Cramer: This Is Why You Hold On to a Stock

 | Feb 17, 2017 | 12:10 PM EST
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This market makes it tough for you to sell.

Yesterday, we scrambled the jets trying to get our arms around the idea that traders were dumping Kraft Heinz (KHC) even though we saw a glimmer of growth. Somehow these flippers were upset that Kraft Heinz didn't say, "We are going to buy a cereal or soup maker," which, of course, would be dumb as wood.

As the stock fell, we were stuck with our usual restrictions but told members of our club that we would hold on or buy the stock because, as far as we were concerned, you had not one reason -- the possible acquisition of a food company -- but two -- the potential turn in the organic growth of what had seemed to be a tired pantry company. (Kraft Heinz is part of TheStreet's Action Alerts PLUS portfolio.) 

We never thought there could be three -- a possible takeout of the whole shebang, which seemed so unlikely because of the sheer size of the market cap.

Now here we are with the stock that's up the most in the S&P 500 and you have to think to yourself, "Why didn't I hold on, what was the point of running out on the stock?"

Tell me that hasn't been the way since the election, a snap-back based on a rotation or a whiff of a takeover or a possible turn, which seems to be the case, for example, with VF Corp. (VFC) , a stock that my colleague Matt Horween said the other day represented a pretty darned good risk-reward.

That's really the ultimate story of this tape: The risk-reward dictates a reason to hold on for better prices, not to sell. Hence the joy of owning what was so painful just 24 hours ago.

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