'RealMoney' Radio Recap: That's Entertainment
There's a lesson to be learned from the late 1970s, Jim Cramer told his "RealMoney" radio show listeners, and that's the lesson of the computer cycle.
In 1979, a program was developed to enable data to be put into a spreadsheet, and businesses saw that buying a computer with the spreadsheet program would make life much more efficient, Cramer said. As computers developed and innovations were introduced, they soon hit the consumer market and everyone needed a PC.
But that market cycle has run its course, he said. Now, we're in the early stages of an entertainment-driven technology cycle.
Best Buy (BBY), long a popular "best-of-breed" big-box retailer, attributed its fourth-quarter double-digit profit growth to audio-visual equipment sales, including big-screen televisions and MP3 players.People want to be entertained and that is where the growth will be, Cramer said. New products drive a cycle, and while there's nothing new on the PC horizon, there's a lot new in entertainment, he said. New games coming out for Microsoft's (MSFT) Xbox 360 feature some of the most convincing graphics Cramer has ever seen, and he believes there will be more demand for lifelike games. He doesn't care about the software, focusing instead on the hardware inside that makes the games exciting. In this space, he likes Nvidia (NVDA) and ATI Technologies (ATYT). These stocks have been hot, so he would only buy them after they came down a bit. And he wouldn't put his whole position on at once, he added, since there's a big multiyear cycle ahead of us. He also likes cell phones because they continue to roll out with products and features that cater to consumers who want entertainment, including the ability to send short videos and better ring tones. Nokia (NOK) and Motorola (MOT) are cheap stocks that Cramer likes. He also mentioned Skyworks Solutions (SWKS) because it makes chips in these cell phones, as well as Qualcomm (QCOM), which he owns for his ActionAlerts PLUS charitable trust portfolio.
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