A Tech Play That Makes Sense
Let's say the bounce we are seeing after hours is for real, a kind of relief that the only things that have come out in
Microsoft
(MSFT) - Get Microsoft Corporation Report
were what we thought, and nothing new and negative. What bounces first, the
Commerce Ones
(CMRC)
or the
Intels
(INTC) - Get Intel Corporation Report
?
To me the only safe answer is the latter, because institutions want earnings. Individuals want speculative growth, but I am afraid that there are too many individuals who reached for stocks during the last few months -- that February margin figure was the killer, and they will be sellers on strength, not buyers.
Also, unless the
supply situation is curtailed (I keep writing about that and the
margin situation because they are the two factors in control of where that portion of the market goes), a convincing snapback rally will not happen.
We call it old tech, or "
Jeff
TheStreet Recommends
-tech," meaning it has earnings, it is leveraged to either wireless or personal computers or the Internet and it will not surprise negatively when we get the numbers in the next few days."
Matt
-tech," the highflying stuff, will now be subject to a level of
scrutiny I wouldn't wish on my worst enemy. Anything that is said that is not 1000% upbeat will be viewed skeptically.
The hybrid: Matt-tech with earnings --
Yahoo!
(YHOO)
and
America Online
(AOL)
. I still want to make cases for those stocks, if only because I think every one else's weaknesses are their strengths. They are the anti-Net play because, if there were only two TV stations in the world, boy would they have a lot of advertising.
So we are going to look for bargains in the Jeff world and in my world, which is the ABT -- Anything-But-Tech world -- and bet that we saw some sort of Jeff-tech bottom in the throes of the predicted
Mister Softee verdict.
We are selling nothing. Not after this decline. Things are just too attractive.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Microsoft, Intel, Yahoo! and AOL. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at
jjcletters@thestreet.com.
