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April 8, 9: Guest Charles Carlson

TSC Staff

Participants on April 8 included host Brenda Buttner, James Cramer, Herb Greenberg, Gary B. Smith and guest Charles Carlson. The transcript is unedited, and phonetic spellings are indicated with (ph).

BRENDA BUTTNER, HOST: Up next, information you need to make your own decisions in the market. And what a tough one it's been. Did you get whiplash watching stocks last week? A scary free fall, then sudden recovery. But what happens now? Get the Word on TheStreet.

And get ready. Jim Cramer is in high gear for another round of Ask Cramer. Jim gives you the lowdown on stocks you're asking about. And you can bet he won't hold anything back.

All that, plus Predictions you can't afford to miss. But first, headlines with Fox News "Live."

BUTTNER: Hi, everyone. I'm Brenda Buttner. And you're connected to "TheStreet.com." We're here to help level the playing field on Wall Street.

Well, what can I say but, what a week! Were you nervous? Don't blame you. Two very scary days. And still, even after a lot of plus signs, a lot of uncertainty. What happens now? Here's the Word on TheStreet.

With us from TheStreet.com financial Web site, Jim Cramer, who also runs the Cramer Berkowitz hedge fund; Senior Columnist Herb Greenberg; in Washington, contributor and our "Chartman," Gary B. Smith; plus, also in New York, Chuck Carlson. He runs the Strong Dow 30 Value fund, which invests in the 30 stocks of the Dow Industrials.

OK, first topic: this extraordinary market. Last Tuesday, the Nasdaq plummeted almost 600 points at its lows. The Dow way down, too, plunging about 500 points.

Now, both came back that day. And for the week, the Dow was actually up and the Nasdaq was down, but not dramatically. Jim Cramer, anything can happen after what we've seen this last week. But what do you think? Was that just a head fake, that recovery, or is it the beginning of something big?

JIM CRAMER, THESTREET.COM: You know, a lot of people talk about how there has to be a retest of the lows. That's just a bunch of nonsense. You know, I've always heard that all my career.

Well, now we have an important retest. That's authentic Wall Street gibberish. I think that there's a lot of stocks that got shaken out and are not going to come back.

But many more now look attractive. We've got a great low yield on interest rates. We've got a Fed that I think is less worried because a lot of the dot-com madness has come out. I see more groups to like than I ever have. This was a very solid week for the bulls.

HERB GREENBERG, SENIOR COLUMNIST: Jim ...

CRAMER: I know that seems strange. But it was.

GREENBERG: ... Head fake time, Jim. Head fake time. And people are sitting here, in all seriousness, this is a period when a lot of people suddenly realize it's safe when the market falls like this. And they can go ahead and -- so they lost money on margin ...

BUTTNER: But it has been for so long, Herb. You buy on the dips.

CHARLES CARLSON, STRONG DOW 30 VALUE FUND: That's right. It's been happening the last 10 years, basically. That's happened.

GREENBERG: And this one is the greatest head fake of all because this is what it looked like -- the world, the sky was falling.

CRAMER: Oh, I'm sorry for all the money I made from Tuesday to Friday.

BUTTNER: OK, well, what about the notion, though, of buying on these dips? Let's take a look at this Fox News Opinion Dynamics poll. The majority of us think it's a good time to buy when the stock market heads south.

And this week proved them right. If you bought GE, Cisco Systems, Intel, or really anything blue-chip Tuesday during the low point of the selloff, you'd have a nice profit by week's end. That's what Jim's talking about.

Of course, you have to have some cash to do so. And Gary, cash is a four-letter word for many in this market who maxed out with 100% of their money in stocks. Some are even borrowing to invest. In this market, how important is it to have a little cash to be able to put in there on these dips?

GARY B. SMITH, CONTRIBUTOR AND "CHARTMAN": Well, in hindsight, it's very important ...

BUTTNER: Well, actually, Jim told us about this two weeks ago.

SMITH: ... I mean ...

CRAMER: For months I came here, I said, listen, I'm talking it off the table ...

SMITH: Hey ...

CRAMER: ... I put it in Vanguard (http://www.vanguard.com) municipal bonds, for Christ's sakes.

SMITH: ... Yeah, I mean, Jim Cramer is my market timer. He called the top. He called the bottom ...

(LAUGHTER)

SMITH: ... I want a high line into his office ...

CRAMER: You can have it. It's called TheStreet.com.

BUTTNER: But Gary, should you be fully invested all the time?

SMITH: Well, here's what I -- I mean, I think your question -- yes, for a trader, you should always have some cash at the bottom ...

BUTTNER: But for an investor.

SMITH: ... No, no, hold on. If you're a trader, you should always have some cash at the bottom. And I would contend if you're a good trader, you should have some cash at the bottom because you wouldn't be fully invested because you would see stocks going down.

Now, if you're an investor, though, and the long term is your horizon, then by definition saying "I have cash at the bottom," you're timing the market. Stay fully invested. This blip, as it's turned out, was nothing.

GREENBERG: So you're saying if you're an investor now, you've got your 401(k) plan, but you still see this market coming excesses. And we've talked about this in the past.

SMITH: You know what, Herb, in this case I wish I agreed with you. Maybe even now I'm a little bit bearish. I'd say buy every dip, for crying out loud. It always seems to work.

CARLSON: Which market are we really talking about here? You know ...

BUTTNER: Well, you're talking about the Dow ...

CARLSON: ... the Nasdaq or the Dow? And I think there's something important to be made here.

CRAMER: Good point.

CARLSON: You know, the Dow this week was up 2%. The Nasdaq was down 3%. I think we've seen over the last three or four weeks not huge, but gradually there is money moving over to the more value-oriented areas. And you're saying you're seeing sectors like that.

CRAMER: Yes.

BUTTNER: Well, it did for a while. Now Gary, will the Dow have its day? Take a look at the chart and tell us what it says.

SMITH: Well, you know, I think the Dow right now is in a very tenuous position, to be honest with you. I think if it moves up, into say like 11,300, 11,500, then we're going to see some all-time highs. If it moves down out of this congestion, then I think we're going to go back to some lows. Unlike the Nasdaq -- there are two markets. You've got the Dow, which doesn't know which way to go ...

CRAMER: Oh, that's a "buy high, sell low" philosophy that was just articulated. I'm not going for that. It's not right.

BUTTNER: Well, you have long said that the Dow doesn't matter. Do you now think there's actually stocks in there?

SMITH: But wait a second, wait a second, did you just say you don't buy the "buy high, sell low" philosophy?

CRAMER: No, I don't.

SMITH: You buy high all the time.

BUTTNER: No, but he likes to sell higher.

CRAMER: Well, I'd like to be able to ...

SMITH: Oh, sell higher, sure.

CRAMER: ... catch that move to 12,000. If I think there's a move to 12,000, I'd like to catch it before it happens.

SMITH: But I'm saying -- but all I'm saying is I don't know if there's going to be a move until that congestion is broken.

BUTTNER: Tell us about the Dow, Jim. Is there anything in there?

CRAMER: I see many stocks in the Dow that I like. ...

BUTTNER: You do now? You've long ...

CRAMER: ... I've seen many stocks in the Dow. You know, we have a position in AT&T. We think it's terrific. I think the market has pulled back to a level where I really like it and is very inexpensive. I think General Electric is an unbelievable buy.

GREENBERG: Wait a minute, you told me you liked International Paper, too, now ...

CRAMER: I'm long on International Paper. You got a problem with that?

GREENBERG: Yes, here's the problem I have.

BUTTNER: One of those boring basic stocks.

GREENBERG: Boring, basic -- these are the very companies that a month or two or three ago you were on this show saying you would never own these stocks because when are you going to get pops out of them?

CRAMER: You cut me to the quick.

BUTTNER: A man has a right to change his mind.

CRAMER: I like a good stock. International Paper fell 20 points.

GREENBERG: The fact of the matter is, some of these value stocks do work. And you just have to be patient.

CRAMER: They got to cheap enough that I wanted to be in them.

GREENBERG: But people who were in them and were in them for the long term did not lose the way they were portrayed. They were not the losers everyone made them out to be. They weren't creating the big gains overnight.

BUTTNER: All right. ...

CRAMER: The people ...

BUTTNER: ... All right, guys, hold on. We have to take a break. But that's not the final Word on TheStreet. When we return, you want to put some money to work in this yo-yo market. Where should it go? What are the stocks and sectors to own? You might be surprised by what these guys have to say, right after this.

BUTTNER: No question, this is a tough market to call. So what do you buy? Chuck, you're restricted to Dow stocks. But what do you like there?

CARLSON: One stock our fund has been buying is Microsoft. It's 32 points off its high. You know, we're like everybody else. We're not exactly sure how this whole thing is going to come out. But I think worst-case scenario on a stock like Microsoft is dead money. I think at 88, 90, that's a stock that there's good value there. And I think you'll see people coming back into those large-cap tech stocks last week, including Microsoft.

BUTTNER: Isn't there so much uncertainty, though, surrounding this stock?

CARLSON: Well, there is. But I think that's why the stock is at 88 and not back at 120.

BUTTNER: OK, Gary, the chart isn't so bullish, is it?

SMITH: Well, no, I think that the key phrase there was dead money. Maybe it depends on Chuck's time horizon. I wouldn't touch the thing. If you look at the chart, a long-term uptrend has been decisively broken. I think it tried to break up through that today, but it failed. I wouldn't touch Microsoft. Maybe it moved sideways. But I think there's a lot better places for your money.

GREENBERG: Gary, you're talking like a trader here because you're not talking about somebody who is going to hold the stock for the longer term, which I think is what Chuck was really talking about.

SMITH: Well, yeah, yeah ...

(CROSSTALK)

CARLSON: Yeah, we generally will -- you know, we're looking for value over say, the next six to 12 months. It may be dead money for three months.

BUTTNER: Oh, that's a long time, six to 12 months, for ...

(CROSSTALK)

SMITH: I think it's dead money for six months, though.

BUTTNER: OK ...

SMITH: That would be my contention.

BUTTNER: ... Jim, you have said there are lots of sectors that look good.

CRAMER: Yeah, you know, I found myself buying some bank stocks this week. I found myself buying some drug stocks. I have a big position in Bank of America, big position in Mellon Bank, big position in American Home, which came down on some uncertainties involving an estrogen drug.

In every single case, I can tell you that these companies are companies that I think would report really great quarters. And that's what we are. We're in earnings season. So I'm really focused on that. I, too, own Microsoft. I own Intel. You were saved by the changes in the Dow. I like your fund, man ...

(LAUGHTER)

CARLSON: We were saved by the changes in the Dow.

CRAMER: And I see a lot to like. You know, I'm pretty bullish.

GREENBERG: You liked these financials for quite a while.

CRAMER: Yes.

GREENBERG: Did you get rid of them when they were starting to go down, before they started to go down? And are you buying more of it down here? Or ...

CRAMER: I wish I could tell you I was that good in the case of Bank of America. But in the others, yes. I was able to -- you know, I sold Citi after it had a very big run. I still own Goldman Sachs, which I think is a very high-quality financial.

But the financials, we had a very big change in the u-curve. I also think we're going to see a slowdown in spending just enough to make it so the Fed will stop tightening. And the financials are a great place to be when that happens.

CARLSON: Yeah, we like Citi in our fund right now, too.

CRAMER: It's cheap.

BUTTNER: Gary, what's your favorite? It's not among these more basic stocks.

SMITH: No, this is going to make Jim pull his hair out because ...

CRAMER: That's a tough position for me.

SMITH: ... he likes stocks that are low and for a bargain. I can understand that. That's just not my philosophy.

I prefer to buy a stock that is strong, has stayed strong, is near its all-time highs. The stock I like is APH [Amphenol Corp.].

I wish we had done this show a little bit earlier in the week. That would have been fantastic. APH has made a big move.

I still love it right here. You want a stock I think that, despite all the turmoil, has just stayed steady as a rock, APH is a great example.

CRAMER: Good call. Look, the connectors are great. I'm long Tyco International, controversial stock ...

SMITH: I have no idea what they do.

BUTTNER: Well, that doesn't matter ...

(CROSSTALK)

CRAMER: You buy them high and you sell them low. It's a winning proposition.

BUTTNER: Herb, you made a great call on biotech at the beginning of this year. You could make a lot of money off of that. Are you still as bullish on that sector?

GREENBERG: My sources are varied. But people who like biotech or are looking for ways to get into it, I will tell you one thing that people do like that has nothing to do with this. They like the Barnes & Nobles and some of the record and book retailers which everybody thought would be put out of the business by the Internet companies, Jim.

(CROSSTALK)

BUTTNER: Oh, come on. You're buying IP now.

GREENBERG: These are real companies...

BUTTNER: You're a value guy now, Jim.

CRAMER: I'm whatever it takes.

(LAUGHTER)

GREENBERG: These were real companies, and they did not go out of business. They did not go out of business the way they were supposed to have gone ...

CRAMER: They didn't?

GREENBERG: ... No, they didn't. Their sales are rising ...

(CROSSTALK)

CRAMER: ... out of business. I know exactly.

BUTTNER: All right, Chuck Carlson from the Dow Strong 30 fund, thanks so much for being here.

Jim, don't go away ...

CRAMER: I'm not going anywhere.

BUTTNER: ... The phone bank is on fire with viewers fighting to ask you about their favorite stocks. How many can you handle this week? Come on, give me a number.

CRAMER: I'd like to handle 30 if I can.

BUTTNER: Oh, my God. Quality and quantity ...

CRAMER: Yeah. Yeah.

BUTTNER: ... here at "TheStreet.com." Ask Cramer is next. Don't go away.

BUTTNER: Welcome back.

You've got questions about a stock. Well, who better to ask than Jim Cramer?

Cramer is ready and waiting. So let's go straight to the phone. Start scribbling, too, because we're going to whip through these.

OK, Jason in Minnesota.

CALLER: Hi, Jim. Will you buy Applied Materials at current price, or at 115 after today's breakout?

BUTTNER: I know you like Intel. Do you like ...

CRAMER: Since I bought it on Friday, how can I tell this guy I don't like it? I love Applied Materials. I wish I owned more.

BUTTNER: And there's room for Intel and Applied?

CRAMER: Jesus, you're talking about as good as it gets.

BUTTNER: OK, all right, Wade in Georgia.

CALLER: Hello, Jim, 724 Solutions?

CRAMER: I'm sticking with it. You know, I know it's had one of the toughest runs. But you've got to be in a high-quality, high-growth stock like that.

It's a young stock. It's unseasoned. Hold on.

BUTTNER: All right, Dory in Ohio, get ready. Hello, Dory, what's your stock?

CALLER: Yes, Tibco, please.

CRAMER: Tibco?

CALLER: Yes.

CRAMER: Another highly unseasoned, multibillion-dollar stock that's come down 30 points from where they did the secondary. I think it's fine.

BUTTNER: All right, we're on a roll. David in Alabama.

CALLER: Jim, talking to you is like winning the lottery. You've made me so much money. What do you think about PE Biosystems? PE Biosystems?

CRAMER: Man, you like the high rollers. That's good. I'll tell you what, that one is the highest risk, highest reward in this market right now. A little scary.

BUTTNER: Mike in Florida.

CALLER: Hey, Jim, your opinion on semiconductor stock Anadigics, please.

CRAMER: One of my -- I love the semiconductor stocks. I think they're all good. This is one of my lesser favorites, though.

BUTTNER: Lesser favorites.

CRAMER: Yes. Of the semi group -- there's at least a dozen semiconductors I like more than that.

BUTTNER: Right, OK. Eric in Illinois.

CALLER: Jim, love your articles on TheStreet.

CRAMER: Thank you.

CALLER: Your short-long on Emisphere Technologies.

CRAMER: Why do you want to be in that? Come on, you know there's better quality specs than that. Next.

BUTTNER: Patrick wants to know about Nokia.

CRAMER: Oh, man. That's a river in Finland. No, I'm always ...

BUTTNER: Yes, it is. And you ...

CRAMER: ... long Nokia. Nokia is one of my favorites.

BUTTNER: ... It's near its highs though.

CRAMER: You know, at 189 on the site this week, I said, "Listen, I'm going down and plunging in the river Nokia ..."

BUTTNER: Right.

CRAMER: ... "I'm buying as much as I can." It finished the week at 220 and change. This stock is going higher.

BUTTNER: All right, and Keith wants to know about Cobalt Networks.

CRAMER: No, see again, that's too dicey.

BUTTNER: Well, it's down, what, 50% year-to-date I think. Too low?

CRAMER: I don't think that's wrong ...

BUTTNER: You think it's going to keep going. Right, OK.

CRAMER: ... No, I just don't think that's where the action is. You know, I haven't liked Cobalt Networks right from when it came.

BUTTNER: Right. OK, Dave wants to know about Amgen.

CRAMER: Amgen I think is good. I think that group -- I happen to be a believer in biotech. I think Amgen is less speculative than others. There's a big court suit going on. I think they win it and you stick with Amgen.

BUTTNER: OK, back to the phones. Corey in Georgia.

CALLER: Hey, Jim. What do you think about Qualcomm? Still long it?

CRAMER: Yes, I am still long Qualcomm. I've made two mistakes this year. I sold Qualcomm twice. I bought it back twice. I think it's an explosive quarter, a lot of good deals coming.

BUTTNER: Spencer in Wisconsin, what's your question?

CALLER: Hi, Jim, thanks for your advice last week. There's bulls, there's bears. But pigs get slaughtered.

CRAMER: Well, you know, that's my wife's advice. But thank you.

CALLER: 24/7 Media.

CRAMER: You know what, I like 24/7. I think that this sector has gotten unfairly tarnished. And I believe that this, if you look at Yahoo!'s quarter, Yahoo! I'm long too, you'll see that growth is explosive in that industry, in the advertising industry on the Net. And I like it.

BUTTNER: All right, Phil in Ohio.

CALLER: Hi, Jim. Thanks for TheStreet.com. Love the site. My question is VerticalNet.

CRAMER: You know, this is a controversial stock now. And I think it's almost played out because VerticalNet had this feel to itself that, you know, this is a business-to-business.

And now all the companies that use business-to-business are forming their own exchanges. They could cut out VerticalNet. It's the best of that lot. But I am afraid of VerticalNet right here.

BUTTNER: All right, Dennis in Indiana.

CALLER: Hi, Jim. Network Appliance?

CRAMER: Oh, well, you know, Matt "Network Appliance" Jacobs in my shop is always trying to get me to buy this stock. And I would have made a fortune with it. I don't know now whether it's still right though.

BUTTNER: Gail in South Carolina.

CALLER: Hi, Jim. What do you think of National Semiconductor?

CRAMER: My fourteenth favorite semiconductor.

(LAUGHTER)

CRAMER: But it's still good. They're having a fantastic quarter. But, you know, when I look at the universe, I see Intel. I see Cypress, I see so many -- Texas Instruments. I see so many companies that are more wired to the wireless world. I'd rather be in those than I would be Nat Semi. But Nat Semi is a good company.

BUTTNER: OK. And Paul writes via email, he wants to know about Retek.

CRAMER: Retek, very dicey. You know, I think that I should just say this because I know the guys there. But, you know, that's the most speculative of B2B. The most speculative.

BUTTNER: OK, Robert wants to know about AOL.

CRAMER: Well, you know, I'm long AOL ...

BUTTNER: I know. And you have been for a long time.

CRAMER: ... I think AOL -- yeah, I even bought it during the dip. I suffered. I happened to -- created the top at AOL. The day it bought Time Warner, I bought stock at 80, shared it with the site immediately revealing myself as a complete idiot.

But rode it all the way down and rode it back up. I'm still very long on America Online. And I think it's a great combination with Time Warner. I say this is the real deal.

BUTTNER: OK, Bruce wants to know about Oracle.

CRAMER: Long Oracle too. I think Oracle is the winner. When we look at the business-to-business world, it turns out that Oracle, I think, is going to end up owning that world. I think Oracle is having a very strong quarter. Periodically, the bears raid this stock. They come up with some negative story ...

BUTTNER: Well, like on Tuesday. It was way down.

CRAMER: ... Oh, they were out there saying in full force that Oracle was going to blow. It wasn't. It was a good buy. I'm long it.

BUTTNER: All right, Jim, thanks. I think we got close to 30.

CRAMER: Terrific.

BUTTNER: All right, up next, the weekend did strong on Wall Street. But are rough waters waiting for you Monday morning? Predictions are next.

BUTTNER: Welcome back.

So, can things get any wilder on Wall Street? Let's find out. It's time for Predictions.

Rejoining us from TheStreet.com, Jim Cramer, Herb Greenberg and in Washington, Gary B. Smith.

All right, let's get right down to it. Jim, your Prediction.

CRAMER: Right now the hottest two areas in the whole market are wireless and semiconductors. The intersection of those, the semiconductors that go into handsets, those semiconductors that go into Nokia, Motorola, that is really where the explosive growth is coming. That's what you want to be in for the next three weeks ahead of the earnings, semiconductor stocks, particularly the highest growth semiconductor stocks.

BUTTNER: Just for the next three weeks?

CRAMER: Well, that's -- we're in reporting period.

BUTTNER: Right.

CRAMER: I'm saying they're going to have the best -- if you go in reporting period and look at it as an opportunity -- a trading opportunity, these are the stocks that are going to prevail.

BUTTNER: OK, Herb, what do you think?

GREENBERG: The Nasdaq next week will touch 4100. You know me, the market timer ...

(LAUGHTER)

GREENBERG: ... 4100, that's right. (CROSSTALK)

GREENBERG: ... No, this is going to be a very volatile ...

SMITH: Is that ...

GREENBERG: ... what? This is going to ...

SMITH: ... is that before it hits 5000 or after it hits 5000?

GREENBERG: Oh, you're going to get back at me for that one.

(LAUGHTER)

GREENBERG: Hey, I said it was going to hit 4400. It did hit 4400 ...

SMITH: It did.

GREENBERG: ... just not ...

CRAMER: You had a good call.

GREENBERG: Now I'm saying 4100.

BUTTNER: OK, Gary B., what do you think?

SMITH: Well, Herb earlier said biotech was the place to be. I'm on the other side of the fence ...

GREENBERG: Of course.

SMITH: ... I think biotech's had its move. I think it's done. A good example today, the Nasdaq up 178 -- or Friday, rather, Nasdaq up 178. BBH (ph), the proxy for the biotech, did nothing. In fact, it went down.

CRAMER: How did it do Wednesday and Thursday, Gary?

SMITH: Well, wait ...

CRAMER: How did it do Wednesday and Thursday?

SMITH: ... It did great. But now the move is over.

CRAMER: That was a head-slam short ...

SMITH: The move is over.

CRAMER: ... That was a head slam short against the guys who were leaning against that index.

SMITH: Well, I, look ...

GREENBERG: Gary, you're talking short term here. This is a short-long term. And it's -- many of the right biotech companies long term are going to do very, very well.

SMITH: Well, give me an example of the right biotech company, though.

GREENBERG: The right biotech company?

SMITH: Yeah, I want ...

GREENBERG: Gary ...

SMITH: ... Herb's Biotech Company.

GREENBERG: ... Gary, I don't make projections.

CRAMER: Vertex Pharmaceuticals, Amgen, Millennium ...

BUTTNER: OK, you heard it here first.

(CROSSTALK)

BUTTNER: But you at home have the final say. Just log on to TheStreet.com Web site and go to our TV page to rate these predictions. You can send us a question or a comment as well.

And while you're there, check out TheStreet's market commentary and analysis, all there to give you an edge on Wall Street.

Thanks for joining us. We'll see you here again next week. And until then, we hope you invest wisely.

END

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