Personal computer sales just won't let up. We know they should have peaked a hundred times. We know we should have made a fortune betting against this industry as it rolled into the oblivion of radio and then television sales --
But the darned machines keep reinventing themselves, including
, which just reported a blistering quarter. (I am long Compaq, but that makes it no less blistering, despite attempts by
The Wall Street Journal's
editorial page today to cast doubt on the ability of someone who is long a stock to think reasonably or honestly about it.)
This morning, we came in worried about our Compaq position. We sold some yesterday into the Compaq-as-Net hype because the desire to cast hardware as Netware can only be extended so far. After all, Compaq is getting rid of
("Veesta" or "Vista" -- let's make up our minds
), not buying it.
But the days' sales outstanding and the tone of the quarter indicate that things just keep getting stronger in the core business of making and selling personal computers.
Over the course of the cycles of personal computers, there is always someone out there making the negative case. It is always compelling. It is always enticing to the skeptics. In the last few weeks, I heard the bear case repeatedly: channel-stuffing, warehouses with personal computers brimming, heck, etc. We will hear those theories again. Maybe next time they will make us money. But not this time.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At the time of publication, his fund was long Compaq, though positions 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 by sending a letter to TheStreet.com.