James J. Cramer chatted on Yahoo! Thursday at 5 p.m. EDT. As with all chats, this transcript is unedited.
Welcome to today's chat with TheStreet.com's James J. Cramer!
Here he is!
Hi! Another amazing day and I am thrilled to be here!!
What are Mister Softee's prospects, near-term?
Mister Softee has more momentum right now than I can recall in some time. I have so many reasons right now to be long MSFT that I am bursting with enthusiasm for it.
Jim, What do you think of Iridium as a trading stock? Long or short?
Iridium is in a short squeeze mode right now. In other words, this is one of those situations where you cannot borrow the stock and people who are short it are panicking and buying the stock back because they cannot deliver it.
Jim, Someone you probably know said today that 'Fear of Disenfranchisement' is driving too many Net Strategies. Do you agree?
No, I don't think that. I think that most of the Net strategies I see are following a course very similar to Yahoo or Amazon or AOL, and those are winning courses if you execute well.
Jim, What do you think of oil service in the next 6 months?
I think these stocks look okay. They have had a big run and they tend to trade in spurts. I think you wait for a pullback before you commit big here, but that crude is going your way.
Short and long on Disney and @Home?
What is there to be long about with Disney. This is one of the worst managed companies I know. @Home is interesting but I like other Nets more.
What's your biggest fear in relation to any downside move?
As always, and I reiterate this constantly, the worries are the Fed and interest rates. Right now both are benign so the market is headed higher.
What are your thoughts on 3com?
3com is one of the most frustrating stocks I have ever seen and I would not commit capital to it. It just keeps disappointing and disappointing and, well, you get the picture
Who's your favorite storage software/technology company?
Look, I think Oracle, after having a huge amount of problems, is back bigger than ever. We had dinner with them this week and they have a great story to tell.
Do you see an overall summer correction coming?
We seem to have one every year. As I said yesterday on CNBC, I can't rule it out. You should get the Byron Wein piece -- he is the excellent Morgan Stanley Dean Witter strategist and read it. He talks about the perpetual weakness in July and August this week and I love it.
He nailed the topic. I fear that with the market and so many participants up so much that people will lock in gains come August and we could be in for some turbulence that will make you wish you were wearing seat-belts.
Where is AMZN going from here?
I think the stock seems to be in a short term up-trend but I am not involved in it. I think that this stock has periods where it gets the benefit of the doubt for the ghfs and periods where it is hated.
Right now it is getting the benefit. There is this guy who writes for TheStreet.com, Herb Greenberg, and last night (in a debate I had with him in preparation for our Fox News Channel show this weekend) he pinned me down on whether AMZN will ever make money. I finally gave in and said I didn't have a clue when it would turn profitable if ever. That's how I feel right now.
Got the nice T-shirt from TSC. Thanks. How about WCOM? It is dead or just resting?
I think WorldCom, which I sold today, is resting ahead of a very hard to understand quarter. There will be a lot of questions raised about it. And after the smoke clears I will buy it back.
Last night I was with Craig Ellis, from Orbitex, he is a super, super manager, and he tells me not to worry about the quarter, that it will be weaker but it will be explained away. If it will be weaker I will wait for that weakness and then pounce.
What small cap stock would you recommend for long term and why?
I cannot and will not recommend small caps in a public forum. In my own columns I use my Dad's private company because I am so afraid that I will influence the price of a stock. This is very important. There are people all over the country who are just waiting for me to mention a small cap stock and have it run and then blast me for moving my portfolio. I did this in 1995 and even though I did not sell a share I got investigated by the U.S. government. It was a horrible, horrible experience especially because I have never had a library fine, a speeding ticket, or a parking ticket. And -- get this -- never missed a day of school when I was growing up. I was mortified and embarrassed and it was the only time in my life that I contemplated suicide and I will never go back to that again. It caused tremendous grief for my family and for my wife whom I love very much and it is just not worth it. So forget it.
What are your thoughts on AOL's broadband initiative?
BORING!! This is the most boring story around. I am long AOL and I could care less. The broadband story is to AOL is like the AMD or NSM or Cyrix story is to Intel. It is a non-story created to scare you out of your AOL. And I won't be freaked out of it.
Opinion on Netbank(NTBK)?
I think that the Netbanking segment has the fewest barriers to entry of any part of ecommerce and I would not invest in it.
I think my strategy for the next few months will be to buy anything Paul Allen buys. Did you see what HSAC did over the last few weeks?
I am not a Paul Allen groupie. Actually, to be honest, I am kind of sick of hearing about his world domination plans.
What do you think about Whole Foods Market (WFMI)?
Great place to shop but I would not want to invest there.
What is your take on the reports that tobacco may be able to recoup fines through insurance protection. Will this bankrupt certain insurers?
I think that this is a canard. I read those stories. The insurers will never have to pay if bad faith was shown. Forget it. If you are banking on those kinds of things, you won't make any money with them.
Which are you 3 favorite stocks for the next 3 months?
Cisco, CMB, and Yahoo.
Jim, Are you a buyer of Intel at these levels?
I am long Intel and I did buy more today.
Do you like eBay?
Not at all. In fact, if it did not have 750 million in cash I would be short it. That said, do you know that every night I go there with my girls to put bids on Beanie Babies? We haven't won anything, but they have a great time.
Any thoughts on Gillette?
A great razor but I wouldn't want to invest there.
Jim, how is your portfolio allocated right now? What percentage is in cash, what percentage is long, short?
60% long, 38% cash, the rest short.
Why did Fidelity dump AOL?
To get to the others side. How the heck should I know? They do a lot of things up there that don't make sense to me.
Do you like Real Networks at this level?
No, but plenty of other people do. It is not my strong point up here.
Do you golf?
Nah. Except miniature. In fact I set up a little course to play with my girls. I am going to piss a lot of people off with this but I think the main reason people play golf is to get away from their spouse and kids. I am not perfect but I don't want to do that.
Any opinion on CNET's earnings?
I am long CNET and am trying to listen in to what my partner Michealangelo Berkowitz, the artist of earnings, is saying about CNET. We think they look fine. That guy is a little stiff though. Remember how you couldn't stand guys like that at college? Or was that just me?
Jim, do you think the drugs will turn around any time soon?
I think they just had a nice move. But you need to see some interest rate declines ahead before you can buy them aggressively. As I have written many times these stocks correlate very closely with bonds. Very closely.
Jim, what do you think of China.com?
I think it is an interesting spec but I like the major players better.
Do you think you'll ever move from Jersey for beautiful Westchester or Fairfield Counties?
Not a chance, although my sister is up in Chappaqua. But I like where I am in Jersey -- close to the office and close to my Dad in Philly. It suits me fine. Kids and cats like it too.
Is August '99 going to be as tough as previous years?
Spearman, I am worried that it will be. We are cruising along at 90 right now. I am worried that we could hit the retaining wall of August which is why I am 40% cash and short.
Would you own GE?
Hey BachelorDick, I will do you one better, I OWN GE!
Thoughts on the bond market? How is your long bond trade working or did you sell it?
I took profits into the Latin crisis. It wasn't a bad trade but it generated more angst than I prefer. I think the big bond move in either direction might be over for now. If it helps, I just locked in a mortgage.
Do you think GoTo.Com will change the search engine world?
No. I think it will make some people some money though. It is a wicked trader isn't it?
Jim, what do you think about the e-business to business area, is it really the holy grail of e-commerce?
I think it is already the most cliched and boring aspect of the dot-coms. I don't like it as a theme. It reminds me of Y2K as a theme last year. A yawner by now.
If Intel is signaling good times, why are so many tech and Net names red?
You better get a new screen, new eyeglasses or better stocks jviet!!
What IPOs do you like?
Of the recent ones I like Brocade, Juniper and Redback but am only long Juniper. If those others come down for a day I will get on. Oh heck, even if they don't I will buy some. I have a weakness for that kind of candy.
With Apple Computers earnings looking good and new products to be announced this coming Wed., would AAPL look good to you?
AAPL is not where it is at. You sound like that guy Renay San Miguel from CNBC, he is always talking about AAPL. Move on matie!
What effect do you think Infoseek will have on Disney's stock?
Ah, a New World symphony man. My take is it will have no affect because this stock is deeply allied with Michael Eisner. I think the bio-techs are going to be fine as long as interest rates stay stable.
I was very mad at myself for not being in Amgen or Biogen this week -- both are very solid companies and I will look to buy them on a pullback. I know that sounds weasely, but after these moves I can't really just plunge in.
How bout them Baby bells? Most are breaking new highs -- justified?
YES and YES and YES. In fact, I love Bell Atlantic and want to build a major position in the name. I can't believe the hubbub over US Worst. Which is the worst one of the RBOCs.
Whatcha think about steel stocks right now?
Great to build bridges with but I don't want to invest in them.
Besides Nokia, what are your favorite wireless plays?
I like Nokia best. I sold my MOT but I think that it is doing well too.
Are Internet stocks done going so high?
No, I don't think so. I think the Internet is alive and well. I see opportunities in the sector everyday.
Any thoughts on AMGEN?
Yeah, I wish I were long it. Right before it reported, I heard so many rumors that it might miss because so much of its business is paid for by the U.S. government, but that was wrong, wrong, wrong and I missed a great trade.
Is Bloomberg better CNBC?
Lynch-man, what are you smoking? Bloomberg TV is like watching a magazine.
What's planned for the Fox TV show?
Oh man, this show is rocking, I have been involved in a bunch of rehearsals. I wish I could tell you I am the star of the show, but there are these two guys, Adam Lashinksy and Gary B. Smith (Gary B. for the intiated), and they are so strong that I asked to be taken out of a segment to give them more time. The segment's a fascinating "chartman versus fundamental" thing they have going. I showed my wife last night and she asked me to rerun it she thought it was so good. It was positively crackling. Herb Greenberg and Brenda Buttner are there too, and Dave Kansas. This show will impact stocks. BIG. I think it would be a mistake to trade and not watch it. Before you think I am just doing some hype, be aware I have seen the rehearsals. It is all about making money in the market. We don't do any of that free-pass garbage to managers and we grill them. We don't just say what stocks are good. We put the hammer to the baddies.
Do you keep track of the consumer electronics retail industry?
Only in so far as to kick myself for letting go of BBY at $65!
Do you think AT&T can handle broadband business?
NearBeer, don't worry about it. Yes.
Do you think JCPenney's is doomed to Chapter 7?
I don't think they will even make it to chapter 6. (LOL)
Jim, what do you think of Waste Management (WMI)?
I didn't like the restatement and that seems to be a no growth industry. I think there are better garbage heaps to pick from.
JMED is on a nice run, is it topped out?
I really don't know that one and have to pass.
Your outlook on Knight-Trimark?
Holy cow, what a hot potato for me. The other day I mentioned on the TheStreet.com that people were buying puts on it. When I asked the brokers why people were they said that they heard there would be a negative Barrons article. I wrote that up as an example of the garbage people trade off of and I was hanged in effigy in the Yahoo! chat site for NITE. That is ridiculous. NITE right now is the dominant firm in OTC trading and I would think you had to be nuts to short it with the momentum it has now. As for the people who wanted to lynch me because I reported what I heard, I say, hey buddies, there are some real bad guys out there and I am not one of them.
Why do you dislike Toys'R'Us (TOY)?
Irish Salsa -- great combo -- I dislike it because it is one of the worst places on earth to shop. Let me tell you a quick story. About ten years ago I wrote an article saying I thought Home Depot might have been tapped out. It was in an obscure journal, I didn't think anybody read. A few days later I got a personal letter from the chairman telling me why I was wrong and that I should go visit a bunch of stores. I did and I had one of my greatest hits ever for about 8 years. In fact, I still trade it exclusively to the long side. Now I have a huge audience and I have written several times that these places are the dirtiest crummiest places to shop and I have heard nothing from those guys. Guess they think so too.
CPQ or DELL ?
Why not both?
What do you see in First Union's future?
I see big mountains, big oceans. Oh, the crystal ball has gone black. Sell.
What are your feelings on Time Warner?
I was bidding for it all day. People were freaked out about these two movie guys who quit. I am not part of that world. I am part of the world that is Gerald Levin's world, the world of making money for my partners. That guy is a real winner. I am buying it tomorrow. This company no long tolerates under-performance.
What about the chip guys i.e. Novellus?
I am long Novellus. I wrote a piece about it today saying that I think the story there is very intact. In fact I think it could move up substantially from here.
Thoughts on Ford?
I sold my Ford today into the rumor that they were going to spin off their parts segment. I have to tell you that F's q wasn't so hot. I think Ford is okay but GM is better.
Do you talk to former classmate Steve Ballmer anymore?
You know I used to talk to him a great deal and he was my business manager when I was President of The Harvard Crimson in 1976. We also shared a summer apartment together. We stayed in touch for a long time but have been out of touch these last few years. I have always loved his take-no-prisoners attitude which he had when we were at college. In fact, it was my attitude too. He is a good man.
Speaking of entertainment companies, what do you think of Pixar?
Why, skipper, do you have to mess with Pixar? That one is too hard.
What stocks are you unwilling to discuss right now?
Ah, you are a clever, clever man but I will not fall into your well-laid trap.
What are your thoughts on the Fed and inflation?
Love it; hate it.
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What sector looks good now?
I continue to love the telco tech infrastructure sector. I know I should be sick of it now, but it is the best I have. I like semis too.
E*Trade, is it a good buy?
I think E*Trade has a great plan. You should read the Fortune magazine article about the president's desire for world domination. He is my kind of guy.
Don't you think that the proliferation of free ISPs will hurt AOL?
Robuzo, I think thermonuclear war will hurt AOL too. I can't worry about this stuff as it has already cost me millions in lost profits because I have. I have heard all of the negative sirens for AOL and I won't be spooked by them.
Which is better -- purchasing stock outright or by an option?
One has a gun to your head (option) and the other doesn't.
Do you believe the ASP trend is just starting?
I think you should go right now to the site and read Jim Seymour's piece about this. Look, I have to be honest. I am a homer for the site. But this guy Jim Seymour, he is worth $100 a year, Heck he is worth $100 a day. He explains this stuff better than anyone. You have to read him. I will say this once: If you don't read him, you will lose money to those who do!
Where are you on AWRE given Jim Seymour's input?
Very interesting. I had a huge hit in this and then I got out. And I came down and we wanted to buy it. But because I had gotten into it from Seymour's writings and not
unrecorded I failed to buy it back. I saw it smoking today and I wanted to get back in. I understand that business is very strong there.
Do you expect an expiration related short squeeze tomorrow?
Hey Billy how have you been? I think the chance for a squeeze ended today. It would have been related to the SPX expiration that happens tomorrow morning. I no longer fear one.
Why do you have a law degree and not an MBA?
'Cause my sister went to law school and said that after the first year you could have a great time and yet still be respected. Boy was she right. Law school is without a doubt two and a half years of some of the greatest socializing and partying I have ever seen and one semester of mock intensity. I traded everyday in law school, every day. It was a paradise for a trader because the classes were moronic. When they called on me I used to just say pass until one day day my civil procedure teacher told me we weren't playing bridge. After that I just cut class.
How about Ugly Duckling? Very few analysts have chimed in. Do you have a take?
I will chime in sports writer. I would rather bet on sports than on ugly duckling and I don't gamble.
I hear Jack the Bartender is interested in CLEC's. What do you think?
Don't know Jack.
Jim, your thoughts on FDX?
I was looking to pick some up as Helene Meisler in her column today said it was oversold, but then I lost track of it when U pre-announced.
Do you see crude oil having an effect on the long bond if Crude gets over 21 a barrel?
Yes absolutely. In fact that is about the only bona fide worry out there right now.
Do you think KOOP has a half chance of doing anything? I mean, who is going to use a site like this, advertisers? Certainly not real people taking it seriously.
Cindy, you sound like a short-seller of Koop. I would cover. This sector has a lot of momentum.
What are your thoughts on NDB?
Wow, these guys have gotten good. In the interests of disclosure we (TSCM) just signed a deal with them. I did not know about the deal until today though as I don't get involved in those.
What's the biggest key to your trading success?
Do you think STMP has a unique enough business model to stand up to PTB?
I don't think so, but that cost me heavily today.
Jimbo, still like GP down 2 today?
Yeah, these guys are okay.
Cramer, I need a good growth stock.
YoungBuffett, if Buffett were to start all over again he would be buying TYCO I think.
Lisa, and all of the Yahoo folks, I had the best time. I am hoping, maybe, that we can do a spot chat after one of the Fox shows so that you can ask questions right on the spot that the show provokes, because it will. I did not rehearse this with my buddy Lisa who runs these things, but I bet she takes the bait!! Thanks all!
She took the bait -- we'd love to do it anytime! See you then!