Quarters Like Goldman's Don't Happen at Bottoms

Goldman Sachs (GS - commentary - Cramer's Take) reported earnings of $3.2 billion last quarter. Let me write that number out to appreciate the size of it: $3,200,000,000. That's about $35 million for every day the market was open.

For more perspective, realize that Google (GOOG - commentary - Cramer's Take) earned $3.1 billion for all of last year. Goldman surpassed that in only the past three months. Wow.

And that amazing Goldman quarter underscores my closing post yesterday: We might be seeing a real estate bubble pop and turn into a real estate crash, but more bubbles grow along the way. The world's premiere investment bank/hedge fund just reported a record quarter in which earnings came in more than 30% above consensus estimates. Let's be clear about one thing: Quarters like this don't happen at bottoms.

As we approach year five since the great Teleconomic and Techonomic Depression ended, we shouldn't be levered up and long, hoping that the boom continues. We need to respect that the economy does cycle and that there will be great buying opportunities again. And we can scale into some select cyclical plays in tech that appear to be ready to kick in (such as Seagate (STX - commentary - Cramer's Take)) and some secular plays in tech (such as Sirf Technology (SIRF - commentary - Cramer's Take)).

That's my plan and I'm still sticking to it.

At the time of publication, the firm in which Willard is a partner was net long Google, Seagate and Sirf, although positions can change at any time and without notice.

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Cody Willard is the manager of CL Willard Capital Management, LLC. He is a regular guest on Fox News, CNBC and other networks, and he writes a monthly column for the Financial Times. He is also an adjunct professor at Seton Hall University and the author of TheCodyReport.net, a monthly stock market newsletter. Willard appreciates your feedback -- click here to send him an email.