Examining the Bull Case

The bull case? Lucent (LU Quote) is getting its head handed to it by everybody. Nortel (NT Quote) and Cisco (CSCO Quote) last night both came out and said things are hunky-dory. Both of them could, if you were a raging, snorting, blind bull, go up on this news, not down.

So why not just buy them aggressively? Because there is a whole host of other factors that make people worried about the winners as well as the losers. For example, if Lucent is getting its lunch eaten by Nortel, does it poison the lunch? Does it so cut prices in business to get orders back that it ruins the party for everybody?

Click here for the latest filings from James J. Cramer.

Are the people who are long Lucent so wounded that they will sell other stocks out of aggravation, worry and fear? It tends to happen. And people own the same kinds of stocks, so they might turn weak holders into sellers.

Or consider this set of worries: The individuals who own Cisco or Sycamore (SCMR Quote) or Juniper (JNPR Quote) also own Lucent on margin and they will get sold out of everything, so the holders turn sellers of many a favorite name.

Cramer's Latest: Join the discussion on TSC message boards

---

Lucent (LU)

Nortel (NT) As of this writing, if you bought Lucent last night after it opened, you are now whole or even up on the trade. So maybe the margin selling won't be as great as if it were at 45 or 40. But it will be there lurking.

So, in other words, even if you believe in the bull case on the current fundamentals, that could change for a whole host of reasons. Understand, I am betting the bull case. (Bulls of a feather?) But I want you to understand why the bull case may not work -- at least as fast as you would like it to.