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Cramer Chat: A Wild Day, and Jim's Ready for the Questions

The Trader answers queries on the market's latest tumble, and the opportunities and the challenges.
Author:

OnlineHost:

JJC is in the house and we're ready to roll.

TSCNYjjc:

Hello everyone, wild awful day for the bulls. Let's get rolling.

Question:

Jim, is this the time to step up on CIEN?

TSCNYjjc:

This is not the time to be adding to your positions in Ciena because it's one of those companies that is levered to the capex budgets of these telcos. It's right in the crosshairs and things have just gotten very bad almost overnight.

Question:

What do you think of

CNBC's

analysis that the market factors boil down to the four E's: elections, economy, earnings, euro?

TSCNYjjc:

I think that is a lot of peoples' analysis. I think it is important but it is leaving out the fifth, "ex," as in capex.

Question:

TheStreet.com

is terrific! Safe to get into Nortel now?

TSCNYjjc:

Thanks for the kudos! I don't think that NT bottoms here. I wrote a

piece about this today and I think that you have to use

Gary B Smith's

analysis and not buy the first dip.

Question:

From the

Buzz and Batch

boiler room: What beaten down Internet stocks does your beautiful wife, the Goddess, like now that AMZN has reported better-than-expected earnings?

TSCNYjjc:

My wife thinks that things have gotten out of control negative about the Web. She uses Amazon constantly, but she does not use the Web to buy when a catalog is around.

She was too bullish earlier when she said she wanted to buy a basket of single-digit names but she is convinced that there are some winners among the "losers."

Question:

Thank you very much for the information you share and the guidance in

RealMoney.com

. Is there anything that you can say about InfoSpace? If not, would you address what you think is happening at Agilent. Does the optical bust hurt it?

TSCNYjjc:

Agilent is too levered to semiconductors but I think it's getting interesting. InfoSpace has a conference call that I am not on because I am on this chat and I can't tell. Have to wait till tomorrow.

Question:

Jim you're the best! Care to venture comments on the Web hosting sector, especially DRTN and EXDS ? Love ya, dude!

TSCNYjjc:

Data Return is doing fine, it is a not-so-big exodus. I think that Exodus is kind of interesting here because the Web is not going away. But I would only own it for a trade.

Question:

If the big volumes are fired by institutional traders, how does a trader with a college degree and training see a 2% miss on earnings, then be a party to a 25% drop in a good stock?

TSCNYjjc:

I don't think that degree stuff matters one whit. I don't even know where the people I work with went to school. You have to be street smart to be in this business. And street smart says, if people were looking for something big and they didn't get it, they will sell.

Question:

What will happen to the drug stocks if

(Al) Gore

is elected?

TSCNYjjc:

I think these stocks will sell down big if he is elected and then you buy them because I don't think he will be able to do much to hurt them. These are our largest positions and part of that is a judgment we have made that Gore will not win.

We think that these stocks could be magnificent performers for the rest of the year if

(George) Bush

wins. Just magnificent.

Question:

Your comments on JDSU?

TSCNYjjc:

I think they will report a strong quarter but I think that they supply to customers that are just now getting hit by the capex problems. I have written extensively about these capex problems and gave a

primer earlier today on

RealMoney.com

if you are confused. That can really help you.

Question:

JJC, fibers down big today, any thoughts about SCMR and the rest of the group?

TSCNYjjc:

We are hearing rumblings that the big telco buyers of these high-end products are cutting back spending. That means you cannot own them any more and you have to short them if they lift. I know that's radical, but that's how it works.

Question:

JJC, You were looking for feedback on MU alternatives from your audience earlier today -- anything qualify? Are we done hating AMD yet?

TSCNYjjc:

Great question. Universally everyone said it was too early to buy although some talked about buying it in the mid-20s. This is a cyclical business and you have to buy it at the bottom of the cycle. We are not there yet. Still too close to the top!

Question:

Bank One, First Union or Firstar to buy or not?

TSCNYjjc:

First, I think that you are in the right group. I like Mellon, PNC and Firstar. Firstar is being beaten down by its acquisition of a bad bank out west but I think it will digest it well. I think these are the areas you have to think about buying.

These are the areas I am bullish in. I think FTU and ONE can turn around but that they will have to shrink and that it is a win for Mellon and PNC. We are long Mellon.

Question:

TheStreet Recommends

InfoSpace and DoubleClick?

TSCNYjjc:

DoubleClick sells at a pretty absurd level to cash. I think that DoubleClick has a viable business and paid to get another business, Abacus Direct, that was a big mistake. People are too negative on the sector and I would buy DoubleClick down below 10.

Question:

What do you think of RMBS and Lucent?

TSCNYjjc:

Rambus is too speculative. I think LU will just be like a Unisys. It will go up a little and down a little and end up lower. It is not a stock to own any more.

Question:

What about Apple and a comment on Mr. Jobs?

TSCNYjjc:

I think Apple reported about the worst quarter I saw this eps period . That said they have a lot of cash. I would sell it but I don't see much downside. It's opportunity cost.

Question:

What stocks (or index) will you be watching as a "tell" that the data-storage bubble may be bursting?

TSCNYjjc:

I would watch Inrange and McData as they are the lower- quality ones.

Question:

Any opinion on FCS (Fairchild semi) and LSI?

TSCNYjjc:

These stocks seem to have found levels where they don't want to go down much from here. We thought about buying LSI off of Playstation and we owned FCS recently. These stocks are getting washed out. They are stocks that we are looking at to buy here because the expectations have been lowered.

TSCNYjjc:

Remember my thesis: I like the techs where the expectations are lowered. On this, a horrid, horrid day, you did not do badly if you owned the personal computer stocks because they are so washed out. They will come back first. That's where the opportunity is in the sector. The Microsofts, not the storage and fiber optics. Ask yourself, "Has it lowered expectations yet?" If it has, we're looking at it. Or buying it.

Question:

Mr. Cramer, what is your take on GLW 's retreat considering it's latest earnings and outlook for the next Q?

TSCNYjjc:

This is really important. I think this business just got into supply/ demand balance. Remember what happened to MU the moment that it got into balance? MU went from $80 to $30. Now I played MU with calls right to the end because we did not know when it was going to end.

When it did we lost money on the last calls we owned, but that is all. That's where this GLW is. Once supply met demand, and I think it just did, these stocks go from must own to must sell. It's that simple. It's always that simple.

Question:

Hi Jim- What do you think of Interliant (INIT)? Is the ASP sector gonna finally get it together in a year or so?

TSCNYjjc:

I think some of these are winners and some are not. I don't know INIT well enough.

Question:

What are your thoughts on Kroger?

TSCNYjjc:

Ahh, now you are talking again. I think KR is a low-risk, good-reward stock. I like Safeway even better. That one sold off and I want to own it below $45. Remember I look at a whole universe of stocks. We are not a tech fund. There are plenty of stocks that are working here that are not tech.

Question:

Thoughts on Inktomi?

TSCNYjjc:

Reports now. I want to see the report. I think that some of these infrastructure plays will be good when the tape turns up, this is probably one of them. We don't own it though.

Question:

What's left on your list for us to have a bottom?

TSCNYjjc:

We need to see Janus stabilize, we need to see telcos stop going belly up or having trouble -- that one will be hard -- and we need to see oil comfortably under $30 and that hasn't happened. I am reviewing the checklist again this weekend.

Question:

How is energy and utilities, such as natural gas, looking for the near term?

TSCNYjjc:

I think this group is trading funky right now and working off its huge overbought condition. I wanted to buy them at the bell today but I could not get a quorum. I thought HAL led the group down and yet it was engineering that led HAL down. I am going to push to buy the drillers tomorrow. They have had a monster pullback and I want to be in them.

Question:

JJC, love you and

TheStreet.com

. You've made and saved me much $$$. I consider online ads a nuisance, never use them. I love Yahoo! but how do they/will they make money from me with much of their revs coming from ads?

TSCNYjjc:

They make money a lot of ways, remember, through sponsorships and tolling and payments that are terrific for them. Also I believe that branding on the Web is going to happen. Right now everyone wants direct response, but I think that is silly. If you stare in front of a screen all day like I do and you see ads, you remember.

I think this whole "no branding on the Web" thing will change big but you have to stay in the game to eventually see the rewards. Also I think the media should be more creative in figuring out ways to make it so the advertisers get seen. That hasn't happened yet, but it will.

Question:

Do you have an opinion about fixed wireless companies?

TSCNYjjc:

Oh boy, these could have explosive growth but there isn't the money right now for these projects. Again, see my Capex

writings. These companies can't get funding.

Question:

Are you bullish on the market again? It seems like you are in recent articles.

TSCNYjjc:

Understand that I become bullish when I see a lot to buy. I am not constrained by having to buy tech. I came in this morning with a list of 10 stocks to buy, but only one of them was a tech stock.

Two months ago I would have a list of two or three stocks. I have to tell you I am a stock picker and I see a lot of stocks worth owning. That's what drives my enthusiasm. I am not picking among AMCC and PMCS and XLNX and SDLI. I am picking among Pfizer and Kimberly and Merck and Pepsi.

Maybe I am too old but I didn't always trade tech and now that tech has cooled I am more than happy to look elsewhere. There is no sin to making money in UNH or Abbott labs. Few readers ever seem to care about these. But it is my job to find winners. I see 70% of the

S&P

that looks interesting to me. That is up twice as much as a month ago. I can't say to myself, "Oops, there goes Extreme. That's going to kill JNJ." It doesn't work that way.

Question:

Do you think that the stock market will be at 12500 at the end of the year?

TSCNYjjc:

I think that the

Dow

has a better chance to rally 15% than the NAZ does. I also think that people are going to have to get used to some out performance from other areas beside tech until the expectations have been brought down.

>Thanks so much! Have a great night and keep reading!