Abandon the Rumor Mill

Two days ago I got the so-called "call of a lifetime." It seemed that foundry work for some of the specialized players -- Xilinx (XLNX - commentary - Trade Now), Altera (ALTR - commentary - Trade Now), Qualcomm (QCOM - commentary - Trade Now) and, by implication, Broadcom (BRCM - commentary - Trade Now) and Marvell (MRVL - commentary - Trade Now) -- had ground to a halt.

I didn't believe it so I didn't pass it on. I had just had the Xilinx CEO on my show and he made it very clear that orders were strong. I had been recommending Broadcom, Marvell and Qualcomm because of the mobile internet tsunami and had not heard any contradictory evidence.

I dismissed it and I didn't give it credence here.

But it looks like others paid it more mind. When I look at my screen today, I can see that every single player that I had heard was about to stumble took off today in what turned out to be a remarkable short squeeze that obviously included all of the ETFs and SOX-like indices.

When you get a rumor that flies in the face of your own judgment, you have to think twice before endorsing it. We are in the seasonably strongest period for the semis, which went up today, and many of us have heard evidence in direct conflict with the rumors, which is why I said here I was not endorsing them, and there's a secular trend so strong -- the mobile internet -- that cyclical forces can't pull it down.

No matter. The bears just won't be denied their pound of flesh. They will put on any rumor, slap shorts on any whisper and do anything they can to make the case, regardless of the facts.

Pathetic.

Today we saw when the handiwork backfires.

My advice: Stop listening to rumors. Understand secular trends. The moves in the stocks I mentioned have to do with a longer-term trend that is in its first inning -- smartphones.

To go against it is to go against the personal computer in 1988 and to go against the Internet in 1996.

It's just too wrong and, as we saw today, way too costly.

At the time of publication, Cramer was long Qualcomm.

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