James Cramer on AOL

The trader's latest chat.
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James Cramer chatted on AOL March 30 at 5 p.m. EST.

PF Trader:

Welcome everyone to the latest TheStreet.com chat series. We welcome back Jim Cramer - hey Jim!

TSCNYjjc:

Let's rock! I am ready to roll

Question:

Any thoughts on YHOO's big reversal today?

TSCNYjjc:

Wow, that one is close to home. I can't say I was thrilled about it. But this is a volatile stock and I have come to expect those moves. I think that Yahoo is a terrific, terrific story and I remain long it.

Question:

Are you still long eBay, or is it too dangerous to own it now that AMZN is a competitor?

TSCNYjjc:

Another one right in the kisser. Yeah, I am long eBay and I am buying it, even today. I think eBay is a long term winner and I am not as confident as Bezos about just taking that market by storm. People love their eBay -- just love it.

Question:

Are you still bullish on the Telco's and how do you play WCOM?

TSCNYjjc:

Yes, I love the telco-techs. Holy cow, does someone there have my position sheets. WCOM is my premier telco play with T being the second best. Both are strong 1999 performers I believe.

Question:

Do you like QWST at this level?

TSCNYjjc:

I am still long QWEST. Here I take my cue from Jim Seymour who writes quite eloquently, and positively about QWST in TheStreet.com's site.

Question:

What about IBI and HD?

TSCNYjjc:

IBI is not one of my favorites and I thought its fashion show was quite shameless. I could not own that stock and come home without my wife castigating me and she was furious about the show. HD is terrific and while I am not long it currently I would use weakness to buy it. I love Home Depot Expo too!

Question:

Is MRK a buy for a short term bounce?

TSCNYjjc:

I hope so, I am long it, going into the VIOXX meeting in the fourth week of April.

Question:

Are you buying NOKa on this record price break out?

TSCNYjjc:

I wish I were. I booted my Nokia last Friday thinking that it had too much of a run. Looks like I am wrong right now though and I hope it comes back. These guys are dominating right now.

Question:

BRCM has been quiet lately, is anything wrong with it at these levels, or do the earnings have to catch up to the stock price?

TSCNYjjc:

I have taken my profits in Broadcom. It has had a huge run, but I would not hesitate to get back in. As I have been saying often on TheStreet.com I have been raising cash and this was one of the names I raised cash with, as was Nokia.

Question:

Do you always trade or do you sometimes find a newer company and position early to take advantage of the ramp of the early years of revenue growth?

TSCNYjjc:

I am always looking for stuff that I don't have to trade but I find that things are so volatile that I don't want to be too greedy on some of these incredible moves. I do believe that there are lots of longer term Net opportunities that I would like to sock in if the Net got socked, for instance, but up here I only have tag-ends of stocks.

Question:

What are your thoughts on Disney? Near term and long term?

TSCNYjjc:

I would have thought Disney would have been doing better as I think that this stock is about to have much easier comparisons. That said it acts terribly and I am not long it right now.

Question:

Where will the Dow end up end of 1999?

TSCNYjjc:

I would not be surprised if the Dow didn't end up at about 10,500 or a little higher. It seems like inflation remains under control and rates can stay low. That said, I worry that there will be a late summer sell-off like last year and I want to be ready.

Question:

Does AOL's high market cap bother you?

TSCNYjjc:

First of all, I remember people telling me to short. MRK aggressively when it had a $35 billion market cap in the 1980s. That's a fools game. I think that the market may, at given times, tend to want to revalue whole industries and I don't want to second-guess that process by focusing on market cap. In other words I am not deterred. I have sold some AOL, as a discipline but it remains a core position.

Question:

What's your thinking on Japan? Will the market hold after tomorrow? Or will the end of the fiscal year bring an end of the party?

TSCNYjjc:

We are honored to have the Reuters man from Japan on the chat and I will always, always defer to him. Andrew, I am long MBK and some Nikkei calls but I am looking for a quick pullback and then another ramp up to 18,000.

Question:

Many of us have become enamored of fiber-light and its major support company: UNPH. Have you found this huge growth company as compared to a young CSCO? ..trenchrat

TSCNYjjc:

I blew the UNPH. I owned it for about ten points and then got spooked out because it moved so much. I swapped into GLW (Corning) which was cheaper, but UNPH has been an incredible performer and I bet it keeps going up without me. (Thanks Mr. Gordon for reading us as much as you do!)

Question:

Jim, great job at TheStreet.com! You've previously written on the telco-techs and they seem to be doing well (strong charts). Any comment on TLAB or CSCO in particular ? Thanks.

TSCNYjjc:

These are both core holdings of mine and I think they are having excellent quarters. When I speak of telco tech, I am talking about these kinds of companies and these two in particular are two of my faves. You know I don¿t tout stocks on the site because I am trying to educate and inform, not get you to buy any specific names. These are good ones in my opinion.

Question:

What do you think of the rally in oil service and drillers? Will it continue?

TSCNYjjc:

I think these stocks are okay. I don't think that there is that much upside, but there is very little downside. I have some exposure to the group but not much.

Question:

Do you see GBLX with its pending merger with FRO as a viable threat to T down the road?

TSCNYjjc:

I think the T story is a multi-year story and I think it will be a strong performer later in this year. Actually, I have written quite recently that I was surprised it has been so weak, but the fundamentals are in tact.

Question:

Where's CPQ headed?

TSCNYjjc:

Nowhere in particular.

Question:

How do you like DLCK?

TSCNYjjc:

Doubleclick is part of a small basket I have put together of Net names that I like and buy on weakness like today. This is a very well run company and I speak both as a shareholder and as a board member of a client, TheStreet.com.

Question:

What are your thoughts on GNET?

TSCNYjjc:

Oh, talk about another where I scalped ten points and left 100 on the table. Ouch!

Question:

Is now the time to buy Dell?

TSCNYjjc:

Here is one of the most controversial difficult stocks to bet for or against right now I think. I want to own Dell because it has been so great. But the last quarter was a bit sloppy and I have cut back drastically on the personal computer stocks. I have virtually no exposure to the group save some INTC and some MSFT.

Question:

Do you think ATHM is a winner?

TSCNYjjc:

There goes another name in the basket. I think that ATHM is another long term winner and I own some of it. I guess I sound like a net mutual fund, but I like these stocks and think they will do well.

Question:

Your opinion on PSFT as a possible takeover target?

TSCNYjjc:

I don't like to buy stocks with bad fundamentals and hope for a takeout. This stock has bad fundamentals and I don't want to be there.

Question:

Is WCOM and SUNW overextended?

TSCNYjjc:

I trimmed my SUNW for that very reason at $120 and feel like a real jerk (Hah, detractors, I know, I am a jerk) but I am not selling my wcom because I think it has great momentum and I don't want to leave another winner on the table.

Question:

Will the end of "window dressing" by mutual fund managers cause any cooling off in any sectors come April fools day?

TSCNYjjc:

This is a terrific question. I am always afraid that the last day of the quarter in the last few years have been terrible, and I want to be in a position to buy. Again, I have raised cash and I want to re-deploy that cash at lower levels. I think tomorrow could be tough and the real buying wont come till next week.

Question:

Will there be any problems with the CA acquisition of PLAT?

TSCNYjjc:

I don't think so. The street really loves this merger. I didn't think it was that great a deal but the whole street loved it, just loved it.

Question:

What do you think about the PC manufacturing sector? Is the correction overdone?

TSCNYjjc:

No this group is not so great right now. In fact I would say that it is very tough to own this group for several months and I suspect I wont be over-weighted in them until the back to school season. Also I think the cheaper PCs are hurting the stocks and the PC giveaways are confusing people. Tough tough market that I don't want to be in.

Question:

Can the market hold at these levels w/o a general pullback and consolidation?

TSCNYjjc:

Yes, I think the general market is okay. Again, I am looking for a several percentage pullback but some sharper moves on individual stocks and I want to be ready. The breadth is not so hot, and I can't love the market with so many companies not doing that well.

Question:

If you were to buy one High tech stock what would it be?

TSCNYjjc:

Okay, here is what I want to do with that question. Tech is simply too big a term. I like the Net (AOL) and telco tech (CSCO) and hardware (INTC) and software (MSFT) and these are very different markets.

Question:

Isn't all the bad news out on WLA? Aren't they also going to get a co-marketing drug from PFE?

TSCNYjjc:

I don't think this WLA is going anywhere. The Rezulin thing is still hanging over them. If you like PFE. buy PFE, not WLA

Question:

Do you like Wal-Mart at this point?

TSCNYjjc:

I think WALMART is a great company but I don't own it at this moment as it just moved up a great deal. I do believe that this is a great company, but I own Kohls and Dayton Hudson and that is enough retail for me.

Question:

Are you still bullish on bank stocks and what do you think of BAC and USB long term?

TSCNYjjc:

I think the bank stocks are great stocks and I think BAC is excellent, although I am not a big fan of USB. My favorite is chase which has good earnings and a terrific balance sheet and lots of power to buyback shares.

Question:

Jim, CPU was a prime take-over target a few months back at 17@ share! Do you feel they are still a prime target for either staples or Office-Max down here at these levels?

TSCNYjjc:

I never thought that CPU was a takeover target, prime or otherwise. I think that's a bogus rap that you are coming with. and I wouldn't buy into it.

Question:

Your thoughts on Citrix Systems? This stock has eluded me for two years now. I am not the axe in this name. What a well-run company though.

Question:

Jim, what are your thoughts on MO? Any price at which it looks attractive? TheStreet.com is great!

TSCNYjjc:

First, thanks for the TheStreet.com kudos. I don't like MO at all. First, they pay billions in litigation costs, and it bought them no immunity at all (they just lost another today.) Second, there is a definite loss of momentum in MO's businesses. I think this is NOT a good story.

Question:

Jim is it too late to go long on GE?

TSCNYjjc:

I don't own any GE right now, as this is one of those stocks I trimmed back to raise cash. But I will be all over it if it were to drop to the low 100s. I think this is one of the best run companies in the world

Question:

Jim, What is your long term outlook on AMGN and also LCOs ? Thanks

TSCNYjjc:

AMGN seems like a real winner and I think that it is doing a great job. Lycos -- I dont know, I have written many times that I thought the deal with Diller was a bad year one and the market agrees with me.

Question:

You wrote in TheStreet.com today about Time Warner. Is that stock still buyable?

TSCNYjjc:

I think TWX is buyable. I do not own it right now but I should have bought it when it got hit last week. This stock is firing on all cylinders and I think I have been too aggressive in selling it.

Question:

Jim, Do you see a summer slowdown for techs?

TSCNYjjc:

Yes I do. I see a number of threats to personal computers including a summer slowdown, the sub $1000 PC and worst of all, companies that give away PCs! And many of these factors will loom large this summer

Question:

Will Microsoft settle up the anti trust case? Also, do you see that stock taking a dip downward?

TSCNYjjc:

I think that MSFT is doing very well and I would bet that they settle for something that won't be so bad.

Question:

Mr. Cramer, what is your opinion of RAIN (Rainforest cafe), specifically the management and is a management led buyout possible at these levels? Is the leveraged market there for this to happen at this time for this company? Thank You.

TSCNYjjc:

I think the restaurant biz is very, very tough and I wouldn't bet on a takeout or an improvement in price. Did you see Planet Hollywood? Another loser. These stocks are dangerous.

Question:

What do you think of NOVL?

TSCNYjjc:

I think that I was a moron to sell it at $13 and I have to say that this team that runs Novell is really. really excellent and I will buy this stock on weakness.

Question:

Do you still expect interest rates to be down by the end of the year?

TSCNYjjc:

I think rates will be exactly where they are right now. I think they are the least of the market's problems.

PF Trader:

Thanks once again for talking stocks with us today Jim! Excellent as usual.

TSCNYjjc:

David, this was terrific, and I thank everybody for coming. You know, one thing I want to emphasize, throughout this run in AOL. There have been people who have doubted it and told me that it wont work, or that it will be outmoded or that it will be supplanted and they were WRONG! And one of the reasons they were wrong is that they misjudged the people who work at AOL, and how good and forward thinking they are and I hope it always stays that way. Thanks guys!

PF Trader:

Thanks Jim!

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