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"Three Stories the Shorts Haven't Read Right"

By Jim Cramer
RealMoney.com Columnist
6/18/2007 10:10 AM EDT

""My bullish stances was predicated on the fact that the shorts were 100% out of their minds."

That's Michael Comeau of the excellent Breakout Stocks team, which has had some fabulous wins. It was a response to a question I had about how he stuck with Zoltek (ZOLT - commentary - Cramer's Take - Rating) after I got off it -- I had a 100% gain and didn't want to look back.

Comeau knew that the secular wind story and Zoltek's carbon fiber sales to the industry assured three years of visibility. But just as important, he realized that after two good quarters in a row, Zoltek has defeated the shorts -- who have hung on for more pain.

This short nuttiness is a continual theme throughout this rally. It's not just a Zoltek. I have liked MasterCard (MA - commentary - Cramer's Take) for 100 points now and not once have I gotten anything but a negative riposte at every level. Last week during the Town Hall meeting at "Mad Money," I had the privilege of being with about a dozen people who were with me on MasterCard and not one of them had a bone to pick with me on it! (Ha!)

What's really amazing about this whole MasterCard run was that the shorts' objections stayed the same: "We are going to see a competitive offering by Visa and the consumer's going to slow." Sure, there will be a competitive offering by Visa someday, but what does that have to do with MasterCard's fundamentals?

The final short nuttiness is in Ceradyne (CRDN - commentary - Cramer's Take - Rating). Here's a company that has routinely blown out numbers, yet the shorts have been tenacious opponents of the stock. I have had the CEO, Joel Moscowitz, on "Mad Money" three times, and each time he explained patiently how the shorts have been wrong and how the orders keep coming and that the company can't produce body armor fast enough.


Lately there's been a spike in the stock, in part because the shorts thought a rival piece of body armor would win contracts. It hasn't; it won't.

These three ideas are emblematic of what I am talking about. They are examples of where the shorts simply got it wrong but have been unwilling to admit defeat. It's just plain wrong. That's why these stocks are relentlessly on the move.

Relentless. And for no reason. "

(in www.realmoney.com)