In 1987, during the crisis after the Crash, the companies and theFederal Reserve responded and bought back huge amounts of stock and printedhuge amount of cash. It was the greatest single buying opportunity of alifetime.
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But then again, the prospects were better for business and the crisis was oneof overvaluation mixed with futures instruments that moved too fast for manto comprehend and took the market to severe undervaluation overnight.
Now the crisis is a war, started on our own soil, down the block from us. Andthe prospects for our companies seem dismal, and the cash much less abundant.The undervaluation, while evident in some cyclicals and financials, is not soevident in technology, barring a huge new stimulus of spending.Or so we think.
If the same antidote to 1987 can be put into place -- buybacks by companiesand money-printing by the Feds -- we could pull ourselves out of the morassthat we were already before this current crisis began.
This bear market in technology stocks has now lasted 19 months. For all ofthe redundancy and storage that companies thought they had, the events of thelast 72 hours show that you need more than you thought. Storage, dataconnections, duplicate phone lines, more ways to be 24/7 -- these are all good for technology stocks, and provide a reason tothink that the bear could at last run its course.
It is understandable thatthere could be something positive in that sector. It would be the equivalent of
seeing better orders after the tragedy of a severelydestructive hurricane; that's how big the rebuilding and redundancy effortmight have to be. These are hopes of a bull, however. And hope isn't alwaysinvestable.
I want to be perfectly clear. War itself, unless won swiftly, is aprice-to-earnings lowering event until the conclusion is near. But to blotout what could go right financially,
even though what has happened down thestreet from me is so terribly wrong
, is to underestimate our great nation.Investors' psychology, responsible for so much of the current malaise, may surpriseus. For the better. I am not willing to make a bet against the United States or itsmost visible sign of financial well-being, the equity markets. Short-term, anything can happen. Long-term, that bet's a loser.
James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for the network of TSC sites and serves as an adviser to the company's CEO. Nonstaff contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, he invites you to send comments on his column to