Why investors should resist the easiest course in a difficult market

Forty-two years ago, right now, I was a third-year law student trading options between classes on a sweltering day as if they were cold sodas. I loved semiconductors at the time - National Semi, Texas Instruments and Motorola. I also worshiped IBM, always made these searches long, and Monolithic Memories was my favorite feature. It's good to have a specification. I was crushing it, I was able to pay off my Banco Popular, Chase, Chemical, and Harvard Trust credit cards (only three left) and crushed some of my student debt as well. But then I had the misfortune of having a toothache, and a classmate said: "Go see Dr. Traurig in Back Bay, he's the best." This was one of the worst financial decisions I have ever made; Not because Traurig cost a fortune, which he actually did, but there was a financial magazine in the waiting room and the cover story was telling you it was time to make money from technology. It was very dangerous. People were making a lot of money by being greedy, but a storm was approaching that could turn into a Cat 5 hurricane at any moment. I remember cursing myself for going into training towards the end of the process and having to wait until the next day to get rid of all the technical call options. That magazine, that skeptical journalist, the person who declared this a turning point for technology, stopped me from paying off the rest of my credit card debt before I went to New York to start working full time at Goldman Sachs. Of course he was right. Tech was dead for at least the next three weeks. Then he rose like Lazarus and continued for another 42 years, until now. The question for me is: How many people like me got blown up in that dentist's chair? Frightened and frightened, the only way to ease the pain is to sell. This is the real reason why so few people make money in the stock market. Now I stick to the best of technology. Do you know why? Not because the technology is anything special. But because at any given time there are a bunch of great companies with tremendous products that are in great demand, and the majority of them are in the technology sector. There were lots of chunky ones. National Semi never really made much money. Texas Instruments stopped its rapid growth years ago. I have no idea where Monolithic Memories is going. But there are some companies that survive, like those left behind by Motorola or IBM, and there are others that have disrupted entire industries and are still on top. I love what we have, not because it's technological. I love them because they are terrific companies with strong moats and tons of smart people producing incredible products. When their products become mine and their good people leave, leaving them defenseless against others, I will follow suit. But I'm not going to do what I did in 1984 or what a lot of people are doing now; This means quitting the job, even if that is not the case, because the process is over or because the companies are too big and their business is not growing like it used to. Why let the facts get in the way of a good negative story? The situation is difficult now, but no one said it is difficult to get out of here now; This is always the easiest way. This is what you might want to get. I say there should be better reasons to act than fear. (See here for a complete list of stocks in Jim Cramer's Charitable Trust.) When you subscribe to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trading alert before buying or selling a stock in his charitable foundation's portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trading alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH THE DISCLAIMERS. NO CIVIL OBLIGATIONS OR DUTIES EXIST OR SHALL BE RESULTING FROM YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT CAN BE GUARANTEED.