How bullish will Applied Materials (AMAT) - Get Report be? Will they be able to "spin" the DRAM price declines in a way that will have credibility? Will Dell (DELL) - Get Report be able to put a good face on those declining gross margins? How about Europe? What went wrong? Can it be fixed? Can Lycos (LCOS) explain away the lack of great advertising growth? Does Lycos need a partner, really? Will these companies say things got stronger or weaker as the quarter went on?
, everybody worked late last night. We had to listen to the conference calls of all three companies and then talk with the analysts to make sure we got it right. It is all part of the ritual of "work."
About two months ago when I was on
were joking with me about "my work." There is a reason to be cynical about whether there is any "work" to be done in this business.
No greater authority than
has emphasized that you should buy stocks of the products you like. People have made fortunes buying
because they like AOL or
because they like online auctions or
because they saved money on an airline ticket.
I don't begrudge those gains. There is no asterisk on gains saying, "Hey, he got that profit ONLY because he went on eBay and bought a pair of Zeiss binoculars from WWII and then went and bought the stock."
But stocks, ultimately, go up and stay up because institutions like them, and institutions won't buy stocks if they don't think the business is being run right. They have to ask the questions I asked at the top of this piece if they are going to stay shareholders. They go on the conference calls looking for optimism or pessimism. The former may convince you to stay; the latter may convince you to bolt. If managements don't have answers about why things weren't up to expectations, then the "work" shows the stock should be dumped. Work can't be trifled with; it has to be done or you get fired or they take the money away.
How important is this? My family loved going to
(BOSTQ:OTC BB). We could have stayed long that stock come heck or high water based on the fine meals we had at our local Boston Chicken. But anybody who did "work" would have jettisoned that stock so fast, their heads would spin.
I wish it were as easy as "Hey, love eBay the auction, love eBay the stock." But that's just plain wrong. If you think it isn't, you will lose money. You can bank on that.
. Immediate bid on the tape today. Great job.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Applied Materials, Dell, America Online, Lycos and eBay. 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