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If you own technology stocks and regard them as great growth vehicles, you are not going to like this article.

When I got into the money business, there were tons, literally tons, of industrial cyclical companies. Let's take just steel. You had Bethlehem ( BS), U.S., LTV, Inland, Geneva, Oregon Steel ( OS), Wheeling and Armco. These stocks all traded vigorously, and you would read (not hear, because there wasn't much on television about stocks other than FNN, which most managers didn't watch) about managers championing one or the other of the steel companies on a regular basis.

As a trader, I used to get wind that a particular steel company might have a good quarter. As someone who didn't like the cyclicals per se and only blessed them as trading vehicles, I would spend a huge amount of time figuring out which ones could generate upside surprises. If I heard that one would have a good quarter, I would buy some stock ahead of the quarter and then blow it out into the better-than-expected quarter for a solid gain. I wouldn't stay with it because, frankly, nothing ever happened during the quarter to entice me into staying with the position. It was "dead money," so to speak.

Now, in preparation for Applied Materials ( AMAT), which a bunch of analysts bulled this morning ahead of the quarter tomorrow, I feel like it's deja vu. The same factors that made me want to buy Inland ahead of what might be a good quarter intrigue me about AMAT. In fact, if I owned AMAT, I would sell it into the analyst upgrades and chatter ahead of the quarter, because, alas, I think that AMAT's turned into a giant cyclical play. There's a day to buy AMAT and then a day to sell AMAT. You just have to get the days right.

Understand, this thesis of mine is pretty damning for most growth investors who love to buy and never think about selling unless they are pulled kicking and screaming out of a stock. Yet, it is difficult to deny that the characteristics of a semi equipment play or a fiber play or a wireless play are that much different from the characteristics of cyclicals of old. Their stocks plod along, not really doing much of anything until the quarter. And if the quarter's good, they trade up momentarily and then fall back just as fast.

Take Cisco ( CSCO). Here's an example of a company that everyone regards as a growth company that traded just like a steel stock. First, it reported a terrific quarter and the stock burst upward on that news for about a point and change. Then it told you that the next quarter might not be so hot. That's like a cyclical, too. They bounce from one quarter to another, with no clear-cut pattern of strength or weakness.

The implications of techs being cyclical stocks could be devastating for anyone involved in this group; because of their inconsistency, cyclicals never get the multiples that growth stocks get. The idea that a cyclical could sell at the absurdly high multiple of an EMC ( EMC) or a Sun Micro ( SUNW) right now just doesn't make sense.

Of course, at the trough, cyclicals trade at huge multiples to earnings, but that's because at the trough previous earnings are low and future earnings could be high. However, I don't know anyone who is thinking that Sun's or EMC's or Cisco's earnings are going to spike up next year, making those high multiples seem simply wrong to my eyes.

In other words, if these stocks are cyclicals, they are still too high. And they can only be played for trades ahead of superior intelligence about whether a good quarter awaits or not.
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 Cisco and EMC. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to jjcletters@thestreet.com.

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