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"Find Unique Openings on Weird Day"

By James J. Cramer
RealMoney Columnist
5/28/2004 9:03 AM EDT



"We have the potential for a really weird day. Month-end markups, for the bold and the fearless. A three-day weekend, the last big three-day weekend for our enemies to make us look bad in Iraq and elsewhere. Traditional summer rally chatter. Sell-in may people come back. Lots of crosscurrents. Thin volume.

What do you do?


You look for anomalies and you use them to clean up your portfolio or pick up something you couldn't otherwise get cheaply.

Let me give you an example. Last night on "Kudlow & Cramer," Scott Rothbort, who writes for Street Insight, talked about how some hedge funds are bear-raiding stocks using ETFs. Typical stuff: Buy puts on the stocks in the ETF, blow out the ETF badly in a sloppy short sale with no upticks and then sell the puts. It's garden-variety legal manipulation.

If I were back at my hedge fund, I would be looking for this process so I could take advantage of it and grab some of the knocked-down stocks at good prices. It's a great moment to buy and could be exacerbated by today's thinness.

Or, if I had something I didn't like, I'd figure that the mark-up folks would protect the stock so I could get out of it at a better price than I ever could have otherwise.

I never understand why people are so reluctant to take advantage of days like this. They are perfect for pruning or picking off bargains.

But then again, we usually don't have enough conviction to do this stuff, to sell stocks that are ramping artificially or, even tougher, to buy stocks that are bear-raided down.

It's too bad. This is the true stuff of outperformance."

(in www.realmoney.com)