In June, We Mark Time - TheStreet

There's something to be said for marking time. The longer stocks do nothing except go down three and up three the cheaper they will soon become.

When we value stocks, we think of them as calls on earnings. Right now we are about to stop concentrating on year 2000 earnings and begin to concentrate on 2001 earnings. That's what happens every June. It is a joyous event because stocks that seemed

expensive

on 2000 earnings now seem cheap on 2001 earnings. Especially when these stocks have come down in value as most have.

I know we are wrestling right now, for instance, with

Motorola

(MOT)

. We owned some puts on the name and started buying common stock against those puts. We are reluctant to outright short Motorola because, frankly, it has come down so much and when you look at earnings for 2001, $4.25 by some folks' reckoning, you have a stock that can no longer be considered expensive. (Remember this stock traded at $180 in March.)

One of the reasons I remain optimistic longer term on tech, despite the shellacking it has taken, is this notion that 2001 earnings could make these stocks look cheap if they stay down here.

My notion is widely shared among professionals, including the professionals in the

Federal Reserve

. Chairman

Alan Greenspan

has often spoken about the need for earnings to catch up to stock prices. That's what they are doing right now as we turn the page to focus on 2001. That's what gives us the grounding to believe that we are further along toward reaching a conclusion of the

nightmare of 2000.

So why not load the boat up now? Because these companies have to have a fairly good chance of

making

these estimates if we are going to pay up for their stocks. And in the pending slowdown that will be hard for all but the best companies.

Hence, the difficulty of navigating a slowdown.

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

jjcletters@thestreet.com.