March 25, 26: Guest Graham Tanaka

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Participants on March 25 included host Brenda Buttner, James Cramer, Herb Greenberg, Adam Lashinsky, Gary B. Smith, Dagen McDowell and guest Graham Tanaka. The transcript is unedited, and phonetic spellings are indicated with (ph).

BRENDA BUTTNER, HOST:

Hi, everyone, I'm Brenda Buttner, and you are connected to "TheStreet.com." We're here to help you make smart decisions in the stock market.

And it was another strong week for that market. What should we expect next? Let's get the Word on TheStreet.

With us from

TheStreet.com

Web site, Jim Cramer, who also manages the

Cramer Berkowitz

hedge fund, Senior Columnist Herb Greenberg, also Senior Writer Dagen McDowell. And in San Francisco, our Silicon Valley columnist, Adam Lashinsky. Plus Graham Tanaka, manager of the

Tanaka Growth

fund. Graham's fund is up nearly 30% so far this year.

First topic, making money, what else? If you've invested in this market for the last few years, it's been hard not to do just that. Get this. If you took $10 grand at the beginning of 1997 and put it in stocks or funds that mirrored the

Dow

, right now you'd have over $17,000. Of course, that's nothing compared to if you went the tech route. Ten grand in the

Nasdaq

back then gives you over $38,000 today.

But those are paper profits until you do something with them. In today's market mania, the question is, do you keep riding this wave, or is it time to protect some of your profits?

Jim, how do you stay in the game and still take some off the table? What's the best way?

JIM CRAMER, THESTREET.COM:

OK, Brenda, I have been doing a series of articles over the last four weeks, because I think that the market has gone very far very fast, urging people, take something off the table. My bona fide's in this bull market, I love this market starting in 1981, they are prove it (ph). But I'm telling you, if you haven't taken something off, you're a pig. Pigs get slaughtered.

BUTTNER:

But you believe in the market, though.

CRAMER:

It doesn't matter. It's time for people who've been letting it ride. I get a lot of -- I get -- I got an email from a woman, Laurette (ph), today, said, "Listen, I read your column. We went from $500,000 to $2 million. I love you; I'm fully in." And I just said, "You don't love me if you're fully in."

BUTTNER:

Right. Graham, you have a totally different philosophy. You've held

Intel

since when, since it was, like ...

GRAHAM TANAKA, TANAKA GROWTH FUND:

Twelve, 13 years ago. Our cost is less than a dollar. We have a number of stocks like that. We like to buy and hold for the long term. So we sort of have a different view from you.

HERB GREENBERG, SENIOR COLUMNIST:

So you're saying, you're saying, you don't take anything off the table?

(CROSSTALK)

TANAKA:

Oh, no, we do, yes, we do.

GREENBERG:

All right, so ...

TANAKA:

I mean, from a portfolio-managing point of view in terms of responsibility, you really have to trim and take some gains.

DAGEN McDOWELL, SENIOR WRITER:

But as a practical -- right. As a practical matter, you should be taking some money out of the market if you're going to need that cash in the next couple years to, say, buy a home, put your kid through school, you know.

BUTTNER:

Oh, of course, of course. But isn't this kind of like market-timing, Adam?

ADAM LASHINSKY, SILICON VALLEY COLUMNIST:

Well, I was going to say, Jim, what I think would be helpful, tell us the difference between ...

(CROSSTALK)

BUTTNER:

Hold on, we'll get to you.

LASHINSKY:

... What you do -- you're a trader, and so you're putting all your money at work all the time. It's not really taking money off the table, but people should be figuring out what they want to do with all their money. And we don't want to suggest that everybody wants all their money in their market all the time. Am I right?

CRAMER:

Yes. Well, I'm, I'm actually going on two different assumptions, Adam. One is, is that there -- I'm looking at the margin debt, and I'm saying, people are way too leveraged given how much the market's gone up. And second, I look at what I do personally. I have taken money off the table. I like to have my column and what I say on TV be in reality what I do in life. And I've taken some money off the table. I can't look at people who are fully invested and say, Listen, I'm fully invested with you.

GREENBERG:

All right. But it's one thing to say take money off the table. Then people start saying, OK, but how much should I take off the table? You know, that's a ...

McDOWELL:

And when do you put it back in?

GREENBERG:

Well, that's the other ...

(CROSSTALK)

CRAMER:

... I would give it to Graham. Fabulous record, 401(k), IRA, I'm not talking about taking money off the table there. That's long term, and it's meant to be. I'm talking about the people who really press the, you know, pedal right down to the ...

BUTTNER:

How do you know which stocks to sell, though? Where do you take the money?

CRAMER:

I think you take something off that you've had home runs. Now, I understand your Intel cost basis. But, you know, you're ...

(CROSSTALK)

CRAMER:

... my long-term component.

TANAKA:

I hate to admit it, we've trimmed some Intel over the years. Not much, fortunately. But it's compounded earnings at 42% a year the last 10 years, the same as

Microsoft

. People don't realize that. You find a winner like that that compounds like that, the power of compound is working in your favor.

Having said that, if the stock becomes, you know, two-thirds or a half or a 30-year portfolio, you got to start taking ...

(CROSSTALK)

TANAKA:

... that's what we're talking about.

CRAMER:

Exactly right.

GREENBERG:

Yes, it doesn't work in your favor at this level, though. That's the other thing. You start worrying. If even -- you're talking about a 401(k) plan or an IRA, and you're still looking at this -- the growth of these numbers, and it's still going to start to cause some panic ...

(CROSSTALK)

McDOWELL:

Or unless you retire in, like, 2040, I mean ...

(CROSSTALK)

CRAMER:

But there should be no timing, there should be no timing when it comes to 401(k) or IRA. I'm not speaking about that. That's to be let run. That's retirement money, long-term perspective, long-term common stocks have done the best. That's not what I'm talking about. I'm talking about the discretionary money that you're pressing and pressing and pressing, doing the

Aribas

, the

Commerce Ones

, and you're just up and up and up. I don't want you to ...

(CROSSTALK)

CRAMER:

... give it all back.

LASHINSKY:

... your daytrader buddies.

CRAMER:

Not my ...

(CROSSTALK)

BUTTNER:

Adam, get in there.

LASHINSKY:

Let's remember the very sophisticated principle of being able to sleep at night.

(CROSSTALK)

LASHINSKY:

People should be approaching the stock market the same way tech investors should be approaching the tech stock market. You want to have enough where you, where you can make money, but not too much that you can't sleep.

(CROSSTALK)

BUTTNER:

Jim and Graham, did this week feel a little bit different to you? There were a lot of ways to win. It used to be tech, tech, tech. You could win with banks this week, with brokers.

TANAKA:

Right. But it was a very tricky week, because you had people going into the blue-chips, the Old Economy stocks, and now they're new, and then they went back into the New Economy stocks, the techs ran. Now they corrected a little bit. And then you had the Internet stocks running.

It was a very tricky week. This is actually very unusual.

CRAMER:

But three stocks I'll talk about that I'm long,

Chase Manhattan

,

Goldman Sachs

, and

General Electric

. These are not B2B, these are not B2C, these are not dot-coms. These are very well-run companies that turn out to be undervalued in the marketplace that had very big moves.

What I'm saying is, is, you don't have to be a rocket scientist, which is what you have to be for a little while, to make money. There are good household days (ph) that were overlooked. It turned out to have acceleration here.

McDOWELL:

Well, even, like, the big tech stocks had it really well when the Nasdaq took a dive earlier in the week.

CRAMER:

Intel and

Cisco Systems

.

McDOWELL:

Cisco, yes.

GREENBERG:

Well, you ended up, you ended up buying GE after the fall, did you not? Or did you ...

(CROSSTALK)

CRAMER:

Yes. ...

TANAKA:

But he's got, he's actually got an Internet initiative.

CRAMER:

He -- he -- he ...

(CROSSTALK)

CRAMER:

... he's running his whole, he's got a whole operation ...

(CROSSTALK)

BUTTNER:

All right, that's the Word on TheStreet, Graham Tanaka from the Tanaka Growth fund, thank you.

Jim, it's almost time for Ask Cramer. Are you ready?

CRAMER:

Hit me.

BUTTNER:

All right, we will, we will.

CRAMER:

Hit me again.

BUTTNER:

But up next, we look at a biotech that turned into a biorat. Is that stock a bargain now? We'll find out what the Chartman has to say next on "TheStreet.com."

BUTTNER:

Welcome back.

You know, when a stock tanks, sometimes it's a buying opportunity, and sometimes it just means there's more bad news ahead. But how do you know?

Let's ask the Chartman. Gary B. Smith trades for a living from his home using the charting method, though he prefers to call it technical analysis. Gary joins us from Washington., D.C., and here to look at the nuts and bolts of the same companies, our Silicon Valley columnist, Adam Lashinsky.

Gary and Adam do not own any of the stocks in this segment.

First up, biotech company

Aviron

, which specializes in vaccines. The stock got cut in half recently. It's come back a bit but still has a long way to go to old highs. Gary, what's the chart say?

GARY B. SMITH, CHARTMAN:

Well, here is a -- this is a great example of waiting for the exact right moment to make a great trade. As you mentioned, Brenda, this stock just got cratered like the rest of the biotech. But here's the thing, it's come all the way back to its breakout point, so right now is the time; if you want to buy one of these high flyers like Aviron, now is the time to do it.

So it's a clear case of high reward, low risk. One of those stocks, I love it at, say, 31, I hated it at, say, 27. So if you want to make a good trade, maybe not a good investment, Adam would know more about that, but a good trade, now is the time to buy Aviron.

BUTTNER:

Well, Adam, let's address that. It has had a steep slide, but if you care about valuation, the stock still ain't cheap. Do the fundamentals say buy as the chart does?

LASHINSKY:

The fundamentals will almost never tell you what to do with a biotech stock like this that doesn't have a product that they're selling. By the way, Gary, just looking at your chart, it looked like the breakout point to me is $15 ...

SMITH:

(OFF-MIKE)

LASHINSKY:

... but, you know, what do ...

SMITH:

... don't dip your hand in my inkwell ...

LASHINSKY:

... what do I know?

SMITH:

... all right?

LASHINSKY:

You got to root for a company that's making a flu vaccine, especially one that's sprayable. I think the -- what you saw toward -- with the stock running up toward the end of the week, however, is that they're on a road show to sell a secondary stock offering. They're telling a good story, so the stock typically moves up a little bit during that time.

However, this company's profits are at the mercy of

Food and Drug Administration

approval for their product, which they're not even seeking until the fourth quarter of this year. That means profits will come not in this coming cold and flu season, but the next coming cold and flu season, if all goes well.

BUTTNER:

All right, next stock, Gary,

MicroStrategy

. Stock made headlines this week when it cratered on negative earnings news. But if you bought at the bottom, you would have doubled your money. Is it still a buy?

SMITH:

Well, I tell you, this is a great, great example of one of my hometown favorites. You know, MicroStrategy is right here in the D.C. area. I know people that work for MicroStrategy. I felt badly when the stock cratered like it did. I want MicroStrategy to do well.

Here's the problem. When a stock crashes like MicroStrategy did, yes, sometimes you get a dead cat bounce. Who knows, maybe at the end of the week, it was a little bit more than a dead cat bounce. As you said, the thing doubled because its volatility is off the charts.

But here's the thing. I still don't think this is a good time to buy MicroStrategy. I do not see the stock shooting back from 60 all the way back up to 220. In fact, I think it's got a better shot at seeing 30 from here than it does back up to its previous levels. I would avoid MicroStrategy right now. I want it to do well for the long term. I think for the short term, this has more downside.

BUTTNER:

All right, Adam, the stock's certainly having a lot of ups and downs, but the actual company, you do like it, don't you?

LASHINSKY:

Yes, I would almost always say when a company has an accounting disaster like this that you just should sit around and wait for the next accounting disaster. But what we saw with the stock moving up almost immediately is that this is, and this was and is, a good software company. MicroStrategy's doing good stuff.

The -- it actually will have a better outlook going forward after the accounting revision. The cash flow stays the same, only now the company can see what its future looks like better.

Finally, MicroStrategy has a spinoff in the works called Strategy.com. It's the future of this company. They're investing heavily in it. There's really a lot of good stuff to say about this company.

BUTTNER:

All right, Gary and Adam, thanks, as always. Don't go away, though. We need you and your predictions in a few minutes.

But right after this, buy, sell, he's not afraid to tell you. Get ready to Ask Cramer, up next.

BUTTNER:

Welcome back. You've got a favorite stock, he's got an opinion, I guarantee it. So it's time to Ask Cramer.

That's right, Cramer is back, and he's rarin' to go with his bottom line on the stocks that you are asking about.

All right, let's see how many we can get through today. Let's go straight to the phones. Bob from New Jersey, hello, what's your stock?

CALLER:

Apple Computer

.

CRAMER:

You're a smart (ph) man, Bob, that's the right stock. I can't believe I didn't -- I can't believe I didn't buy the pullback this morning. Stay long.

BUTTNER:

OK, Steve in New Hampshire, how about you?

CALLER:

Jim,

NBC Internet

.

CRAMER:

No. Interesting, but no earnings. You got to stick with

Yahoo!

or

America Online

, two that I'm long.

BUTTNER:

You like AOL.

CRAMER:

Oh, terrific, terrific. Made a big comeback this week.

BUTTNER:

OK, Michael in California.

CALLER:

Yes, hi, you're long and short on

E*Trade

.

CRAMER:

E*Trade, stock moved up 3 points just on Friday. I think that maybe E*Trade is about to have, along with that whole cohort, because I saw some really good numbers from the discount brokers, a little renaissance here, these stocks are cheap, you want to be in them.

BUTTNER:

But they're all -- they were all running up pretty well.

CRAMER:

Oh, man, they're down from the highs.

BUTTNER:

All right.

CRAMER:

E*Trade's a buy.

BUTTNER:

OK. Charles in Minnesota.

CALLER:

Jim, what about

Harmonic

?

CRAMER:

No. I actually heard things today which tell me that the quarter ... We backed and loaded. You know, that's a synonym for sell.

BUTTNER:

Exactly, we've seen that with several stocks recently.

All right, Steve in Florida.

CALLER:

Jim, what do you think about

Trend Micro

?

CRAMER:

No. Next.

BUTTNER:

All right, Ellen in New York, you heard him. Go ahead, Ellen.

CALLER:

Hi, Jim. I think you're great.

InfoSpace

, how do you feel about InfoSpace.com?

CRAMER:

INSP. I'm long it, I like it. The guy, he's a little bit of a charmer, the guy who runs it, I mean Gene (ph), but, you know, I'm with him, I wish he'd stop the insider selling. I think it would go up if he would stop doing that. But they've got the contracts, they've got the business. It's a great wireless play. I'm long it, I'm in it.

BUTTNER:

All right, we've had a lot of email directed to you. Lorna wants to know what's wrong with

Sun

? It's shining pretty strong.

CRAMER:

What's wrong with Sun? Fifty-two-week high ...

BUTTNER:

I know, it's -- with charts like this.

CRAMER:

... -- Next, Sun's great.

BUTTNER:

But is it a buy here? I mean ...

CRAMER:

Oh, I hope so, I bought a lot of it on Friday.

BUTTNER:

You did. All right, even at these highs.

And Ray wants to know about the

QQQ

, a way to play the

Nasdaq 100

.

CRAMER:

Well, what the heck, the QQQ is as Microsoft, Intel, Cisco, Sun, what's the matter with owning the real ones? What do you need the derivative for?

BUTTNER:

But it has been way up. I mean ...

(CROSSTALK)

BUTTNER:

... basket of stocks.

CRAMER:

If you want to own a basket of stocks ...

BUTTNER:

Tech stocks.

CRAMER:

... go buy a mutual fund. You don't need the QQQ.

BUTTNER:

All right. Bill wants to know about Intel. It's trading just shy of its 52-week high, quite a performer.

CRAMER:

Bill knows I'm an Intel-aholic, and that's why he brings it up. I, you know, I have to, you know, it's something I've admitted all my life, I've owned the stock, I bought more again today when it dipped down to 138. I can't help myself. I'm long Intel. I would go to it to my grave.

BUTTNER:

And you wouldn't be taking profits on this one right now.

CRAMER:

You don't take profits Intel ...

BUTTNER:

Oh, there we go ...

CRAMER:

... in the bad stocks.

BUTTNER:

... OK. Dan in Connecticut.

CALLER:

Hi, Jim.

E-Tek Dynamics

.

CRAMER:

And, you know, that's -- the merger, you know ...

BUTTNER:

Don't sell us.

CRAMER:

And I continue to think, even though the stock was down a couple on Friday, that they are doing great.

BUTTNER:

All right, Kevin in Ohio.

CALLER:

Well, he kind of stole my thunder. What do you think about

JDS Uniphase

, are you still bullish?

BUTTNER:

Oh, please tell us, we can't be here, Jim.

CRAMER:

Preaching to the choir, preaching to the choir.

BUTTNER:

All right.

CRAMER:

You know I love JDSU. Now, look ... stocks have had huge runs, you know ...

BUTTNER:

Yes, they have.

CRAMER:

... all the usual ..., but they're well managed, great company, great business. And so what happened with

Corning

this week, which is very similar to JDSU? Explosive earnings, had to preannounce that they're much better than expected. I think JDSU's having a great quarter.

BUTTNER:

So buy high, sell higher? ...

CRAMER:

That's certainly been the mantra.

BUTTNER:

Yes, yes, OK. Rich in Maryland.

CALLER:

Yes, Mr. Cramer, first ...

CRAMER:

Mr. Cramer, he's got my ...

BUTTNER:

A little more ...

CRAMER:

I'm sorry, I'm sorry, go ahead.

BUTTNER:

What do you think, Rich, what's your stock?

CALLER:

First Union

.

BUTTNER:

First Union.

CRAMER:

First Union? I wouldn't bank there, and I wouldn't own it.

BUTTNER:

OK. You heard it. There we go.

CRAMER:

Yes, I wouldn't even have a ...

BUTTNER:

Carol ...

CRAMER:

... checking account there.

BUTTNER:

But you do like the banks, though.

CRAMER:

I like the good banks. Oh, sorry, it's a long-term -- no. No. ...

BUTTNER:

All right, Carol in New York.

CALLER:

Mr. Cramer, what's your opinion of

Ballard Power Systems

? Thank you.

CRAMER:

What do you need that stuff for? Why are you messing with that stuff? Come on, stick with the real stocks.

BUTTNER:

And the real stock, I think, Fred's got one. Fred in Michigan?

CALLER:

Great show. Jim, where is Cisco Systems going?

BUTTNER:

Oh, up 18% for the week.

CRAMER:

You know, Cisco, world's largest company, Adam Lashinsky predicted that on this show. You know, when it comes to Cisco, I think we're talking about the '27 Yankees, or even the '98-'99 Yankees, and I think that Cisco's great, and I wouldn't sell a share, even after the split, the stock had a big move after the split, but I love Cisco. I pledge allegiance to John Chambers.

BUTTNER:

In fact, you said it was the stock for the century.

CRAMER:

I think you want Cisco dollars more than you want U.S. dollars. They should have a picture of Chambers instead of ...

BUTTNER:

OK, I think we got your opinion there. All right, Randy wants to know about

Global Crossing

.

CRAMER:

Too dicey. If I have to be in that segment, I want to be in

ATT

. It's got all the mo. ATT, which I am very long, also has a wireless spinoff coming. Why be in Global Crossing, which is -- showed a disdain for its shareholders, when you can be in ATT, which shows appreciation for them?

BUTTNER:

And Tim wants to know about

Palm

, which was a really hot IPO, but it's way off its high.

CRAMER:

All right, Jake Upson (ph), my shot (ph). Matt, Palm, Jake UPS, called the bottom the other day, 48, if you've read the site, you would have seen it. Jacob says it moves over (ph). Time to go.

BUTTNER:

I think we know how you feel about this next one. Bob wants to know about GE, up 13% last week.

CRAMER:

General Electric. Well, you know ...

BUTTNER:

You love Jack Welch.

CRAMER:

GE, I do love Jack Welch, as long as he's there, I think this is the hybrid stock to own. I actually am worried when he leaves ...

BUTTNER:

Buy now?

CRAMER:

... I'd be worried. I bought a little ... bought a little when it was down 2 1/2 on Friday, so, I mean, I can't tell people to sell it if I'm still ...

BUTTNER:

But watch the succession issue.

CRAMER:

It's a worry. The guy's great, I love Coca-Cola, after he passed away, that stock's been one way, down.

BUTTNER:

All right, Jim, thank you.

And there is more to come after this. We all know you shop at -- if you shop at

Nordstrom's

, they're hardly bargain basement prices, but what about the stock? Is it selling at a discount? Listen up, predictions from Jim and the gang are next.

BUTTNER:

Welcome back.

So what's the next big thing on Wall Street that will have an impact on you? Let's find out, predictions.

Back with us from

TheStreet.com

financial Web site, Jim Cramer and Herb Greenberg, in Washington Gary B. Smith, and in San Francisco, Adam Lashinsky.

OK, Jim, you're up first, what's up?

CRAMER:

All right, biotech had a monster pullback. Now, I don't know if I want to own that wild boy Aviron thing that Gary likes. But I will tell you this. This group is bottoming, and there's no better time, maybe with the life science fund or a Fidelity fund, lot of them been written up on our site. That's where you want to be, biotech.

(CROSSTALK)

SMITH:

Does it make a new high?

CRAMER:

Does biotech make a new high?

SMITH:

Yes,

BBH

.

CRAMER:

No.

SMITH:

No.

BUTTNER:

Herb called this one a couple of months ago, I have to say. All right, Herb, what's your prediction now?

GREENBERG:

Nordstrom, everybody's given it up for dead. Watch in March, very strong comp store sales, it's the whole quarter, as a matter of fact. It's going to be ...

CRAMER:

He is insight (ph), he knows my wife shopped there ...

(CROSSTALK)

BUTTNER:

All right, all right, Gary B., what is your prediction?

SMITH:

All right, here, viewers have a chance, Cramer vs. Smith on this one, BBH is finished, it's over. Yes, it'll make a little move up. The place you want to be, and I said BBH a few weeks ago, and I was wrong.

HHH

is the place to be. Moves up another 30 percent by the end of the year. Go there if you like me, go BBH if you like Cramer.

BUTTNER:

Oh, my God, it's a popularity contest. All right, we'll be watching that one.

Adam, Adam, go ahead.

LASHINSKY:

Gary, you're always picking a fight. OK ...

(CROSSTALK)

LASHINSKY:

... this is just a hunch, so don't ask me who, but there's going to be a tech biggie that will preannounce a bad quarter. It could have a mini tech wreck.

BUTTNER:

OK. Thank you all.

CRAMER:

...

BUTTNER:

Oh, you hate him, you hate him.

All right, thanks so much for joining us, and we'll see you again next week. Until then, we hope you invest wisely.

END

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