Don't believe me when I say tech may be too hard for most of you? Don't take it from me. Take it from Bob Stansky, the great stock picker who runs Fidelity's (FMAGX) - Get Report Magellan fund. If you have money with Magellan, as I do, you got your annual report in the mail yesterday. Came in that oversized white envelope with the green letters. No, don't throw it out. Open it. Like most things that come out from Fidelity, it is an unapologetic, no-holds-barred look at performance.

In a terrific Q&A between Mr. "Beats Me" (they never reveal who does the questioning) and Stansky, the manager gets grilled about why he fell behind the

S&P

over the last year. He explains calmly that he was underweighted in defensive issues. But, it could have been far worse, because Stansky made a great call on technology, cutting his fund back to an 11% weighting vs. a 17.4% weighting in the S&P.

Why does that matter? These big funds are benchmarked against the S&P. If he wanted to

be

the S&P he would just mimic it. You don't need his fee structure for that. You could just go to an index fund. If he wants to

beat

the S&P, he has to figure out which sectors are going to outperform. He chose incorrectly when he underweighted defensive issues, but he could have lost far more than the S&P (he was down 24.22% vs. down 21.68% for the S&P) if he had gone hog wild with tech as so many inferior managers did.

Listen to his rationale about why he remains underweighted, and, more important, think about it, because this is a manager who has far more resources than anyone else reading this note (he is a reader) and has more than analytical skills than 99% of us:

At the end of the period, I felt there were more questions than answers regarding technology. Looking back, several elements converged to cause the downfall of tech stocks through 2000 and into 2001. I've mentioned high valuations. In addition, the late '90s saw a combination of significant Y2K spending -- which had a finite duration -- and the rapid build-out of technology networks by newer companies that quickly received funding from the capital markets despite a lack of earnings history. That ended when it became increasingly difficult for these companies to raise the capital they needed to sustain strong growth. Plus, the slowing economy put pressure on corporate profits across the entire market, causing many different types of companies to begin to cut their spending on technology. As a result I reduced my investments on some of the larger tech companies believing that, because of their size, they would find it difficult to sustain the growth rates of recent years. For example, Cisco, EMC and Sun Micro were no longer among the fund's top-10 investments at the end of the period. Looking ahead, I'm trying to analyze how long the soft demand for tech products will last. And I'm trying to examine how quickly companies will work through the excess tech inventory in the marketplace before they begin to reorder products and services. Longer term, I believe the technology sector still offers attractive growth. But I'll have a better feel about the near term in the months ahead.

In other words, one of the world's top managers isn't at all sure of tech and is approaching it day-to-day. That's sobering. And something to think about as you cull through your remaining tech holdings. I think he's very right, we still don't know whether things are going to come back, let alone

when

they will come back. Considering all the bogus hullabaloo and phony certainty people have about tech, I found Stansky's candor refreshing.

Go read this report. And don't skip the nontechnology stuff. (He loves the financials, by the way, as I do.) It makes great reading, too.

Random musings:

Some of these biotech stocks are going to come back. Which ones work? How do we make money with these stocks? How about coming to

our conference and figuring it out together?

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. At the time of publication, Cramer was long EMC. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to

jjcletters@thestreet.com.