Chat Special: Cramer, Fleckenstein Share Their Views on Markets, Stocks

James J. Cramer and Bill Fleckenstein chatted Monday, March 19, on RealMoney.com.

jimcramer2: I want to give a warm welcome to Bill, who has helped everybody so much this past year.

RM_Will: Thanks Jim, great to be here.

manzari-guest says: What does the Trading Goddess think about the current market environment?

jimcramer2: My wife was adamant after reading all the negative articles in the papers that I was nuts to continue to pound people into selling, let it lift she said,. and I went with that.

fjjiii-guest310 says: Bill....how do you think the Fed will handle another derivative blow-up like Long-Term Capital?

RM_Will: I think the Fed will do as they have done and continue to raise the moral hazard; they are very dangerous in their approach.

jpfct_aol_com-guest says: Jim/Bill -- any plays on the California energy fiasco (long or short). Thanks -- congrats to Bill on the Grant's gig!

jimcramer2: I think the California crisis makes it easier for the Fed to cut rates -- gives the Fed cover. But it does not change the fundamentals in tech, which remain sour.

xswedc-guest says Fleck -- Still short Intel(INTC Quote - Cramer on INTC - Stock Picks)?

RM_Will: Yes, I am. I think all the chip stocks are still very inflated and will decline quite a bit still.

jimcramer2: I want to emphasize that last summer, when everyone was still betting that Intel was going to make its quarter, Fleck came to New York and predicted the shortfall that happened in September.

jimcramer2: It was an amazing call and we all owe him thanks! Gutsy!!

matt_d-guest says: Stocks are clearly in a bear market -- should people sit in cash like GBS says, and wait for better fundamentals and/or cheaper prices? If not, how much cash should a long-term investor commit?

RM_Will: I think that is the correct place to be until value returns and speculation is washed away. the fact that there is no real fear after all that has happened means that there is still a great deal of risk in the market place.

jimcramer2: I think that there are bargains but that cash is a great thing to have. A mixture of both is right.

RM_Will: Jim, will a rate cut matter?

jimcramer2: I think it if it part of a series that makes cash yield too little, then it will matter.

donkeith1-guest says: Jim, I noticed you took off the Krispy Kreme(KREM Quote - Cramer on KREM - Stock Picks) short in the Action Alert portfolio today. Do you ever intend to initiate shorts in that portfolio when you can't do that for your personal account?

jimcramer2: I think that's a great question. I will be forbidden from betting short here so I don't think it is such a good idea to recommend stuff I wouldn't or couldn't do.

bigmover-guest says: Fleck: When would you cover Broadcom(BRCM Quote - Cramer on BRCM - Stock Picks) if you were short?

RM_Will: I'm not short it but in general all chips are too expensive and their are mountains of inventory of most parts out there still with end demand weakening. It is the biggest area of risk. I would wait until that is clear to all before covering...

acrafton2-guest says: Why has IBM(IBM Quote - Cramer on IBM - Stock Picks) not been crushed like its competitors? If it warns, what is the downside?

RM_Will: I think IBM will be destroyed in the upcoming recession, the balance sheet is terrible. They have never warned before, if they do it could really get hit hard. Full disclosure: It is one of my biggest shorts.

jimcramer2:Ouch. I think IBM is doing OK and that its multiple is lower than the rest of tech. I don't think it would be hammered that badly if it warns and I don't think it will. This is one of a handful of tech stocks that I don't regard as dangerous.

jimcramer2:Can't agree on everything!

bmusler-guest says: Bill or Jim: Thoughts on GE(GE Quote - Cramer on GE - Stock Picks)?

jimcramer2:General Electric is not a cheap stock, but I think it will rally into the next eases. It sure would be doing better if it had not had that outstanding tender offer for Honeywell(HON Quote - Cramer on HON - Stock Picks) on the table.

theabyss-guest says: Bill and Jim -- Why don't these tech companies become "shareholder friendly" -- an oxymoron -- and begin canceling all of these outstanding stock options in an effort to reduce their float and increase future EPS growth?

RM_Will: They can't -- that's how they paid their people. If they had to use cash, the earnings would take a huge hit. That's why the CEOs all became cheerleaders.

rrjim-guest says: Will Philip Morris(MO Quote - Cramer on MO - Stock Picks) still go on up to $60? Been sort of backsliding lately.

jimcramer2: It has had an unbelievable move but I think it works its way higher. It is still one of the cheapest stocks in the Dow.

foxy_brian-guest says: Jim, you have recently mentioned trading opportunities versus long-term investments. Is there a specific percentage you would be satisfied with? The same question applies to the short side with Bill.

jimcramer2: It depends, I would think on the market. I think that we are too hung up on long- and short-term and not hung up enough on loss avoidance. I think that people who put money in these mutual funds that are always long tech aren't doing the right thing long- or short-term.

RM_Will: I never do anything for a trade; I only trade around my investment-grade shorts because the volatility MAKES me. I wish the market was only open once a month.

ac6752-guest says: JJC or WF -- what's the word on Rambus(RMBS Quote - Cramer on RMBS - Stock Picks)? I went long Friday 3:55 p.m. -- banzai -- and cashed into today's short squeeze!

RM_Will: I think RMBS is a total joke, having said that it is an impossible stock to be involved in I have no position but have been short in the past.

bleavittii-guest says: Jim, the media stocks have been taken out and shot here. Are they a buy if the Fed rate cuts stimulate the economy?

jimcramer2: Yes. I think they are. They are selling at very low multiples to cash flow and could have a better second half than anybody thinks, but the near-term is just awful.

caban99-guest says: Jim, Bill: Do you agree with Bill Meehan that S&P is more vulnerable to the downside than NDX now?

jimcramer2: I am not a bear on the S&P and I think the NDX rallies before it goes down again.

RM_Will: All the indices are vulnerable, they are all too high. There is only one market, not three. I think they will all go down right after the rate cut.

hhlau-guest says: Fleck: Did you see the Solectron (SLR Quote - Cramer on SLR - Stock Picks) blowup thru the wires now? Guide Q3 rev down by a full billion. Are there any tech sectors you like?

RM_Will: No, none I like, I think folks are still in denial about how bad things are and prices are still too high, many chip stock sell at 5 to 10 times revs. The economy is sinking, tech is very expensive. I would stay away.

kentc5000-guest says: JJC, what makes the BIX and XBD [the banking and brokerage indices] hold in the face of increasing U.S. trade deficit, Japan banks and weak euro?

jimcramer2: I think rates are going to 3.5% which is very good for these stocks.

bleavittii-guest says: Jim, are you still skeptical of Nokia(NOK Quote - Cramer on NOK - Stock Picks) in this environment? Seems pretty remarkable they are hanging onto their margins.

jimcramer2: I am very skeptical, but the world is short it so you let it go up and then you sell it.

RM_Will: I am very skeptical too; can't believe management.

skelly0-guest says: Research in Motion (RIMM Quote - Cramer on RIMM - Stock Picks) still trading at a P/E circa 590 -- surely these speculative stocks still need to be crushed when all is said and down.

jimcramer2: I agree.

jobuck-guest says: Do further earnings warnings blow up EMC(EMC Quote - Cramer on EMC - Stock Picks) or do you think such disappointments are priced in?

jimcramer2: Nothing is really priced in. That is a mistake because if EMC goes up to $40 this week, it would take a nasty fall from there. It is one of three tech stocks I like, but I could see cutting and running at $40.

meglodon-guest says: Fleck, do you like Capstone Turbine(CPST Quote - Cramer on CPST - Stock Picks) here??? What about SatCon Tech(SATC Quote - Cramer on SATC - Stock Picks) or any of the fuel boys? Thanks.

RM_Will: Me?! Are you kidding?

skelly0-guest says: Jim do you prefer J.P. Morgan Chase(JPM Quote - Cramer on JPM - Stock Picks) or Citigroup(C Quote - Cramer on C - Stock Picks) at today's close?

jimcramer2: I like C much more and think that it is well positioned for a comeback when rates go to 3.5%.

RM_Will: I'm short JPM -- I think the derivatives are finally worth worrying about.

jimcramer2: I can't disagree, I am not happy about the derivative exposure, but think that 3.5% beckons.

street_dballen-guest says: How many quarters for the chip inventory to clear?

RM_Will: Well, it depends on the parts. PLDs maybe four. Dram maybe two, etc. Let's just say it won't be this year unless end demand explodes, which I don't think can happen.

meglodon-guest says: Cramer, they are hitting Flextronics(FLEX Quote - Cramer on FLEX - Stock Picks) and Sanmina(SANM Quote - Cramer on SANM - Stock Picks).Do you like them here, all on the SLR news?

jimcramer2: I don't like these stocks at all but I defer to Fleck who knows them better than anyone.

RM_Will: I'm short them all -- it is a terrible and I mean terrible business. The earnings will just collapse. Watch.

RM_Will: OK, everyone should read Brett Fromson's interview last week with Bob Wilson.

tomn442-guest says: Jim -- What do you think about Vignette(VIGN Quote - Cramer on VIGN - Stock Picks)?

jimcramer2: Some guy from VIGN asked me to stop picking on them and I said I would stop picking on them when I thought they were done going down!

bob996-guest says: Bill -- How come the dollar isn't falling due to stocks/economy, etc.?

RM_Will: Boy, that is a great q. I wish I knew. I think once we get the big break in the S&P and Dow then the dollar will go, but it's a lesser of evils situation, there aren't real currencies left, except maybe the Swissie.

mrjoshua-guest says: Bill -- how is Tedd Waite handling Gateway(GTW Quote - Cramer on GTW - Stock Picks)? Is he a good man to have at the helm in a recession?

jimcramer2: He's a real rock of Gibraltar

RM_Will: Well, all I can say is the book cooking that went on there was so obvious, how could he not have known ... so why bet with him? Personally he seems like a great guy, but I wouldn't invest a dime in his company.

rmdunne-guest says: Are the Juniper(JNPR Quote - Cramer on JNPR - Stock Picks) type companies taking out Cisco(CSCO Quote - Cramer on CSCO - Stock Picks)?

jimcramer2: I think it is a big market but that these stocks are still overvalued, let them lift and then sell them.

libowers-guest says: Fleck -- At one time you liked a silver stock. Your current thoughts on precious metals?

RM_Will: I am a director of that stock ... the metals are seeing no investment demand and won't until the stocks really break and the dollar as well. If that doesn't happen, the metals won't catch a bit; metals are about lack of confidence, stocks are about confidence, inverse of each other.

djbimba-guest says: What do you guys think of MRV Communications(MRVC Quote - Cramer on MRVC - Stock Picks)? Has it bottomed out or should we stay away?

jimcramer2: Oh, man, that is not the kind of stock you want in this environment. You want to preserve capital in this environment, not take the offensive.

meglodon-guest103 says: Cramer, what is going on with Pfizer(PFE Quote - Cramer on PFE - Stock Picks)? It looks like death?

jimcramer2:PFE is not knocking the cover off the ball and it is regarded as too defensive. Frankly, I like it here, but like Merck(MRK Quote - Cramer on MRK - Stock Picks) more.

RM_Will: Drugs are great businesses unlike tech, they are the real deal, just too expensive for me.

arniebodner-guest says: JJC -- Where do you think Fanny Mae(FNM Quote - Cramer on FNM - Stock Picks) goes from here? Seems like a stable earnings flow should create more interest in the stock.

jimcramer2: I like the down-and-out financials a little more ahead of the Fed cuts to 3.5%.

RM_Will: I'd be terrified of that one. Talk about playing with fire.

brianye-guest says: They guys do all tech stocks have to go down. Look at Electronic Arts(ERTS Quote - Cramer on ERTS - Stock Picks), Activision(ATVI Quote - Cramer on ATVI - Stock Picks), new highs recently aren't there winners out there somewhere?

RM_Will: Yes, I'm sure there are, but if the vast majority are going down, then why try to find the needle in the haystack? Why not wait until things wash out more?

jimcramer2: Gee. I was just about to use the same analogy. I don't want to be recommending those stocks here.

bardo146-guest801 says: Jim, know your stance on biotech. Any other way you recommend playing them -- MRK, Schering-Plough(SGP Quote - Cramer on SGP - Stock Picks), etc?

jimcramer2: Look, why not play it with a mutual fund like Lissa's? Why do it yourself? Too hard!

theabyss-guest says: Do either of you think Reg FD has played a major role in the acceleration of the decline in the market? It seems that nobody wants to "risk" giving a little guidance for fear of violating the law? Do you think they'll tweak it?

jimcramer2: Look the fundamentals suck in tech with or without FD. And FD will be with us for sometime.

RM_Will: I think Reg FD hit at the moment in time when things were about to come unstuck. It is getting undue blame. You really think Reg FD wrecked CSCO's business? It is important to stop the game playing that was happening it should be left alone.

RM_Will: And the laws enforced.

cgallo98-guest says: Fleck: again, what do you like here? Cash? Bonds?

RM_Will: Cash and short-dated paper Not losing is winning.

jpfct_aol_com-guest says: $64,000 question -- will CNBC do another "Nasdaq 2000 Special"? -- LOL

jimcramer2: Very funny. I still have my Dow 10,000 hat from Dow-Jones.

meglodon-guest103 says: Cramer, why do people keep taking about Yahoo(YHOO Quote - Cramer on YHOO - Stock Picks) getting bought out. No one would buy that dog, no way, no how. Do you agree?

jimcramer2: I think they talk about it because it has a lot of cash and because it could be worth something to someone.

RM_Will: And they need to generate some hype for the tape.

jimcramer2: I don't think it is that absurd, but I don't like to buy stocks on takeover spec when the fundies are deteriorating.

bardo146-guest801 says: Where is Oracle(ORCL Quote - Cramer on ORCL - Stock Picks) going?

jimcramer2: Dead money. Let it rally and then sell.

bigeggow-guest says: Could it get bad enough that gold does anything? Money market funds have problems.

RM_Will: Gold will only do well, IMO, once the dollar is suspect. I do expect that. but no signs yet. So it pays to wait, in case it never happens.

bettex99-guest134 says: Fleck, on a four-year chart I see Micron Tech(MU Quote - Cramer on MU - Stock Picks) heading back to the $10 to $12 range. It is putting in a triple top now. Do you see this as a possibility?

RM_Will: I don't know about triple top, but once folks see what the losses gong forward look like, post the call Wednesday. I think it will head south, it's worth $5-10$ in my book.

manzari-guest says: Is the move in WorldCom(WCOM Quote - Cramer on WCOM - Stock Picks) and the rest of the telcos for real?

jimcramer2: I think that there is a shakeout and that WCOM will be a survivor but that there are better ways to play it, like Qwest(Q Quote - Cramer on Q - Stock Picks).

donlevi-guest says: How long will International Paper(IP Quote - Cramer on IP - Stock Picks)IP still be one place to be?

jimcramer2: I think that it is a good stock, but it is not the only place to be.

dougloser-guest says: I just read your statement about the Nasdaq having met your 1860 target. Are we on our way up from this day on.?

jimcramer2: I don't look for anything big from the Nazz but I am not going to say "Now stay short to 1500" because I don't think we get there.

abidh2-guest says: Mr. Fleckenstein, I am putting my money with Mr. Cramer here. I think you are too negative at these levels. Did you cover any shorts Friday or today in the morning?

RM_Will: Nope. I didn't cover because I think things will get worse and everyone is trying to be an operator ... most are trying to play this bounce and have no clue why we are where we are.

RM_Will: People are trying to guess what the other guessers will guess first. That ain't interesting.

theidea-guest says: Bill, how do the semi-equip stocks such as Applied Materials(AMAT Quote - Cramer on AMAT - Stock Picks), Novellus(NVLS Quote - Cramer on NVLS - Stock Picks), KLA-Tencor(KLAC Quote - Cramer on KLAC - Stock Picks) stay off their lows from December? Are people using the "Intel(INTC Quote - Cramer on INTC - Stock Picks) hasn't cut capex yet" as an excuse to buy them?

RM_Will: Yep, that's the story, for now. They will get hit at some point when people sober up, most people buy this stuff cause it acts well in the face of bad news. That's not too smart.

jimcramer2: I have been doing a long series on the SOX which shows that these stocks are still way too expensive. Please see it.

mainau-guest says: How realistic do you think the guidance by Sun(SUNW Quote - Cramer on SUNW - Stock Picks) management is? Can they avoid boxmaker's woes? Thanks.

jimcramer2: I think they have the same woes and they have pretty much said that. Nothing special there

jimcramer2:KLAC halted!!

chief88-guest says: Jim, congrats on being right for a long time on tech now. After a rally -- if we get more upside here, will the Nazz retest lows again?

jimcramer2: Wouldn't surprise me at all if that happens. And thanks for the kudos. Being negative on tech is not easy for me

krades12-guest says: Fleck, thoughts on buybacks, and whether you like to see buybacks in the metals?

RM_Will: Most metal companies are struggling so bad. I think they should husband their cash. They sure can't raise any.

meglodon-guest335 says: Cramer, is Morgan Stanley(MWD Quote - Cramer on MWD - Stock Picks) crazy or what's it trying to do to bring that Lucent(LU Quote - Cramer on LU - Stock Picks) spin-off IPO , do you really think it will fly, and why has MWD become the premier banker?

jimcramer2: I don't think they are the premier banker. They are just very good and I think will rally into many eases.

michelalana-guest427 says: What do you think of Leucadia(LUK Quote - Cramer on LUK - Stock Picks)? Not tech, has had a nice ride since mid-last year. Almost joined with Berkshire Hathaway RK in the Finova(FNV Quote - Cramer on FNV - Stock Picks) deal? Is this a sector to be in with the rates declining?

jimcramer2: Very hard to value, but these guys do lots of homework and I like them very much.

RM_Will: They are smart as hell. I would never bet against them.

risktrader-guest says: Overall, Jim or Bill, isn't this a better market for directional trades, i.e., short bad fundies, long visibility. Not to be trite about it. Thoughts?

jimcramer2: I think it is.

sandhillstrader-guest says: Jim, do you still believe the consumer cyclicals will lead in 2001?

jimcramer2: Yes, I have a horizon that makes me want to own stocks for six months, and I am confident about these.

liberati-guest says: JJC, is Target(TGT Quote - Cramer on TGT - Stock Picks) far from an entry point or should be continue to wait for higher consumer confidence?

jimcramer2: I like that stock very much. It can go to old highs.

jimcramer2: I certainly like the bonds, I like treasuries.

chief88-guest says: Jim, do you like bonds here if we go to 3.5% or do you consider that pretty much priced in? If so, do you like corporates or Treasuries?

street_dicarter-guest says: JJC -- What is up with the opticals? Any words of wisdom for holders of Juniper(JDSU Quote - Cramer on JDSU - Stock Picks) or Corning(GLW Quote - Cramer on GLW - Stock Picks)?

RM_Will: Pray.

jimcramer2: Let them lift and then sell.

chief88-guest says: Do you see as much negativity now as in '98 or '87?

jimcramer2: I think that we are similar to '98 now, not '87 yet

RM_Will: I think there is less negativity but deep down inside people are worried ... it wouldn't take much more to start a real selling climax.

jimcramer2: That ought to do it! Thanks so much everybody!

jimcramer2: Thanks, Bill, for being so honest! And so right.

RM_Will: It was my pleasure.

TSC-RealMoneyLaura: Thanks for joining us this afternoon. A transcript of today's event will be available on RM.