. Should we buy no stocks until the Hamas strike because we are a pitiful helpless Democracy and the bad guys have all of the cards and can kill us at will while we fight for judges to issue subpoenas?
If you want to live your life that way, fine.
Don't buy.
Heck, sell!
Yesterday was a trying day and on all trying days lots of people capitulate and leave the table. That's why I always preach that you must do whatever is necessary to not be one of those people. It is why you have to take profits, and not be a pig.
It is why you have to be diversified. It is why you have to avoid the most dangerous stocks. It is why you have to have personal responsibility and not blame others, whether they be the terrorists -- even though they are deserving of blame -- or Bush, who I think is undeserving.
It is why you can't trust the gurus even when they tell you to trust them. My email is filled with the usual vitriol: "Why aren't you addressing that loser Charter? How could you stick me with Nortel?" And believe it or not, I still take it personally and seriously.
Then I get a good night sleep, talk over my daughter's making the honor roll, do some charity stuff in town to remember what really matters and I plunge right in.
And I still expect to take another beating, because this is the stock market, where things go wrong and where it is so difficult at times to make money that we have to be, well, hold your breath here, professional about it.
We have to develop a pain tolerance. We have to develop a sense of humor about it. We have to lighten up and remember that it is just money. We have to do whatever and say whatever we can so we don't just give up and put the money in our mattresses.
We must ask ourselves, did we expect it to be easy all of the time? Did we really believe that we finished the bear market and that from now on stocks must go up? Did we really think that the market being down 10% signals an all clear? Did we really think that we have had so much pain that it is time for pleasure? That we are due for pleasure? If people think that, it shows they do not understand the markets.
These frivolous pieces of paper that work on supply and demand and know no pain as we trade them down aren't about to reverse themselves just because we've gone down a lot. They will reverse themselves at precisely the point when the most people have sold and given up and quit and live in fear of their next buy.
They don't bottom at 14 times earnings like they don't top at 38 times earnings. They don't bottom when I say they should bottom and they don't bottom when Doug Kass says they should bottom or Byron Wien or Stan Druckenmiller or George Soros or Michael Steinhardt says they should bottom.
They bottom when they are darn good and ready and not a second before then and you have to know only one thing while you wait, which is to not get so discouraged that you are not there for that moment.
So, go ahead and blame me if you bought too much last week, if that will keep you in the game. But remember that I preach fallability of the markets, I preach selling when things are good so you have enough capital when things are bad, I preach taking things off the table.
And learn to deal with the pain, because if you don't, you will miss the next opportunity and be driven out of the game entirely.
Suck it up.
Got it? "
(in www.realmoney.com)
By James J. Cramer
RealMoney Columnist
3/23/2004 9:52 AM EST
"OK, everybody -- and I mean everybody -- take a deep breath and calm down.
Have some faith in the system. Have some faith in the markets. Stop viewing this session or that session as the end of the good times as we know it.
Start remembering the pain of the first five days of October 2002 or the first five days of October 1998.
Go back into your diaries or trading journals -- which are so vital to doing well -- and see what you wrote then. Try to recreate some of the pain of the other bad days so as to recognize that this pain, far from being more searing and horrid than other pain, is simply just another version of what it is like to lose money.
Are we on edge after Madrid? Sure we are. Do we expect the terrorists to attack here before our election to make it so Bush loses, because, well, it worked in Spain? Of course. Should we buy no stocks until the Hamas strike because we are a pitiful helpless Democracy and the bad guys have all of the cards and can kill us at will while we fight for judges to issue subpoenas?
If you want to live your life that way, fine.
Don't buy.
Heck, sell!
Yesterday was a trying day and on all trying days lots of people capitulate and leave the table. That's why I always preach that you must do whatever is necessary to not be one of those people. It is why you have to take profits, and not be a pig.
It is why you have to be diversified. It is why you have to avoid the most dangerous stocks. It is why you have to have personal responsibility and not blame others, whether they be the terrorists -- even though they are deserving of blame -- or Bush, who I think is undeserving.
It is why you can't trust the gurus even when they tell you to trust them. My email is filled with the usual vitriol: "Why aren't you addressing that loser Charter? How could you stick me with Nortel?" And believe it or not, I still take it personally and seriously.
Then I get a good night sleep, talk over my daughter's making the honor roll, do some charity stuff in town to remember what really matters and I plunge right in.
And I still expect to take another beating, because this is the stock market, where things go wrong and where it is so difficult at times to make money that we have to be, well, hold your breath here, professional about it.
We have to develop a pain tolerance. We have to develop a sense of humor about it. We have to lighten up and remember that it is just money. We have to do whatever and say whatever we can so we don't just give up and put the money in our mattresses.
We must ask ourselves, did we expect it to be easy all of the time? Did we really believe that we finished the bear market and that from now on stocks must go up? Did we really think that the market being down 10% signals an all clear? Did we really think that we have had so much pain that it is time for pleasure? That we are due for pleasure? If people think that, it shows they do not understand the markets.
These frivolous pieces of paper that work on supply and demand and know no pain as we trade them down aren't about to reverse themselves just because we've gone down a lot. They will reverse themselves at precisely the point when the most people have sold and given up and quit and live in fear of their next buy.
They don't bottom at 14 times earnings like they don't top at 38 times earnings. They don't bottom when I say they should bottom and they don't bottom when Doug Kass says they should bottom or Byron Wien or Stan Druckenmiller or George Soros or Michael Steinhardt says they should bottom.
They bottom when they are darn good and ready and not a second before then and you have to know only one thing while you wait, which is to not get so discouraged that you are not there for that moment.
So, go ahead and blame me if you bought too much last week, if that will keep you in the game. But remember that I preach fallability of the markets, I preach selling when things are good so you have enough capital when things are bad, I preach taking things off the table.
And learn to deal with the pain, because if you don't, you will miss the next opportunity and be driven out of the game entirely.
Suck it up.
Got it? "
(in www.realmoney.com)
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