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Minds Too Narrow, Not the Market

Jim Cramer

Editor's note: This is a bonus story from James Cramer, whose commentary usually appears only on RealMoney. We're offering it today to TheStreet.com readers. To read Jim's commentary every day, please click here for information about a free trial to RealMoney.

You hear it everywhere, in our columns, on television, in newspapers, in magazines: The market's too narrow. Not enough stuff is working. You can't have a great market with just a couple of sectors generating the enthusiasm.

I have heard it all before. It's code for: "I am in the wrong stocks and I am not going to learn those new stocks that are working so well." It's a mask for laziness or fear, because the simple truth is that by the time the groups that are moving get where they have to go, they are plenty big enough and need to be owned.

I am seeing fabulous activity in the industrials, the chemicals, the forest products and the minerals. I have talked and written endlessly about these oils. Since when do the steels not count? Oh, and what's the matter with going overseas a bit, or to Canada or Mexico, robust bull markets that have taken up pretty near everything?

And what happens if the brokers catch another leg up? I think a lot of the moaning about the market has to do with the seeming "lost" leadership of stocks like Goldman Sachs(GS Quote - Cramer on GS - Stock Picks) and Morgan Stanley(MWD Quote - Cramer on MWD - Stock Picks). That could change on a dime.

What truly has happened is a remarkable breakdown in any of the techs. The semiconductors are stalled out, despite good earnings from Texas Instruments(TXN Quote - Cramer on TXN - Stock Picks) and Intel(INTC Quote - Cramer on INTC - Stock Picks). The software sector seems to come alive with pleasure a couple of times a month and then just gets obliterated. Networking seems like something that's almost old-fashioned; the comparison of the builders of the now-completed Net infrastructure to the builders of the Interstate Highway System makes all the sense in the world to me.

In fact, there's Apple(AAPL Quote - Cramer on AAPL - Stock Picks).

And there's nothing else. Not even Yahoo!(YHOO Quote - Cramer on YHOO - Stock Picks), although I think that stock's just biding its time.

For those who have seen tech shrink from the only game in town to a game that gets rained out a lot to the virtual National Hockey League of this market, it's been very tough. Going to all of those conferences -- "Goldman tech, stop trading!," remember those days? -- seems like a horrid waste of time. Better just to tag along with Georgia Gulf's(GGC Quote - Cramer on GGC - Stock Picks) management on its New York foray. Or better just to buy the REITs on a dislocation; that worked.

This remarkable, shrinking tech sector has kept hedge fund managers off their game for almost a half-decade. Meanwhile, whole new companies have come -- and even gone, check out Helen of Troy(HELE Quote - Cramer on HELE - Stock Picks) today -- while people have waited for Cisco(CSCO Quote - Cramer on CSCO - Stock Picks) and Sun Micro(SUNW Quote - Cramer on SUNW - Stock Picks) to come back.

Major themes, such as the real estate shortage -- I like that more than "the bubble" -- the secularization of the oil stocks, the return of heavy industry courtesy of China, aging boomer health care and health care cost containment continue to shoot the lights out for the mutual funds with their big staffs and their need to find longs. (Hedges just switch long-short-long-short until the groups they play in have no volatility whatsoever.)

But those get ignored in favor of "Boy, it's narrow out there."

It's narrow only if you are waiting for the techs to come back.

I remember that brutal moment a decade ago when my wife came back to work and I was all about Cisco and Wellfleet and DSC Communications and she was still on U.S. Steel(X Quote - Cramer on X - Stock Picks) and Phelps Dodge(PD Quote - Cramer on PD - Stock Picks). She hated having to do the new work, hated it. It finally drove her away, if I didn't drive her away with my insistence that new groups had to be learned.

Her stocks lay dormant for years. Now they are back with a vengeance. Yet I am seeing many people be like Karen was, waiting, wondering what's come over this market that it left its staples for other pastures. What is this BHP(BHP Quote - Cramer on BHP - Stock Picks)? Who cares about Rio Tinto(RTP Quote - Cramer on RTP - Stock Picks)? What gives with this Arcelor?

The answer is performance. That's where it is. There is always a place where performance is. When it is not where you are, you can lament it, you can bang your head about how there's no new ideas and, ultimately, you can wait to have your money taken away.

Or you can do the work.

Karen didn't want to do the work. She had a kid at home, crying, wanting to be with her, not the nanny.

What's your excuse?