Who do you believe?

Inacom

(ICO)

and

Ingram

(IM)

, two massive distributors of computers? Or what everybody else in the world tells you about the health of the personal computer industry, including

3Com

(COMS)

as recently as last night?

Last night, we had the specter of dueling conference calls, with my partner,

Jeff Berkowitz

, handling the 3Com lovefest and I taking the Ingram hate-in. We were instant-messaging back and forth as I am sure hundreds of other professional investors were last night, trying to make sense of a world where one player says things are strong and the other says things are weak.

Sure, we may be talking our positions (we are long 3Com and a host of other PC-related companies, but not long Inacom or Ingram), but our takeaway was that there are problems in the middleman business. The distributors between the manufacturers and the ultimate sellers of personal computers seem like they are getting cut out of the chain -- at least for this quarter.

It seemed very odd to us that two large personal computer distributor companies imploded simultaneously. How can you not be worried that all you are hearing both anecdotally and from the PC makers themselves is wrong? Our instincts were to trim back our exposure to the group. (3Com sells into almost every computer, and business is incredibly robust, so imagine the quandary everybody is stuck in.)

But the more I listened to Ingram, the more I thought I heard what had happened in so many other businesses is finally happening in computers. The big chains that sell the computers are now eliminating middlemen like these guys and going direct to the PC makers. I can't tell you how many retailers and resellers of everything from parts to appliances in the past few years have figured out if they are going to keep making money, they have to cut out the middleman in the chain that has his own markup after the factory markup. In an era when you can buy direct from giant personal computer companies, cheaply, both on the phone and the Web, the retailers can't compete unless they keep costs low. But they can't keep costs low if there are companies between them and the manufacturer. The middleman's cut is just too much these days.

Historically, the middleman was needed because you as a retailer wanted the clout that came from the wholesaler. You were too small for the mill to handle. The mill wouldn't bother with you. And you couldn't take down that much inventory and not lose a fortune if sales turned down. These days, though, companies are much more adept at inventory management, and the retailing world is so dog-eat-dog that any edge can mean the difference between survival and failure. That spells tougher times for the middlemen everywhere.

So, we are sticking with the PC group and betting the problems are Ingram/Inacom-specific. Would we feel better about our longs if these two companies hadn't preannounced lower-than-expected numbers? Absolutely.

But feeling better and making a profit are often not synonymous.

James J. Cramer is manager of a hedge fund and co-chairman of TheStreet.com. At the time of publication his fund was long 3Com, and had no position in the other stocks mentioned, 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 TheStreet.com at

letters@thestreet.com.