Anyone for Plan B? While we all scurry to wonder what we can buy in tech and what we can't, I'll be keeping my eye on drug and bank stalwarts.
If PC spending is tanking, as
notes this morning, maybe the quickest money to be made is to switch sports, not horses. I am going to look hard at stocks that do well in a slower-growth economy, because, like it or not, PC spending has become a major part of the GDP.
On days like today, I like to line up a whole series of pharmaceuticals and consumer noncyclicals on my screen to see if my thesis is right. If by 9:45 a.m. money is flowing into the
, then I might have a nifty trade.
Why does this work? Two reasons: One is that the
futures take everything down, tech and nontech, but surely nobody believes that what is bad for
is bad for Colgate. (And be sure to check out my take on Compaq in a
story I penned this weekend.) Secondly, when money comes out of a sector these days, it rarely goes to the sidelines; it just goes back in under another guise.
If you believe PC spending may be waning, then you also have to believe the economy is cooling. When the economy is cooling, you should buy drug stocks and some financials that benefit from lower interest rates.
For me, decisions like this are akin to switching to a "prevent" defense in football when you expect a pass, or maybe walking a player to pitch to the pitcher in the
. They are what the textbook says to do. So I do it.
Don't forget the
chat this afternoon between
guy, and me. While it's not the
"Rumble in the Jungle"
"Thrilla in Manilla,"
we do disagree on things. It's more of a
thing. (No, not
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was short Compaq, 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 firstname.lastname@example.org.