Until further notice, tech stocks are off limits unless they pass the Jim Cramer test, Cramer told viewers of his "Mad Money" TV show Wednesday. The best way to trade tech stocks is by following the calendar, he said. And right now, the calendar says it's time to sell tech. Everybody on the Street knows about the calendar, and most money managers defer to its wisdom, he continued. The secret to tech stocks is that they are seasonal. You sell them in January, you buy them in August, and hold on to them until mid-December, he said. If market players get lucky with a certain tech stock, they could hold it even until mid-January. But no longer, Cramer warned. Though he believes that people should consider getting into other sectors during this time, Cramer said investors shouldn't necessarily sell all of their tech picks because of the calendar. "Discriminate and find out what part of the tech sector is getting damaged," he said.
But You Can Keep...At the same time, there are some tech stocks that have what it takes to resist the tug of seasonality and defy the calendar, Cramer went on to say. These stocks, he said, are driven by "blowaway" earnings or "really strong" products. The five tech stocks Cramer believes that investors can still stick with are Cisco ( CSCO), Apple ( AAPL), Hewlett-Packard ( HPQ), which he owns for his charitable trust; Google ( GOOG) and Microsoft. These are the stocks that should make market-players money as the rest of the tech stocks decline, he said. These are also the stocks Cramer likes more on weakness. If they go down, think of it as an opportunity and buy more, Cramer said. Although he said he can't blame anyone for wanting to take a profit with Cisco, Cramer believes the company has a "product-driven story that cannot be denied." Not only are Cisco's old competitors "dead," but also, after three downgrades, a lot of the risk has been taken out of the stock, he said. In addition, Apple just reported a "beautiful" quarter and gave "ridiculously low" guidance for the next quarter. Cramer believes that the flow of new products and the iPhone will drive the stock higher. Microsoft is too powerful to let seasonality bring it down, and people should view its pullback as a "big, fat gift," he said, calling Vista the "single-most-awaited product story in years."
Am I Diversified?In his "Am I Diversified?" segment, Cramer's first caller owned the following five stocks: National City ( NCC), Procter & Gamble ( PG), Johnson & Johnson ( JNJ), which Cramer owns for his charitable trust, BP ( BP) and Sanofi-Aventis ( SNY). Cramer called out a pair in Johnson & Johnson and Sanofi-Aventis, and advised the caller to sell the latter. His next caller named the following stocks as his top five holdings: NYSE Group ( NYX), BEA Systems ( BEAS), Marvell Technology, Sirius Satellite ( SIRI) and ThermoFisher Scientific ( TMO). Cramer also spotted a speculative tech pair in this portfolio with Marvell and BEA Systems, and suggested that the caller take profits in BEA. His last caller named the following five stocks: Sirius Satellite, Rite Aid ( RAD), Nymex ( NMX), Blockbuster ( BBI) and KBR ( KBR). Cramer said he views Sirius, Rite Aid and Blockbuster as speculative stocks and told the caller to make some changes in his portfolio. He advised getting a drug stock and maybe a bank stock. In his "Sudden Death" round, Cramer was bullish on Transocean ( RIG), which he owns for his charitable trust,
Lightning RoundCramer was bullish on NYSE Group ( NYX), Altria ( MO), Public Storage ( PSA) and Tower Group ( TWGP). Cramer was bearish on General Motors ( GM), Hertz Global ( HTZ), LoJack ( LOJN), Del Monte Foods ( DLM), ON Semiconductor ( ONNN), DivX ( DIVX), King Pharmaceuticals ( KG) and Tata Motors ( TTM). For more of Cramer's insights during the Lightning Round,
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