Editor's Note: This originally ran on RealMoney on Jan. 19 at 10:36 a.m. Cramer holds Lucent, Nortel and JDS Uniphase in his Action Alerts PLUS portfolio.
Someone's got to consolidate this darned telecom industry. We have gone from dozens of important companies to about 10 important companies, but we need to see the players narrowed to a half-dozen. I say that because the growth in telecommunications, while still strong, isn't strong enough for all of the companies involved.
I say that after listening to
a fine quarter from
, where Patricia Russo made it very clear that Lucent is winning more than its fair share of new business.
I say it knowing that there are tremendous opportunities overseas and domestically.
There just aren't
Consider that all these companies are chasing various pieces of business:
- Nortel (NT) Lucent
JDS Uniphase (JDSU) Ciena (CIEN) - Get ReportMotorola (MOT) Ericsson (ERICY) Nokia (NOK) - Get ReportCisco (CSCO) - Get ReportJuniper (JNPR) - Get ReportTellabs (TLAB) Alcatel (ALA) Avaya (AV)
It's just nutty to expect that all of these companies can keep slugging it out. It's ludicrous.
I am sticking with Lucent because I think it is the long-term winner, even as I have given up on all of the others. I want to have just one horse in this game. But right now, I am flabbergasted that all of these companies aren't trying, right now, to merge in one way or another. The competition is just too intense and the gains too impossible to come by.
Or, to put it another way, if this is the reaction to how Lucent has done in this environment, or
how Motorola has done, does anyone really want to be in Tellabs or Nokia or Alcatel or, gulp, Nortel?
Didn't think so.
P.S. One of the keys to successful investing is a smart portfolio strategy. So you might want to consider a
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At the time of publication, Cramer was long Lucent, Nortel and JDS Uniphase.
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.
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