Hardware's Big Blindside - TheStreet

Hardware's Big Blindside

Blame those last few weeks of IBM's quarter on Y2K, Cramer says. Many older hardware companies were reassuring us while their own people were worrying.
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It was those last three weeks of IBM's (IBM) - Get Report quarter that were to blame. They were crummy because of Y2K.

Microsoft, Dell, IBM:

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Message Boards. Remember the way in which corporate America shares information. For two months of the quarter, companies are pretty free with guidance. With one month left, they shut up. They can't reveal anything that would give a clue to anybody. They are quiet.

It looks like in the month of September, the salespeople got Y2K'd. It stunted sales badly. And the worries weren't communicated. The analysts didn't get it.

Hence the big blindside for so many of these older hardware companies. They were reassuring us not to worry even as their own people were beginning to freak out. The quiet period betrayed a frightening reality that we are now learning about.

My conclusion: I am sticking with what is in my medicine chest and my fridge until this period runs its course. (Small tech, telco-tech and the Net should be fine on weakness today.)

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James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long IBM. 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