Smarter Money: No, JJC Won't Let Up on Underperforming Tech Funds
There's a lot of money on the line today at these tech mutual funds. They've put four straight good days together and now they are thinking, "What the heck, the worst is over; let's go back in and buy!" Man, I wish I had some of the stuff they have been smoking. When will these funds realize that their method of buying overvalued stocks and keeping them overvalued is kaput? What will make these funds realize that they can rely no longer on the same old horses to take them higher, and that they must either discover new ones or close down?
It is remarkable to me, at the end of another crummy quarter for these folks, that not one of them has broken ranks and questioned the secular growth thesis. Here we have
360networks
(TSIX)
filing for bankruptcy today, taking out another possibility of a turn that is needed to get more orders, and these folks don't even skip a beat. They are right back buying them.
Oh, and the reason I know this is every single trading desk reads us and they can't resist telling me what is going on. I thank you and of course everything stays confidential. Until I hear one of these wunderkinds come to terms with the radically changed landscape, I am going to keep suggesting that you put your money elsewhere. The denial these folks have been experiencing is now legendary.
Funny thing, someone emailed me yesterday and said, "What is it with you and these funds? What are you gaining by bashing them?" To which I wrote, "Nothing, nothing at all. Except credibility." That's all that matters to me these days. If I can keep you from losing money, you will remember me and remember us and help us. If I can't, we will fade.
But I am not going to shut up about these underperformers just because someone says that I am "picking on" guys who are down. These funds are no better than sports teams that have the same old management and the same old players and finish last for a couple of years and everyone says, "Don't worry about it, they will come back."
Performance is everything in this business. And these folks don't have it. I don't care how many
Morningstar
stars they have for their rearview records, and I don't care how cool and calm they are in front of a camera. They don't know what they are doing and they are in over their heads. Enough said.
James J. 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. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to
jjcletters@thestreet.com.