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Not the Time to Buy Tech

02/06/07 - 07:37 AM EST

Jim Cramer

This column was originally published on RealMoney on Feb. 5 at 11:23 a.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

You want an untold story? How about the underperformance of tech, despite the endless attempts of people to try to flog the story as a major part of the bull market of 2007? In fact, it would be better to be in the homebuilders or the cyclicals; these are the fantastic performers of 2007. Same with the oils. I would take the steels over the semis any day of the week.

Check out the SOX and the Semiconductor HOLDRSSMH, the tech bellwethers. They peaked at the beginning of the year and haven't come near taking out their highs. Why is that? I would emphasize that we are right at the seasonal change of heart for tech and you aren't going to get the outperformance you are looking for from this group.

If you don't believe this -- and you probably don't -- take a look at SeagateSTX and KomagKOMG. The latter reported a good number but didn't give good guidance. That was totally fatal and the stock has turned into a major-league bow-wow.

Seagate, on the other hand, put up gigantic numbers and guided up huge, yet till is down from where it reported -- actually down a lot as a percentage basis.

Microsoft'sMSFT not doing anything either, and is starting to head down now. Hewlett-Packard'sHPQ been stung by the DellDELL news of Michael's return and is struggling to get back to where it was.

Qualcomm'sQCOM gone from $39 to $37 and has failed to rally on good news. Same with EMCEMC. Same with GoogleGOOG.

Don't believe the hype. This is not the moment to buy tech, despite the hype.

Better to look elsewhere as the seasonal gravity once again takes its toll.

Random musings: One small exception to this downturn is MRV CommunicationsMRVC. That's a restructuring story, though. ... College students, listen up! RealMoney is offering you something special... a free subscription through May 31, 2007. The only requirement: You must have an email address that ends in .edu. Email collegetour@thestreet.com to accept my personal invitation to come read my blog every day, plus all the other writers on that great site. Pass it on!

At the time of publication, Cramer was long Hewlett-Packard.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. Click here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click here to order his book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

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