Limit Orders - how does Cramer reconcile this? (re: CAT)

Michael Granoff · 07-19-2005, 11:11 AM

OK, so last night Cramer says we all MUST own CAT and we must own it before they announce earnings this week.

Great. But of course there is the Cramer rule that we only do Limit orders, not Market orders, and he recently expanded on that saying we should put no more than a 15 cent premium on the current ask. Fine. So last night the ask on CAT was about 50.75. I put in a limit order at 50.90. Today, CAT opens at 52.70! So my oder doesn't get placed. So I'm not in CAT. So Cramer would say that's a good thing, right, because it was a deal at under $51 but it's not a deal at nearly $53. But he thinks this is a great long-term play. So what if he's right, and the thing is at $85 in a year, and it never sees $51 again. Then it was penny-wise and pound-foolish for me not to just do a limit order last night, so I get in at $52 instead of $51.90. Big deal if it's a great long-term play. What gives?

Thierry Martin · 07-19-2005, 12:34 PM

Good point, and I was wondering about the same thing when he said that last night.

I think only you can decide what is right in a case like this. What has been happening, is that Cramer does his stock of the week, everyone buys it the next morning, and the price jumps up. It usually goes back to the previous level, and then all Cramer's viewers who bought the stock for a quick gain send him nasty emails.

If you are truly buying the story on CAT I would wait until later today to buy, or even tomorrow. My guess is there were a lot of orders this morning based on Cramer's call, and this created a shortage of supply.

NCDave · 07-19-2005, 08:59 PM

Michael, I'm in the same boat as you. I got on this morning, anxious to get some CAT, and saw it over $52, where Jim said NOT to buy

, so I didn't buy. He has been bullish on HAL for some time, so I took a look at that, figuring to pay around $46.42 for it. Unfortunately, it was being run up, and fast, just like CAT, but what the heck I figured, so picked some up at $47.75 and it closed out the day over $49.

Only time will tell whether this was wise or not. After all, it is MAD MONEY!

07-19-2005, 11:11 AM	#1
Michael Granoff new member Join Date: Jul 2005 Location: Hasbrouck Heights, NJ Posts: 1	Limit Orders - how does Cramer reconcile this? (re: CAT) OK, so last night Cramer says we all MUST own CAT and we must own it before they announce earnings this week. Great. But of course there is the Cramer rule that we only do Limit orders, not Market orders, and he recently expanded on that saying we should put no more than a 15 cent premium on the current ask. Fine. So last night the ask on CAT was about 50.75. I put in a limit order at 50.90. Today, CAT opens at 52.70! So my oder doesn't get placed. So I'm not in CAT. So Cramer would say that's a good thing, right, because it was a deal at under $51 but it's not a deal at nearly $53. But he thinks this is a great long-term play. So what if he's right, and the thing is at $85 in a year, and it never sees $51 again. Then it was penny-wise and pound-foolish for me not to just do a limit order last night, so I get in at $52 instead of $51.90. Big deal if it's a great long-term play. What gives?

07-19-2005, 12:34 PM	#2
Thierry Martin Site Administrator Join Date: Jun 2005 Location: Canada, in an igloo. Posts: 6,647	Limit orders and market orders Good point, and I was wondering about the same thing when he said that last night. I think only you can decide what is right in a case like this. What has been happening, is that Cramer does his stock of the week, everyone buys it the next morning, and the price jumps up. It usually goes back to the previous level, and then all Cramer's viewers who bought the stock for a quick gain send him nasty emails. If you are truly buying the story on CAT I would wait until later today to buy, or even tomorrow. My guess is there were a lot of orders this morning based on Cramer's call, and this created a shortage of supply. __________________ Free instant email analysis of your favorite stock.

07-19-2005, 08:59 PM	#3
NCDave new member Join Date: Jul 2005 Location: Sandhills, NC Posts: 6	Orders Michael, I'm in the same boat as you. I got on this morning, anxious to get some CAT, and saw it over $52, where Jim said NOT to buy , so I didn't buy. He has been bullish on HAL for some time, so I took a look at that, figuring to pay around $46.42 for it. Unfortunately, it was being run up, and fast, just like CAT, but what the heck I figured, so picked some up at $47.75 and it closed out the day over $49. Only time will tell whether this was wise or not. After all, it is MAD MONEY! __________________ David in NC \"Life is not a dress rehersal\" No amount of money can buy time

Thread Tools
Show Printable Version Email this Page
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode

Similar Threads	Thread Starter	Forum	Replies	Last Post
Jim Cramer Mad Money Performance Problems	insidemadmoney	Jim Cramer's "Mad Money" discussion	7	12-26-2005 05:03 PM
Question about Limit orders	Cosmosis	Stock picks and strategies	8	12-13-2005 11:25 AM
Question for anyone... should I be using the 'LIMIT' orders?	Prodigy	Stock picks and strategies	11	11-12-2005 04:01 PM
Cramer's daily top picks and Limit Orders	Kevin Wong	Jim Cramer's "Mad Money" discussion	3	08-30-2005 11:47 PM
Wacotrib.com - Cramer fireworks livening up stock market	Thierry Martin	Jim Cramer's "Mad Money" discussion	1	07-07-2005 01:05 PM