Fantastic, a true trend match. In one corner, weighing in with a 30 P/E on depressed earnings, is the champion, the cyclicals, fresh from a month's unbeaten streak.
And in the other corner, the new challenger, weighing in at 40 P/E -- down from 50 -- on next year's earnings, the
The rules? Only one new champ can emerge from Friday's bond action. Only one will remain cheap enough to buy.
That's how you are going to see the match cast on Friday. It sounds very believable, but in truth, there is no zero-sum, no one champ. Some cyclicals will still rally and some drug and tech stocks will still falter.
Still, the major trend is suddenly up in the air. The chemicals and the papers have started to have pullbacks and the oil market seems toppy. Meanwhile, the drugs have sold off so far so fast that you can make a compelling case that they are no more expensive than usual. And personal computer tech hasn't done a thing all year so that's got to grab somebody's interest.
Lots of jockeying tomorrow and then, well, maybe we will just have a draw. And then there is the Net. The Net plays by a different set of rules. Sometimes it's not even in the arena. Unfortunately, the trick to the Net right now is all supply and demand. Right now some big firms are working some monster insider selling orders at the same time that there is tremendous worry over broadband strategies and the momentum of the Net.
. At one point today I was bombarded with people telling me, oops, there goes the Net. It's over.
made no more headway than I make when I take that exit off the BQE to save some time in tight traffic. (Very inside Brooklyn joke.) The stock was called down big. Shorts piled on! People were rubbing their Tribbles for good luck, as the stock that Cap'n Kirk made famous looked more like Cap'n Crunch. But it came right back. And instead of making bad
jokes, I should have been buying.
The exact bottom came when news spread that
was going to host a call with
management. Although the call was benign and not really newsworthy, it did the trick and bolstered enough Net enthusiasm to turn the whole group around. (Argues in favor of having a full-service broker for some of your business, by the way, as these calls can make you money.)
Again, for me, I conjure the image of a grizzled rewrite man with a green eyeshade somewhere deep within the bowels of the dead-tree press killing that Net obit that they want to print so badly.
Heading down to Williamsburg tomorrow for the
Business Roundtable Squawk Friday. Making a family roadtrip out of it, so limited filings tomorrow and Friday.
Looking forward to the interviews. For the last couple of years we have had all of these cyclical folk and nobody gave a darn because they weren't part of The Stocks Everybody Loves/
. While they were always worth listening to, maybe this time they will be worth acting on.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long AOL, although positions can 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
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