Tough Tech Ahead of Y2K - TheStreet

Tough Tech Ahead of Y2K

The Lexmark warning is exactly what the techies were most worried about, but Cramer says there's another side to the Y2K nightmare.
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So Lexmark (LXK) did everything except announce a 3-for-2 split. I guess the stockholders will take care of that for them this morning, though.

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Message Boards. Yeah, tech is tough here and all because of Y2K. I did a lot of soul searching this weekend -- and some emailing to some of my hedge fund friends of the bearish variety. I came back thinking this is going to be another shoot-first week for tech because of Y2K.

The Lexmark warning is surreal. It is exactly what techies were most worried about. And this stock was flying into the release, so it will be hit really hard.

But there is a flip side to the Y2K nightmare. We are beginning to focus increasingly hard on stocks that are immune to Y2K. Food, beer, drugs -- these are the stocks that we don't have to fear a Lexmark from. And if I am bullish on the bonds -- I am long them -- then why not go long the drug stocks?

I am not positioned well for a move into drugs and will have to scramble to get some in. Here is the typical problem of listening to your fears.

On Friday, I could have bought gobs of drug stocks, but no, the talking heads all said nothing bottoms on a Friday. Now I knew that wasn't the case, but I held back.

Now I will have to pay up to shift gears into the non-Y2K plays. We will add to our food and biotech stocks. We will continue to monitor the techs that are already out of the Y2K woods.

And we will do our best not to surrender to the gloom that infects everyone I speak to right now.

Alas, that will be the toughest task of all.

Random musings:

Abby Joseph Cohen

reiterates her bullishness. Man, if we were to lose her, that would at least create a level of capitulation that would be sweet. But no such luck.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund was long the 30-year bond. 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