This is typical Cramer...
On July 26, 2005, Cramer interviewed Aleks Cukic, Intuitive Surgical's vice president of business development and strategic planning, on the show. The company had just announced blowout earnings, and Cramer was convinced. "Intuitive Surgical is a winner," Cramer said. The stock went on to open at $63.16 the next day. Two days after issuing the buy, Cramer had senior MarketWatch columnist Herb Greenberg on the show. Greenberg was cautious, picking out risks in owning Intuitive Surgical, and Cramer agreed. According to the recap, "Cramer said it would be silly for investors who have big gains to not ring the register after such a big move in the stock." The next day the stock opened at $69.21.
A 9.6% gain in two days is nothing to scoff at. The problem is that if that trade was done in a taxable account, triggering short term capital gains would have cut into more than a third of those returns.
Cramer regained his bullish tone on Sept. 6. "I think the great quarters are going to continue," he told the caller. The stock opened the next day at $69.38. Yes, you have to give Cramer props in that the company didn't do much while he was away, though buying in a few pennies higher than after his July warning also came with the extra costs of two broker trades to step out and step back in.
The September call was a juicy one. Two months later, he issued a colorful kiss-off. "You should ring the register," he said on Nov. 9. "Didn't you ever take that astronomy course that tells you how high you are?" The stock opened at $95.70 the next day, so one would think that a 38% gain in two months wouldn't leave too many investors smarting.
However, just five days later, with the stock in triple digits, he grabbed the company by its bullish horns. He once again had Cukic on the show, and it's amazing what three trading days can do for one's disposition.
"You don't get in the way of these monsters when they're rolling," he said on Nov. 14. "This stock goes higher because they're nowhere near saturation. I think it's still two thumbs up for ISRG."
The stock opened at $105.50, angering the astronomy students who had taken his advice a few days earlier and bailed in the double digits.
On Dec. 13, pointing out that the stock had tripled since the beginning of the year, Cramer remained bullish. "You're in the House of Pleasure," he said. "Ride that stock another 10 points." The stock opened at $118.89 after the show.
Did he wait for those 10 points? No way. "I now want to ring the register," he said on Jan. 5, 2006, lumping the company together with
Syneron Medical on his sell call. "I think ISRG has overstayed its welcome on the 52-week-high list." The stock opened the next day at $117.73. It wasn't necessarily a fair comparison, because Syneron had just warned that it would miss its 2005 revenue target.
CNBC addicts who followed Cramer's advice on Intuitive Surgical every step of the way over the last six months may feel richly rewarded. Despite the trading costs, missed gaps, taxable short-term gains and tax-filing hassles, they would have come out ahead. The three round-trip trades would have resulted in a 59% overall gain, reduced to a still respectable sub-40% after the taxman's cut. That's without accounting for the various charges involved due to weaving in and out of the shares. One can't dismiss those nibbles. It could be substantial, especially for smaller investors. Still, it seems like a pretty enriching string of trades on the surface.
However, that's no match for buying in at the mid-$40s 10 months ago -- or close to $70 just four months ago -- and riding it up to the triple digits the easy way.
Buy and hold may be a boring mantra, but it works even for volatile growth stocks.
http://www.fool.com/investing/high-growth/2006/01/09/cramer-vs-cramer.aspx
Cramer trashes buy and hold but in reality, buy and hold trashes Cramer!
