James J. Cramer chatted on Yahoo! on Wednesday, Mar. 15, at 5 p.m. ET. As with all chats, this transcript is unedited.
I am here!!!
Jim is here! Welcome Jim!
Welcome all!! Rough NDX -- Good Dow! to you!
How do you reconcile a big up day for the Dow, with the Big bad events-- PPI, CPI, Fed meeting-- right around the corner? Is the move sustainable?
I think that the S&P and the Dow had fallen so far behind the market and the companies that make them up are so insistent that their stocks are cheap that it was ripe for a bounce back.
I also think that everybody got too complacent and unwilling to sell the NDX plays. So you had new money drawn to what was down, not up and a short squeeze among those who had hedged their tech with S&P shorts -- many do that. It has been a big winning trade. UNTIL TODAY.
Jimbo....have your thoughts on AOL changed?
Not at all. I remain long AOL and believe in the combination but as I have said many times, it won't come roaring back because of the arbitrage pressure.
Jjc, love TSC. Do you see any potential for the superconductor stocks (scon,cdts,isco ... ) that were all the rage last week?
I bought them today and yesterday. I am feeling a little bloodied but that's where I committed most of my capital today.
What do you think of 3com, and the PALM ipo? Thanks.
I wrote a piece today talking about how I sold my PALM. I think that PALM's ipo represented some sort of spike in investor sentiment that clearly, in retrospect was too bullish. Now it might be too bearish, but that view cost me money today.
Jim, is NOK still a favorite in the wireless area?
I bought stock at the bell because I thought it might have pulled back enough and because I am thinking that it has had quite a pullback. I do worry, as I said today and yesterday, that margined players are involved there and caused it to go down at the end of the day.
What's your opinion on wireless broadband plays like NTRO?
I have been playing wireless with majors like ERICY and NOK, not much smaller stuff.
What's your take on the large pharmaceuticals ie MRK, BMY?
I think they are rallying in a bear market. I don't think they have more than a few days for rallies. And I love your name, by the way!! You aren't related to me are you???
JJC, was the down move in YHOO overdone and do you see moving back towards 200?
I remain long YHOO but I did not add to it today because it was not down enough. I bought stocks that were down 15, 20 and 30 points not down 8.
You have written about old tech stocks as the place to be in this market. I consider Cisco one of these. However it did not follow some of the tech stocks like Intel, but instead followed the rest of the NASDQ down. What's up with Cisco?
I think that was just the last half hour when the margin selling got really intense. CSCO was very strong, otherwise, for much of the day. I think that old tech has more seasoned holders and that's a better place to be.
Which stock is the best broadband play over next 6 month to 1 year timeframe?
I have been thinking that it is 7/24 solutions, but I can tell you that the holders of this stock are also margined players and I am worried about their durability.
Jjc, is ATHM a goner? And how 'bout WCOM? Thanks from one of the original tsc subs.
Thanks for those nice TSC comments. I hate to be too negative but I don¿t really care for athome, which peaked some time ago and I think that worldcom is not as good as T which I am long and has a great wireless strategy.
Jim, What biotech picks have you bought during this recent decline?
We haven't put new money to work in that area yet. We think the margining in that sector is way too big and is not over yet as far as margin selling is concerned.
What's up with RFMD's big tank today?
Please, understand that RFMD is just part of a larger rotation out of tech that has really roared. These stocks were and are momentum plays that have weak holders who were selling because they don't have enough capital.
Is there anything wrong with RFMD? Nothing except it looks like it got to high, That can be said about a whole host of stocks in the last week.
If it is the small players getting margin calls, how can they have such an impact with their small lots?
Hold it, I think that they had a huge impact on the way up and they are now just giving back some of those gains. I think that the market has been a bit dysfunctional because many of the stocks that are getting clocked had very small floats to begin with and can be impacted by smaller units traded in big numbers.
ORCL, where from here?
Maybe I am talking my position but that was a great quarter, Oracle had huge buyers today but the NDX, which is its cohort, was for sale all day. If that NDX Pressure would subside I think Oracle can run to $100.
Steel Rain today Jim -- You didn't sell your JDSU (Just Don't Sell Us) did you? Outlook for JDSU?
Steel and acid rain to me. I have an umbrella over my JDSU position. I think this company is doing very well but remember it, too, is in the cohort of stocks that have a lot of tag along margined buyers. There are no margined buyers in Colgate or Procter. They are in these very volatile NDX names.
How can I become a millionaire
I think it is more important to worry about the kind of larger issues in life. If you work hard in this country I think you will do well financially, but it is less of a ticket to happiness than the books or movies make it out to be.
Jim: Your take on MSFT and the odds of a positive settlement in a short time frame?
I have stopped speculating on that (irony says that maybe it will happen soon) but I think that something could happen in the next few months. I don't know any thing more and those who have predicted this endlessly look terrible.
Jim, Best wishes again on your wife and father's recovery. Any views on Comverse (CMVT). I am long.
What are your thoughts on Gold?
First, thnx for those nice comments. My wife is miserable but recovering, my dad is back in action doing aerobics already! I don't know CMVT well and I know enough to stay away from gold,. I wont buy it
Jim, HGSI, WAT, long-term
I like HGSI long term but what a run it has had. I am not a big fan of WAT.
Jim, what companies do you think will shape the new economy in the next 3-5 years and would you be buying them now?
I think that these will be many of the same companies that have shaped in for the last four or five years, Nokia, Yahoo, AOl, INTC, ORCL, CSCO and if I owned none of them I would be buying. I own them all and now buy them on real weakness. They have all moved tremendously year over year but they remain the best buys
Your thoughts on INKT?
I wish it would come down more so I could buy more. But from the looks of this tape I am going to get my wish!! :)
Do you own BEAS?
Oh Crayon!!! Oh heavens!! This was the subject of a major inquisition internally. This BEAS pitted two warring factions in my office, the ones who want to own the high fliers because they are doing so well and the ones who didn't want to ride things dow and wanted instead to get out.
The former camp won,. Which means my firm lost. But we like the fundamentals we just think, again, that the wrong, worried holders haven't been washed out yet, We don't want to be washed out.
Jim, any early favorites for the Kentucky Derby?
You know, I am still away from that sport until April. I will know by next chat
Do you have any feelings about WAG?
Holy cow, this market has changed, nobody has asked me about Walgreen in years!! I am not a fan and think that if you want drug stores I would rather be in CVS which has more expansion ahead of it
is this move in DELL for real? perhaps breaking out?
We think it is. We think things are getting better at Dell. I wrote several pieces today saying I wasn't buying new economy tech stocks because they have further to fall because of margin selling, but I was buying old tech and Dell is precisely what we are talking about when we think old tech.
You panned PSIX a year and a half ago right here on YHOO. Does that opinion still hold?
I still don't like it. Better fish to fry, which, by the way, was the same thing I said last year
Jim, any response to your open letter to Vince McMahon and the WWF?
Funny you should ask that. I thought there would be. But I guess he doesn't read thestreet.com. His loss.
JJC: When will it be safe to touch the "Red Hots" again?
After the close we convened a meeting to discuss that. We have not added to our red hot positions during this down turn . We have been adding money to more traditional tech. We think that you wont know when the margin selling is done in the red hots, and that controls.
But that said, we felt that we should begin to buy these kinds of stocks in earnest if we get a decent ppi number because they have come down so much. So , for example, we haven't added to Verisign, but maybe it is time to do so
Time to buy the banks and insurance companies?
I think you cant buy the insurance companies yet but they are very cheap. We owned and bought some banks today.
Predictions for tomorrow-- snap back or down again-- and which way are you playing it?
We are betting that the NDX rallies and the SPX sells off
After TRB - Times Mirror what do you think of NYT at 42
I think that NYtimes is cheap. I am familiar with Times Digital Ventures from my work at TSC and I think they are terrific,. I am very impressed with the work Martrin Nisenholtz has done there. The NYT owns a stake in TSCM
Who do you still like in the B2B space?
I still like BEAS, INSP, 7.24, Sonera, vrsn, vign, vrts and prsf
Any opinions on the downward spiral of healtheon and dr. koop?
You know I have never ever liked that segment and I think the whole group goes lower, I just don't get those business models. I know some say the same about TSCM but at least I know we have a business.
Jim, would you buy any JANUS FUNDS now?
I recommended some just this morning. I don't think this selloff changes anything for them. They are great managers and I am using them for my daughters' gift plans
Jim, Will Onsale(EGGS) ever come back in?
I don't think so. These companies are just glorified catalogue companies
do you think it is the lockup expiration killing epiphany or did the market not like the Octane purchase?
I am long EPNY and I didn't like the Octane purchase. I sold some. They . even admitted they paid too much, This was a killer
Isn't this new tech blood bath similar too the April crash in the Inets? Technical damage has been done and it will take a few months to build base and recover?
That would not surprise me. These are stocks that everybody thought were too hot to sell. Now there has been a ton of technical damage and people aren't finished selling them. They are hard to value because they never traded on price to earnings multiples.
And they keep making deals and issuing new stock which is a disaster. As I said, we are not buying these stocks yet but we haven't sold our core positions in them, I think we will have to start buying soon for a snapback rally but the margin selling is just incredible!!!!!!!!!!
Your thoughts on the retail sector please
I continue to think that retail cant be owned until the fed thinks that consumer spending has cooled enough to stop tightening. You get these little moves up but they aren't anything to stick around for,. There is still way too much competition from the web and catalogues, It is a very cutthroat business.
Jim, what is your favorite restaurant in NYC?
My favorite is a little hole in the wall called RUNGSIT, a Thai restaurant at the corner of 23rd and 3rd. The best Pad Thai I have ever had. And the ladies who run it are incredibly sweet and really helpful.
I always feel like they are making home cooked food and it I take out from there on special occasions. It was also the place my wife asked me to get food from after her surgery to make her happy. she loves it too
Henry Blodgett gave VerticalNet a price target of $350 today, and the stock promptly went down 12 points. Will this mean more next week after the Fed meets?
I think this is still one more stock that is caught up in the Red Hot sell-off. I wrote today that he who defends everything defends nothing. We decided we couldn't defend this one considering our other exposure. Right now it looks like a wise decision. These stocks have been hammered.
Thanks for Helen Meisler, I've been a subscriber for 2 years and love the site. What 5 stocks would you hold for the next year?
Helene is terrific and has been helpful for two decades now. She and Gary B Smith are unstoppable. I continue to like the same five names I have for some time: CSCO, YHOO, AOL, NOK, SUNW, plus MSFT, INTC and ORCL
what about DoubleClick and the privacy concerns?
I think they are at this point discounted but Doubleclick now is just one of dozens of high fliers that have come down as opposed to one that is being picked on by the attorneys general. I don't think this is a good level to buy it. I would rather buy some others that have come down even harder
You like Portal Software?
Ouch, this is another one that hurt me today. We had scaled out of a lot of this one but started rebuilding it today, too soon I am afraid
Any thoughts on WAVX in the internet security sector?
We are in checkpoint and verisign, these are tough enough!!!
Is Motorola new or old tech?
MOT is old tech. I am concerned that this ran up too much because of the Gilder factor. We sold it a few days ago and put the money into ERICY and NOK
Jim what are thoughts on CIEN? Thanks.
We just road that one down 15 points. Painful. But the fundamentals remain strong. We regarded it as old tech and built it today as opposed to new tech which we did not add to because we are worried about margin selling.
What is your views on momentum trading?
I have never liked it but have had to do it because I feared that if I didn't my investors would take the money away. It is one of those things that I would think one day will fall out of favor but right now is the preferred way for most investors and traders ./
Do you like EMC at this level?
We bought some EMC down here because we thought that it was part of the Old tech that might rally, It didn't. But we want to be in that space.
Jim, when the fed talks about high equity prices do they take into account that 90% of stocks have sucked.
NO they most certainly don't. They are really looking at the Red Hots and the B2Bs and the IPOS and the Net. Because those are generating lots of gains. The NDX is the focus, not the Dow,.
Will Schwab's runup continue?
I think Schwab is kicking butt and is one of the best brokerages to own.
Exodus seems to be the analyst's favorite net stock. What do you think?
We are long it and we bought more today. That said again, I have to warn you that this is another one of those stocks that is in weak hands and might be prone to margin selling. That is a very important variable that must be considered.
Jim, do you admit you were wrong about lucent?
That's a hard question because I was right to avoid it, I was right to think that it was doing poorly, but once it got crushed I should have bought it. I was certainly wrong not to buy it. But remember, admitting that I am wrong is part of the game.
Will CMGI have a big runup in conjunction with the AltaVista IPO?
Two weeks ago I would have said yes. I don't think that game is working right now. The tale of this tape is that stocks don't run right now on that kind of stuff. Maybe they will next time, but COMS-PALM kind of killed that move.
Hi Jim, can you recommend a super safe mutual fund for my wife? thx!
Oh gee, remember, supersafe means non equity because equities are by nature risky. I would think that supersafe might mean that you have some combination of bonds and stocks and I know that Fidelity Equity Income has had a bad year maybe it is time to buy that!
How do you feel about Internet Capital Group at these levels ?
It just had a huge run. When stocks have huge runs I take stuff off the table./
Has you opinion of the e-builders like SAPE changed lately?
Not at all. I think that remains a very vulnerable group. It scares me that so many people are in that space. Too much competition for talented people. They worry me still.
How about etrade here, any truth of talk with axp or others
I don't know. I am on the fence about that stock. IT seems to have hit some sort of floor at $25 and a ceiling at $27. I don't own it.
JIM, Is genome a has been?
Maybe, but I don't think so. VIcious shakeout and then base building and then rally again is probably more likely.
Who are your "Vintage old tech" favorites?
Intc, csco, txn, lsi, nok, dell to get started
Genius Jim: Duke or Michigan St. ... long Duke!!!
Hey Steve! You know I am pulling for Temple so I cant go there
Jim, what's your take on WMT?
If you have to own one retailer that would be the one.
What sector do you advise other than Techs
I like some of the financials down but nothing much else yet
Since nasdaq is driving the economy, how significant is the recent drop of the dow?
I don't think it is significant at all. I think I leave her worried that the NASDQ isn't done going down but that that's where all of the interesting companies with revenue momentum are. I wish I could rely on more traditional safer stocks but they are not safe anymore!! Check out PG!!
Thanks for joining us...it was a blast as always....James J. Cramer of TheStreet.com joins us every month. Hope you will join us again!
Lisa thanks so much and thanks for attending -- and I will see you in TSC!!!