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Jim Cramer: Themes That Are Dying in 2014

Then there's biotech. Here's a group that had been dominated by Amgen (AMGN), Celgene (CELG), Biogen Idec (BIIB), Gilead (GILD) and Regeneron (REGN). You can throw in names like BioMarin (BMRN) or Vertex (VRTX)  or Pharmacyclics (PCYC). This was the most important leadership group in the market. It was brought on by, one, a number of big drug approvals and, two, some super-mergers that seemed to be happening pretty much once a month.

While the approvals are still occurring, the biggest one -- that of Gilead's hepatitis C pill -- so far seems below forecast, and that's crimping the whole group. Given the size of the patient population, and the life-saving nature of the pill, I do not know why sales haven't been better. Each week they seem to get worse, which is, I believe the proximate cause for the whole group's decline, as they are all linked via powerful ETFs. As they've gone down, no safety net of mergers and acquisitions has appeared to save the group.

At the same time, the sheer number of new biotech stocks has been overwhelming. Plus, many left-for-dead biotechs, which had been the equivalent of penny stocks, have had new life breathed into them. I wish I could say it was justified. But it's usually just another sign of rank speculation. Let's not forget that the group always, always, always underperforms when a pronounced economic growth spurt is in the air, and that's just what people think we are having now.

So aerospace, cloud and biotech all have issues that cannot be solved quickly. The first might turn when we get earnings reports. The second and third, though, can only stop declining if the IPO window closes and the economy falters -- and, in the case of biotech, we'd need to see a pick-up in Gilead's new drug sales and a new wave of M&A to take advantage of the decline in prices.

Must Read: Supply Can Kill the Bull, The IPO Window Lets In a Chill: Jim Cramer's Best Blogs

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long CELG.

Editor's Note: This article was originally published at 6:45 a.m. EST on Real Money on March 31.

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