Trying to Make Sense of It All

First, let's get one thing straight -- everybody is afraid.

Suddenly it is not just Gateway (GTW)-specific. It is not just BMC Software (BMCS)-specific. It is not just interest-rate-specific. And it is not just Lucent (LU)-specific. The selloff has merit, makes sense, is not irrational, and can be justified by bull and bear alike.

Second, the Lucent conference call, while very clearly indicating that demand was not a problem, can't allay fears because it is layered on top of these other recent disappointments. And this, of course, is layered on top of the greatest fourth quarter anybody can ever remember.

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Third, we could still fall considerably and barely (Freudians, please note that in the first draft that came out "bearly") dent that colossal gain we had last year.

Fourth, it would be enough just to fret about how the payroll number might be because, as everyone knows, the Fed wants growth to be slower than it is.

At Cramer Berkowitz, we have cash both coming in and on the sidelines. We feel confident that we can continue to put money to work in the Lucent-created downturn.

We are split, however, on where to go. I was arguing last night that maybe we need to buy some safety first before we average in more on tech. If Colgate (CL) or P&G (PG) come down off of the futures, that should be our first buy. A Kimberly-Clark (KMB) would fit that bill.

Jeff Berkowitz likes to buy distressed merchandise of nondistressed companies. Confident -- post-Lucent -- that telco demand and semiconductor demand is still strong, he is drawn toward "multiple" tech, or tech that sells at a multiple to earnings.

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Lucent (LU)

I am actually more confident that the B2Bs and the TheStreet.com New Tech 30 (formerly the Red Hots) have corrected enough to add to those positions, as we only have token amounts.

Neither one of us, of course, is so certain that we can sit here and say, "You have to buy this or that." If we were, we would be robots with a script.

Nevertheless, as we rap up our calls on Lucent we come down strongly on the side that says that the real earnings season will soon be upon us and we will regret selling our basic core tech at these prices -- even though they are up substantially from last year at this time.

I wish I could exude confidence right now; I know many people wish I would. But in the end, I am a portfolio manager struggling to make sense with a lot of unknowable items.

I came in with cash at the beginning of the year, not expecting, but actually hoping for, a dip to get in. I did not expect a chasm. But now that it is upon us, I am not going to turn tail.

That's not how the game is played.

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