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Tech is the real deal. Stop believing tech is a sham. Forget about the past and get long tech. That's what Jim Cramer told his viewers on his "Mad Money" show Thursday night.
Viewers of the show on CNBC were told to stop thinking short term and become an owner of technology. Quit selling every up move in technology, Cramer said. We are not living in 1999; tech today is moving up on real numbers, not hot air, Cramer continued.Consider Google (GOOG). Lehman Brothers raised its price target on the stock to $350, from $275, and lifted its earnings estimate to $7.53 for 2006, up from an earlier forecast of $7.18 a share. If you assign Google a 60 multiple, which is where Yahoo! (YHOO - Get Report) trades, the stock would trade at $450 a share. But price targets don't matter as much with Google, said Cramer. It's the profit. If Google earns $7.53 a share in 2006, the stock is cheap. In sum, Cramer said that tech is not a pipe dream made of hype. It's the real deal. Big-cap technology is cheap here and you should buy it, said Cramer. Investors should also be looking at the bargains in oil and real estate, especially after Thursday's glorious sale, Cramer said. To play the oil stocks and real estate, Cramer said that he would buy Valero (VLO - Get Report) for oil and Vornado Realty Trust (VNO - Get Report) for real estate. Cramer believes that it is going to be a race to $100 with these two stocks. Which one will get to $100 first? Valero trades at around $81 and Vornado trades at about $83, but Cramer believes Valero will cross the $100 line first. But no worries, Cramer said. They're both going to $100, even if Valero gets there first.