Keep It to Yourself - TheStreet

Keep It to Yourself

Thinking of buying a tech turnaround? Remember, they are a sucker's game.
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You want to buy a tech turnaround? Keep the idea to yourself. A few months ago, I was slamming the idea of buying "Silly Graphics," the quick and dirty name we all call

Silicon Graphics

(SGI)

.

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Someone had given me some break-up value analysis that indicated that Silly, at 13, was dramatically undervalued. I guess now it is

super-dedupermega

undervalued now.

Maxi-undervalued

?

Same thing with

Compaq

(CPQ)

. Lotta guys telling me to look at Compaq. Oh man, why? Because maybe they get it together?

Computer companies sometimes come back. I made some good money on a

Data General

turnaround. Caught a double. Periodically I played

Sequent

for a turnaround and made a few sawbucks. Made a few with

Lotus

; lost a few with

Ashton Tate

. Made a few with

Seagate

(SEG)

and

Western Digital

(WDC) - Get Report

; lost it all in

Maxtor

(MXTR)

,

Miniscribe

(MINY)

and

Micropolis

.

Tech turnarounds are a sucker's game. It is very, very difficult for a tech company that is not

IBM

(IBM) - Get Report

to recruit the great people necessary to turn the darn things around. Talented people leave. Tech mergers tend not to work so people can't speculate on a large bid.

Sure,

Novell

(NOVL)

went from 7 to whatever. And yes, there are some hardware companies that will resurface as great buys. But the lesson of Silly Graphics is, don't even think about it. Don't waste your time. There are better fish to fry.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. 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.