Trading Cult CEO’s

Considering the spotlight, flash pots and red carpet you’d think you were at a Hollywood premiere. And the stars we’re talking about do have considerable clout, but they’re not opening a new movie. They are, however, the marquis names of Corporate America. Meet the celebrity CEO.

Their genius is given full credit for lifting stocks to new heights. We’re talking guys such as Chrysler'sLee Iacocca, Sunbeam'sChainsaw Al Dunlap and Microsoft'sBill Gates.

But be careful. Their fans are fiercely loyal and when these CEOs go, the hero worshippers also flee. Typically shares go south, as well.

Case in point: Steve Jobs and Apple . This week, Apple's CFO merely dodged a question about Jobs’ health on a conference call. And the stock wiped out $6 billion in market value in one tick.

So beware followers of Apple, Berkshire Hathaway and NewsCorp. When the celebrity CEO moves on a real drama may ensue for your portfolio.

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If you want to know how to trade it, Make says to only get involved with companies that are institutions; ones which will outlast the CEO. He likes Nike and Charles Schwab .

And if you play any of the celeb CEOs, make sure to own puts so you limit your downside risk, adds Karen Finerman.

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Trader disclosure: On July 24, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (WMT), (MSFT); Finerman Owns (GS), (WM); Finerman's Firm Owns (SUN), (TSO), (VLO), (MSFT); Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (BBT); Seymour Owns (AAPL), (BAC), (F), (MER), (MSFT), (TSO), (BX); Seygem Asset Management Is Short (MTL); Seygem Asset Management Owns Gazprom

Terranova Owns (YHOO), (INTC), (IYT), (BNI), (GOOG), (CME), (RIMM), (VLO), (SA), (XLF), (FCX), (SU); Terranova Is Long Crude Oil September $154 Calls, Terranova Is Short Crude Oil September $130 Calls, Terranova Is Short Crude Oil September $130 Puts, Terranova Is Long Gold Futures (December)

Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (DBV), (RWX), (LNET), (EXR), (SKT), (DLR), (IGE), (ARE), (DBC), (ABD), (OFC), (CLB), (BLV), (CNTY), (FL), (HPC), (PSPT), (ESS), (OIIM), (BIG),(ENG),(PFD),(DRH)

Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO; Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)

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