Traders are furiously dumping their drugs and their food stocks to get back into the beloved tech socks that have come down in value.
That's my queue to start offering some tech and rotate back to the now unloved consumer staples. We get a solid tightening and no change in bias and these stocks will come right back around again. Even if they didn't there are lots of ways to win.
So we are buying stocks like
, which just had a terrific meeting in New York yesterday but is down a buck and change because of the rotation. What's the attraction? Pepsi's one of those companies that my partner,
, would say is going from "good to great." It is raising margins, cutting costs, growing cash flow and, most important, taking it to
! In the meantime, its stock has done nothing for so long that it reminds me of the Purloined Letter.
It's right in front of your face
I know there isn't much that will happen
on Pepsi, but in the meantime, it is one of those stocks that as it goes down it gets cheaper! I point this conceivably intuitive notion out because in the world of tech/technical analysis, stocks that go lower get more expensive!!
Similarly we are buying
, two stocks that we think are biding their times between their next moves up.
As we are still neutral on the market, we are financing these buys with small sales of
, which we bought aggressively into the recent downturn. (Everyone of these buys I shared with you, so I figure I would give you the heads up.)
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Texas Instrument, Nortel, American Home Product, Pfizer and Pepsi. 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