This column was originally published on RealMoney on Sept. 8 at 2:46 p.m. and updated at 4:11 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.
You know I like tech, and yet some of you may be dissuaded from buying because of
or because you don't know
sure seemed to deliver according to this release just out.
tech rally's still on its way, don't you get worried. Don't get worried just because last night Take-Two posted a
bigger than expected loss and cut its forecasts. This is a video game company, these are the Grand Theft Auto guys.
If you follow "
Mad Money," you're probably saying one of two things about this. Either you look at the lowered forecasts and ask yourself, "Hey, wasn't Cramer saying these tech products, these video game things, were gonna have a big rally? Isn't this company saying the exact opposite of what Cramer's been saying?" And then you're calling me an idiot, and a loser and you're telling me the tech rally won't happen. So maybe you want to snipe at me from that angle.
But you could go another way, too. You could believe my tech thesis and say to yourself, "Take-Two is down big today, and I believe that represents a
. Because even if the company doesn't understand it, I know that there's a tech rally coming, and it's a rally that will be driven by product cycles. Take-Two makes tech products, so this stock is a buy." I mean, it's down more than 6% today; let's get in now before the rally happens. Right?
Sorry, my friends, wrong takeaway. If you believe Take-Two's bad numbers and bad guidance make for a buying opportunity, you're wrong. You might have had that thought a couple quarters ago with
, when it underperformed. And you know what would've happened? You would've lost money when it disappointed the next quarter, and then more money when it disappointed the one after that.
You can't own these video game stocks. There's a reason I've been telling you not to buy Take-Two. There's a reason I've been telling you not to buy Electronic Arts.
That reason is very simple. It's not that I'm recanting my tech thesis; it's not that I'm eating crow about tech product cycles. I'll eat plenty of crow, I like crow, it's tasty and maybe I've got a masochistic streak.
But I'm right about tech.
Tech has rallied in the fourth quarter of every year for the past 13 years with only one exception. And you know what? We don't have an Internet bubble to pop in 2005. And beyond that, I stand by the product cycles. People will be buying the fancy new cell phones, the MP3 players, the high-definition television sets and yes, the new video game systems and their video games.
This isn't about software, it's about hardware. So you can buy
here, even though they're both at 52-week highs, because they've got new products that will be working. But Take-Two makes software, Electronic Arts makes software. That's not the story. These stocks aren't indicators for the tech I'm talking about.
So what's the take away? You ignore Take-Two; you want video game money, then you buy
. Yeah, that thesis is unchanged. GameStop will be making money, like it or not.
, with the new Xbox 360, will be making money.
See, the key to the tech rally was today, but it wasn't the Take-Two report. It was the strong
conference call. Nat Semi said that the handset -- read: cell phone -- market was strong. It said that all the other electronic gizmos and big-screen televisions were doing well. That's why I bought
ActionAlertsPLUS. It's why I told you to buy
. It's the hardware plays, it's the component plays. It's not video game makers. That's all hit-and-miss, that's not the right part of the product cycle.
Look, it's not even the products. It's the things
the products. Corning was up today because Sharp just announced it was drastically cutting prices for LCD televisions; Corning makes the screens for those, but Corning isn't cutting prices. It's just selling a lot more screens.
The same cannot be said for Take-Two. It can't be said for Electronic Arts. They aren't part of the tech story, and they shouldn't be treated as such.
Bottom line: Don't worry about Take-Two. Load up on the Qualcomm and the Motorola and the Apple and the GameStop and the Corning and the
, for that matter. The tech rally is still on.
P.S. from TheStreet.com Editor-in-Chief, Dave Morrow:
It's always been my opinion that it pays to have more -- not fewer -- expert market views and analyses when you're making investing or trading decisions. That's why I recommend you take advantage of our
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This column was co-written by Cliff Mason, a freelance writer in Cambridge, Mass.
At the time of publication, Cramer was long Intel, Motorola, GameStop and Microsoft.
James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside 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. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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