'Mad Mail'

General Question...

Q:      Booyah Jim!
I can’t seem to reconcile in my mind your aversion to placing stop-loss orders instead of “schintzeling” a portion of a holding (or half in the case of a double) to preserve some profits. Either approach preserves some profits, but a stop-loss order preserves the potential upside gain if the stock continues to climb. Please explain again why you don’t recommend using stop losses.
Rick

Jim:    Funny you sent this, my friend Matt Horwein, who is one of my associates and does some accounting for me, was saying that I ought to suggest this tonight for the sell block… that maybe there are a lot of stocks that have moved up, people should be selling… I agree that you should always be taking profits… we have had a very big run… I am concerned about stop-loss orders because in an extremely volatile market, this is less volatile than it was a month and half ago, you could literally be picked off…you put a stop-loss order in for Exxon at $69, touches $69 and goes back to $72... and you say why did I do that, why did I not just monitor it myself… volatile markets mean that you have to be a little more hands on when you want to sell, and a stop-loss takes that out of you… but I still think that Matt Horwein is right, that into this strength you should be lightening up on some stuff… there are still things that are going wrong.

'Mad Mail'

JPMorgan (JPM*)

Q:      Cramer,
You’ve been talking a lot about taking profits and playing with the house’s money. you have also recommended buying small amounts of good companies instead of many shares of a dog. My question is where do the two meet? If I only had enough money to buy a few shares of a great company like JPMorgan, which had a monster move this spring, how do I protect my gains without losing all of my position?
Mark

Jim:    Mark, great question… I address this in Real Money: Sane Investing In An Insane World, you have 100 shares of JPMorgan, you take 25 shares off up 10 points, and then you take another 25 shares off about another 10 points, and then the rest is playing with the house’s money… you do not need to sell anymore… that is why I favor my so called sell out position… that is what works… if you still have problems understanding the scale out… get Sane Investing In An Insane World.

'Mad Mail'

TriQuint Semiconductor, Inc. (TQNT)

Q:      Jim,
I have my eye on TriQuint Semi. It’s balance sheet isn’t impressive, but considering its chips are currently being used for the iPhone & multiple models of the Blackberry, is it a smart pin action play?    - Brandon

Jim:    Brandon, we have said over and over again that neither TriQuint nor RF Micro Devices Inc. (RFMD) is as good as Skyworks Solutions Inc. (SWKS), that is why we invited David Aldridge on… may I remind people that QualComm Inc. (QCOM*) remains my favorite in the group, they are going to have bust out earnings… we saw that today from a number of trade papers… QCOM, that is why I own it ActionAlertsPlus.com, my charitable trust… it is my largest position, and you heard it, and my subscribers have heard it… I am not selling.

'Mad Mail'

QualComm Inc. (QCOM*)

See TQNT comments above for:
QCOM*