Riding the Greatest Roller Coaster

Watch for some stomach-churning moves ahead.
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How can one session include inflation, recession, boom, bust, a love affair with growth, a divorce from cyclicals, and then a reconciliation, and a recovery of the chip stocks? Can

America Online

(AOL)

be both worshipped and defrocked? Did

IBM

(IBM) - Get Report

really go up 8 points, now making the

Morgan Stanley

Friday downgrade a little while ago seem like light years?

Glad I missed it.

Yep, this market has transmogrified into the greatest roller coaster on earth, one that operates between 9:30 and 4 p.m. and can have you throwing up or cheering at a nanosecond's notice.

How fitting that I checked in Friday from some of the great coasters of all times, at

Busch Gardens

in Williamsburg. I am glad I took no action each time, because each time the market sent false clues. I would have been tempted to bet with a group that was riding high while at the top of my own coaster, and bet against a sector rotating lower during my own troughs.

How long can this ride go on? Amazingly, I would tell you that, other than some of the big cyclicals, the ride STOPPED a few weeks ago. I happen to take a suitcase that included a copy of my portfolio from before my vacation a few weeks ago, and I couldn't believe the prices of some of these growth stocks. They have been hammered, obliterated, trashed. We have been having a massive correction, with some stocks dropping large fractions of their worth in the blink of an eye.

The

Dow

has masked everything so amazingly, that I was in disbelief when I looked at the closing price of the averages on Friday versus a portfolio of growth stocks, tech, drug or Internet.

If you recall, for the longest time, the Dow and its ilk, did nothing, stood by, as the Net/tech/drug complex zoomed ever higher. Conventional wisdom held that a market that took up only The Stocks Everybody Loves, or TSEL, would eventually end in cinders, bringing everything down with it.

Wrong!

What's happened is that TSEL continue to roll over pretty much unabated as everything else, from transports to utes, works well. Just the opposite of what so many talking heads told us had to happen.

At a certain point in time, The Stocks Everybody Despised, or TSED, will get too far ahead of themselves. When that happens, you will hear that they will roll over, bringing everything else down with them. This theme will dominate the financial news as the Dow steps backward after such a great move.

That will be the time to shift back into the former darlings. It may not be until later in the year, as tech performs poorly during the warm weather (coupled invariably with some sort of El Nino-like Y2K problem -- remember that worry). But it will happen. And when it does, those stocks will come roaring back.

The question is, from what levels? And will they be from such depressed levels that you would have been wrong to hold out?

We can't tell yet. But I sincerely doubt it. These companies are organic: They have ways of working their way back. Even as their stocks tread water or trend lower, managements are trying to figure out ways to get earnings re-energized.

I wouldn't bet against them.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long America Online, 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

letters@thestreet.com.