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Sep.28
9:19 PM ET
Monday, 28 Sep 2009
Cramer Has Trust Issues

Just as being too certain can cause problems, Cramer said Monday, being too skeptical can trip up investors as well. He learned this lesson the hard way by not backing Airgas when he had the chance. The result? Mad Money viewers missed a 41% move.

Cramer calls Airgas [ARG  Loading...      ()   ] CEO Peter McCausland “bankable.” After a long history of delivering solid results, Cramer trusts the man almost implicitly. That might be one of the reasons McCausland’s appeared on the show 10 times. But when ARG had dropped 46% between two of those appearances – May 8, 2008, and later that year on Oct. 24 – Cramer withdrew his support, despite positive statements from the CEO.

Well, Airgas beat its quarterly earnings estimates at the next report and upped its guidance. The stock shot higher from about $33, leaving Cramer and his doubt far behind. What’d he do wrong? 

“I think I let my fear get in the way of my judgment,” Cramer said.

As tough as the market was at that point, with Lehman Brothers collapsing a month before, Cramer blocked out all evidence contrary to his negative outlook. Even when that evidence came from one of his favorite CEOs. Investors have to be willing to believe a trusted manager with a proven track record of success. Otherwise that skepticism can cost them.

“Too much faith's a sin,” Cramer said. “So’s too little when it blinds you to an opportunity.”

Call Cramer: 1-800-743-CNBC

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