James Cramer Chat on AOL

Cramer shares his thoughts on Oracle, Disney, Dell, Coke and more.
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James Cramer chatted on AOL Tuesday at 5 p.m. EDT. As with all chats, this transcript is unedited.

PF Trader:

Welcome everyone to another edition of

TheStreet.com

Live Welcome back Jim!

TSCNYjjc:

I am thrilled to be here, lets get moving. It feels like a lifetime of a week already!

Question:

Please give your opinion on Home Depot.

TSCNYjjc:

I am not as long the retailers because I fear that the new stance of the Fed could dampen enthusiasm for a lot of stocks, but I bought some retailers today and tried to get HD when it was down and missed. This company reported a great quarter and has a great outlook.

Question:

Why do you dislike Oracle and what do you see in the future for them?

TSCNYjjc:

I have been negative about ORCL (but not short it) because the company has not been executing with the kind of precision the street wants to see

PF Trader:

They're just not the dot in .com!

Question:

Jim, what's your take on AOL going into tomorrows analyst meeting and beyond?

TSCNYjjc:

Well, I am long AOL, but I don't expect any fireworks. You know I was listening to Maria Bartiromo talking about how it is going to be a big meeting.

TSCNYjjc:

But I think that AOL is just going to offer a good solid show and a good defense of its broadband strategy. I did sell my ATT though because I think AOL will articulate a good anti-T strategy.

Question:

Jim, what about qwst,wcom,and emc?

TSCNYjjc:

Oh. My old faves. Qwest got too high for me yesterday, but I will buy it on any weakness. Anschutz and Nacchio are doing a great job. I got scared when I heard they wanted in on USwest, because, sorry, but I don't know why anyone would want that dog!

TSCNYjjc:

EMC has had a big pullback and I think is probably buyable, but I am no longer in it because of increased competition.

TSCNYjjc:

WCOM remains a favorite and I cant believe how many deals there are in telco-land meant to compete with WCOM and yet WCOM is taking it to all of them. I think Ebbers, the chieftain, is terrific, and heavily incented to make money for you, the shareholder.

Question:

Jim, what's the next hottest IPO due out? Thanks.

TSCNYjjc:

That's a very tough question. I am in an awkward, position in that I don't feel comfortable hyping stuff that is in registration. Suffice it to say that the IPO market is still red-hot and a great place to be.

Question:

Can anyone explain options, simply?

TSCNYjjc:

Yes, me, in the Best of Cramer archives on

TheStreet.com

site. I urge you to go there.

PF Trader:

Also the NY Inst. of Finance book: Options Seminar

TSCNYjjc:

I started with that book; great idea David!

Question:

So Dell seems to keep paying the price of below 50% growth, it is a buying opportunity at this price?

TSCNYjjc:

I am long Dell. I know that Dell missed the gross margin guidance so I don't think I am going to make any money in this one. It is a bummer that a company that is doing as well as DELL is not doing ENOUGH, but that's the way the street views it.

Question:

Jim, what would it take for you to like the drugs again specifically PFIZER?

TSCNYjjc:

I don't like the drugs here, and PFIZER doesn't seem to want to go up. I think that you cant buy the drug stocks until after Congress is done fooling with Medicare.

PF Trader:

What's your take on the online drug stores?

TSCNYjjc:

People like Drugstore.com very much. I know that CVS assured me that it had a great web strategy, and then out of nowhere just bought someone else.

TSCNYjjc:

The Express Scripps management seems solid. But I am not playing that sector of the Net.

Question:

Is Disney no longer a stock that should be considered a core holding for he long-term?

TSCNYjjc:

Management is the problem there. No one wants to talk about it, but the management is the proverbial elephant in the room. We need fresh blood at Disney and until I see it, I am not a buyer. At the top!

Question:

Hi Jim what do you think of GBLX and BRCM?

TSCNYjjc:

Here are two that I let go way too early, and I had huge hits in them.

TSCNYjjc:

Intel is in a tough spot. I don't think you can.

Question:

What do you make of DELL's announcement? Where is it headed?

TSCNYjjc:

Broadcom., by the way, is on fire here and I wish I had not cared so much about valuation. I missed a great move because of concerns that it was too expensive. Intel, on the other hand, is flat-footed here and does not make much sense to me.

Question:

JJC, what's your take on INTEL going forward?

TSCNYjjc:

The problem with Intel is that it is in transition. It is ramping Pentium 3, but it is not being accepted fast enough and the quarter may be tough.

Question:

What do you think of SUNW?

TSCNYjjc:

SUNW gives mid-quarter guidance tomorrow and I understand that it is tracking in line. Up here I would like to hear better than in-line, but SUN is doing a great job, and is a terrific long-term position.

PF Trader:

(Now there's the dot in .com!)

Question:

Future prospects for KO?

TSCNYjjc:

I am short KO. Out and out short it. I think it had another bad month and I don't understand why Coke's stock just jumped. It is a good company, but not a fast growing company any more. It has a high multiple and declining volumes.

Question:

Welcome Jim, I enjoy

TheStreet.com

and your visits to Squawk Box. How do you feel the market will recoup from todays negative news?

TSCNYjjc:

I think the market is in fine shape. I think that once the Fed news is digested, that people will turn buyer. The atmosphere is benign, the correction is running its course.

Question:

What is your outlook on the on-line brokerages?

TSCNYjjc:

These are still growing like wildfire. As long as they keep adding people hand over fist they will go higher.

Question:

Do you see any time in the near future when oil service stocks will be a buy?

TSCNYjjc:

I am hung right now on HAL. I own some and it looks like it is going lower. I feel uncomfortable in it with oil going down big as it did. The sector remains difficult to trade and I don't recommend that people start new positions in the group until it declines more.

Question:

Should I stay long on Lucent?

TSCNYjjc:

I love Lucent. This has become a stock that is fashionable to beat up on, but I think management showed us a lot last quarter, and put to rest alot of the critics. I am long the stock.

Question:

What are your thoughts on COMPUWARE and BMC software?

TSCNYjjc:

I don't like that segment; it is way too competitive.

PF Trader:

How about IBM's remaking as a dotcom-like company?

TSCNYjjc:

As much as it pained me to hear Gerstner beat up on all of the on-line pioneers out there, when news came over that the Fed had initiated a tighter bias today, and IBM sold off, I bought some.

TSCNYjjc:

The company is doing extremely well.

Question:

JJC: Do you have a new 5 stocks for next 5 years list?

TSCNYjjc:

I am afraid I will just bore you with my faves: AOL, WCOM, CSCO, MSFT, and a new one, Goldman Sachs.

PF Trader:

Same stocks - but never boring to make $$.

TSCNYjjc:

Very true!

Question:

What's your long term on Unitedhealthcare and HMO's?

TSCNYjjc:

This sector is too tough for me. I think UNH is very, very shareholder oriented as is AETNA and Cigna. All three companies are doing well.

TSCNYjjc:

But, I think HMOs are going to be political whipping boys and I want to stay away from them.

Question:

Ambercrombie Fitch had a great quarter; Is it due to go up?

TSCNYjjc:

I have a strange position in ANF. I am long the calls and short stock against it on a ratio basis.

TSCNYjjc:

In English that means I make money if it goes higher and I make money if it goes lower, but I don't make diddly if it does nothing!

PF Trader:

Hung out to dry!

TSCNYjjc:

In fact, I think I should write about that tonight, if you want to read more about it, check the site tomorrow.

PF Trader:

www.

Thestreet.com

Question:

I have noticed the recent down-trend in most "Internet" based stocks, do you see this as likely to continue?

TSCNYjjc:

The Net is very dynamic, but there are an awful lot of .coms and pretend .coms out there, I think that the approach that Henry Blodgett has taken, which is that you don't know who the real winners will be so you should have stakes in a couple of them, is right. That's how I have approached investing in them.

TSCNYjjc:

I know that if the investment bankers keep putting out so many .coms, people will lose interest in the group, however.

PF Trader:

Some of these new .com's are getting $10-100 million deals from the bankers!

TSCNYjjc:

Ouch!

PF Trader:

Sign me up for some of that action.

Question:

Dow 100,000 by the year 2025?

TSCNYjjc:

2025?? Heck, all I want to do is see 2025--who cares where the Dow will be!

PF Trader:

Too much caffeine!

Question:

What does the trading goddes think of this market?

TSCNYjjc:

She dropped by today. She thought that any weakness generated by the Fed would just be one more buying opportunity.

Question:

Jim, can Earthlink be a player along with ATHM, T and AOL?

TSCNYjjc:

Wow, that is rarefied company, I don't know if Earthlink belongs in that group.

Question:

Any thoughts on CPU going forward?

TSCNYjjc:

Ooh, that's a real bottom feeder. I am not sure what to do with that one. I have enough trouble owning Dell, what do I need with CPU!?

PF Trader:

Kind of like "what floats . . . . very small rocks"

Question:

What about Network Solutions-short and long term?

TSCNYjjc:

Very hard stock to own here and I don't want to be there.

Question:

Jim what do you see on the short side and what do you like in the 3-6 month range? Be specific please.

TSCNYjjc:

I am not inclined to be short here. I have a lot of cash, but I think the bond market is benign, and if it is benign, then I fear the short side will keep hurting you as it has for the last 18 years.

TSCNYjjc:

I have some small shorts, like KO, but nothing aggressive.

Question:

Hey JJC, as always a pleasure to listen to your comments. If May CPI comes in strong, do you see Fed hiking rates at the June Meeting? Or do you think that two months of strong CPI data is not enough to warrant such a move?

TSCNYjjc:

I definitely see the Fed hiking if May CPI is strong. Definitely.

Question:

Jim, what are your thoughts on HD?

TSCNYjjc:

Again, I think that HD is a great company and I was trying to buy some today. I think that is the premier growth vehicle in the segment. I am long Dayton Hudson which has also sold off and represents better value in my opinion.

Question:

Jim, why is yhoo so weak lately and your thoughts as a long-term core holding on it?

TSCNYjjc:

I think that Yahoo has made a series of acquisitions and is battling to adjust to them. I think it will take time.

Question:

What do you think about Amazon.com?

TSCNYjjc:

Same as Yahoo. Again, I see so many deals and so many acquisitions that it scares me.

Question:

What is the one stock you would buy today?

TSCNYjjc:

Again, my confidence level in Cisco has never been higher.

Question:

Mister Softee seems to be getting hit from all sides. Any thoughts?

TSCNYjjc:

I have a small position in the stock. It would be bigger is they would stop giving away $500 million every other day to beat this guy or trump that guy. It gets tiresome.

Question:

Jim, what would you consider a good price target to enter Cisco?

TSCNYjjc:

As Cisco is one of my faves, I am not that sensitive to price. I bought some more today during the Fed related sell-off.

PF Trader:

I'd add that CSCO is a monster in the long-term. Internet2 is coming and it will need all new routers. Home networking, wireless routing . . . .

Question:

We enjoy your articles on AOL, Jim. We live in Seattle and were wondering what you think about RNWK long-term?

TSCNYjjc:

Wow, thanks so much for the kudos. Real Networks has a secondary coming up and it might be an interesting spec when the deal is priced.

PF Trader:

So a few years from now when broadband is all over the place is RNWK done?

TSCNYjjc:

I cant write off any company that is as dynamic as RNWK this early. Companies keep reinventing themselves. just a few weeks ago people said AOL was dead because of T. Wrong! Companies move swiftly to address problems these days. they don't wear cement galoshes any more

Question:

Who would be friendlier to the stock kingdom---Bush or Gore?

TSCNYjjc:

That's a tough one. We know nothing about Bush and the market. The Clinton administration has been great for stocks. But who knows about Gore? I have no idea right now.

Question:

What is your outlook on Motorola? Will they finally turnaround?

TSCNYjjc:

I am long Motorola. This company has its act together now. I would use any Iridium-related weakness to buy more. Boy was iridium dumb!

Question:

Jim do you ever lose money? All we hear about is your winners!

TSCNYjjc:

I think this is a humorous question. You know why? because I have never seen anyone ever admit to having a loss in the market except me. I have been on national T.V. pulling my remaining hairs out because of my losses. Talk to those managers that have never lost money.

PF Trader:

Yeah, when was the last time Mr. Fund Manager said "we got killed on ___." Nope, does not happen.

Question:

What is causing the sharp retreat in the last two weeks of Johnson and Johnson?

TSCNYjjc:

I think that is strictly part of a rotation out of the drugs because of Medicare worries and because the economy worldwide is stronger. Also in JNJ's case the company benefits from a weak dollar and the dollar is on fire here.

PF Trader:

Let's finish up with a very common and important question-

Question:

Are penny stocks generally a bad idea?

TSCNYjjc:

Absolutely. I was just speaking to someone about some little penny stock, New York regional Rail today and I was telling him, don't mess with that kind of stock. They will cut your heart out. Those stocks are worse than gambling. You want to play for less than a dollar? go to the slots in Vegas or Atlantic city. It is a much better bet than most penny stocks. Stay away!

TSCNYjjc:

Many thanks David and many thanks to all who attended.

TSCNYjjc:

As always it was great fun. Thanks again.

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