I stumbled on to a cult of true believers these last few days, not unlike the cult behind Dendreon (DNDN), the last hornet's nest I tried to navigate, and I think that the consequences will be similar for both the hornets and me.
I'm talking Arena Pharmaceuticals (ARNA), the company that has the first new diet pill approval in more than a decade.
Arena was the best-performing stock in the first half of the year, and I had posed the question to viewers of "Mad Money" whether it could continue such prowess or were other strong stocks from the first half, including Onyx Pharma (ONXX), US Air (LCC), Mellanox Technologies (MLNX) and Pharmacyclics (PCYC), going to do better.
Viewers voted overwhelmingly for Arena, clearly believing that we are in the early innings of the story even as it is up more than 500% for the year.
Put aside the fact that the anti-obesity drug may not cause you to lose more than 5% of your weight, or that it may not be paid by insurance, or that you can only take it for a certain time period rather than a lifetime like, say, Lipitor, and you have to admit that a 500% gain is worth preserving. Layer on that a rival drug, arguably as good if not better, from a now well-capitalized firm, VIVUS (VVUS), might be approved as soon as next week, and you might have an even better reason to be worried about losing that gain.
But when I stated these risks and suggested that you sell half or take out your invested capital and play with the house's money, Twitter @JimCramer lit up instantly. I got the usual charges against me, that I am a tool for so and so, or that I was secretly short.
I can handle that.
It's been said before.
Pack of lies, of course.
But what bothered me is -- like when I suggested a few years back that Dendreon might not live up to the hype with Provenge -- the true believers blew their stacks.
Look, it is great that Arena got as far as it did. I hope it goes further. But I don't care if it has a cure for the common cold, if a stock is up 500% in a straight line, you take something off the table. There is nothing sinister about that.
It is called common sense.
When I started this site, I very quickly realized that you had to have a thick skin when you are attacked. I used to do a lot more provoking 16 years ago than I do now. Call it callow youth.
But when I am criticized for being critical of a stock that's rallied huge, I am not going to praise/hype it simply because the viewers have spoken.
Here's something the viewers and readers should listen to and it's one of the first rules I ever learned in this business: Nobody ever got hurt taking a profit.
If you can't handle that wisdom, if you think that's an attack, if you think that view is motivated by short-sellers, then you don't belong in the game and you certainly shouldn't be wasting your time reading or watching me.
P.S.: As I was writing this column, BofA/Merrill downgraded Dendreon to Underperform from Neutral.