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Cramer's Rewrite of His "Cashing In on Crazy Times" Piece

He revisits a Tuesday column on Net mania.
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You know what they don't tell you in the mania handbook? How much money can be made while you are waiting for the bubble to burst.

(It is pretty much a given that we are in a mania, so I stepped out of the closet this week to stop this crazy rationalizing of these stock prices. Later in the week I had a mind meld with Ron Insana where I was frantically trying to put together a chart of

General Electric

(GE) - Get Free Report in 1929, while he was doing the same for the

Radio Corporation of America

. It was scary, in that these two stocks had charts that, from the left side, mirrored what I am seeing in Internet stocks. Yes, there is that much volatility and parabolic, ballistic motion that the comparisons make sense. This is an important Rubicon, because you are never supposed to cross into 1929 analogies. It's like invoking a card that you can only do once because if you are not right you are just another doomsayer, and I have avoided being a doomsayer all my life.)

I just finished two conference calls, Intel

(INTC) - Get Free Report

and Yahoo!


, and I didn't hear anything from these two bellwethers that should be pinpricks.

(After the completion of quarterly earnings it has become the custom to issue a press release and then host a dial-in conference call. On these calls you find out how management did the numbers, whether from gross margins or revenues or one-time items, so that you can gauge how the company will do going forward. Remember, the thing that matters is "are earnings estimates too low or to high." If they are too low, analysts will raise number and the stock will go higher. If they are too low and nobody likes the stock, there is a chance someone will upgrade and the stock will go even higher. Sometimes stocks run in anticipation of good news so they have no place to go but down. That¿s pretty much what happened with both Intel and Yahoo. Everybody was expecting great quarters and we got them, so there was no room for the stocks to go higher. The good news was out.)

You will hear plenty of negatives about Yahoo tomorrow. You will hear that page views were not as strong in December as someone would have liked.

(Actually the press was less negative than I expected -- perhaps because on the conference call management was incredibly forthright and intelligent about how the numbers came together and how strong the true growth of the business is.)

You will hear that e-commerce could have been even stronger. You will hear that the company was cautious on raising guidance. And all I can say is that I hope it brings out sellers because I don't own any Yahoo and I would like to pick it up some 100 points below where I sold it the other day. Because this was a dyn-o-mite quarter and January is off to a great start.

(This is exactly what happened. I had a moment of real prescience with this stock, with my 440 boot and my 330 buy, but I kicked it out back at $400 because, while I love Yahoo, as I said many times this week, the griddle has become too hot for me to take these stocks home at night. I like to leave them at the end of the day.)

I am sure that people will pick at the Intel quarter, too. Celeron -- why did they have to name that after a crummy Goodyear

(GT) - Get Free Report

spinoff? -- wasn't great.

(A few years back Goodyear spun off a division, and the stock bombed, so it amazed some of the older stock trading folks that Intel picked this name for a chip.)

Much of the gains were made with gross margin improvement. Revs for the next quarter are a little below what the whisper was looking for. When gains are with revenues, people worry about gross margins. When gains are with gross margins, people worry about revenues. What can I say?

(This is why some analysts are so great. They help you put things in perspective. For me Mark Edelstone, the chip analyst at Morgan Stanley, who has been so spot on about everything involving these guys, assured me of the quality of the quarter. Why do I need assurance? Heck, everybody needs assurance. Remember, when a stock goes down after a good quarter you may just be watching a phenomenon of profit-taking after a run up, or you may truly be experiencing a fiasco. This point was brought home by an incessant emailer this week who kept telling me that

Advance Micro

(AMD) - Get Free Report really had a good quarter even though the stock went down 10 points. That's wrong, and in the world I live in, anybody who argues otherwise might as well argue that the world is flat.)

People like to worry. I like to buy when these worries seep in. If worry seeps in on Intel, I will buy more. And I will buy personal computer stocks on this if they selloff too.

(They sold off because of Brazil and I bought them. That was a true buying opportunity, because people sold all stocks indiscriminately, but the ones with good fundamentals came back very strong.)

Again, I am long, so take what I say with a grain of salt.

(Here's an important point. I can't tell you what to buy or sell; that's not this column's job. I can tell you what I am doing at the moment. That does not mean you should do it. I am stating my CONVICTION for the moment. I point this out because until I started writing, there was a perception among journalists that a guy who writes an article where he is long a stock and says he likes it is corrupt, but a guy who gives an interview about stocks and says he likes something that he owns is honest. This corrupt journalist/honest interviewee things makes me sick, and I have done my best in these columns to show why. But I still feel compelled to point it out constantly, because if I am not vigilant, some hack journalist will try to make his name by saying that Cramer is corrupt for writing about stocks. I have had this happen twice now and I know it will happen again, and it is getting annoying.)

Both of these stocks are tough calls here, nonetheless, because of how far they have run. Intel, at least, can be considered cheap vs. the current 60- and 70- and 80-P/Es guys out there. Yahoo, cheap? I mean, forget it, on a price to minutes watched? On a price to 2007 revenues?

(Yahoo is obviously not cheap. But we will pay endlessly for winners in this new world. I think Yahoo is in second place after

America Online


, as a possible winner, but to buy a stock with a $50 billion market cap before it HAS won defines mania, and as long as we all admit it, we can seek to profit from it.)

But no matter in a mania, and we now all have to stipulate we are in the mania phase. You can make huge amounts of money before people decide that things aren't so great.

(This is where we are now. Very few people believe that these stocks will be up appreciably a year from now. Very many people feel the stocks could be up big two weeks from now. So, the goal is to be in, take advantage, and then get out, because, again, if you look at that chart of RCA, the ramp up made you rich while the slide down wiped out darn near anybody. "Prudence" dictates not playing at all. But I know people are playing, and I know I am playing because in the short term the performance is too great to miss. But we should never kid ourselves that money can be lost here, and if you have done nothing but ride these stocks up without taking anything off the table to date, you are setting yourself up for a fall.)

In the mania phase, I think all that has to happen to keep stocks going higher is that there can be no REAL disappointment. Mind you, I am not talking about bogus disappointment, like a miss on a phony whisper, but a real miss. We just didn't get one from Yahoo.

(This judgment may not have been right as Yahoo went down all week. I guess it is possible that these stocks could roll over AHEAD of a glitch. I don't think so though. I think there has to be genuine blow-ups before this mania unwinds. To wait for those blow-ups to happen, however, is to run the risk of giving it all back. That would be a crime.)

James J. Cramer is manager of a hedge fund and co-founder of At the time of publication, the fund was long Intel, although positions can 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 at