After another triple-digit loss in the Nasdaq market, Jim Cramer told viewers of his "Mad Money" TV show Tuesday that he knows what a bottom looks like for tech, and it's not what investors might think. His comments came on a day when the Nasdaq dropped 108.08 points, or 5.8%, to 1754.88. Over the past five days, the index has fallen 16.1%. Cramer turned to the history books to remind viewers that after the dot-com bubble of 2001-2002 many of the bellwether names on the index, including Cisco ( CSCO), Intel ( INTC), Microsoft ( MSFT) and Oracle ( ORCL), fell 80% to 90% before finally hitting bottom. He reminded viewers that there were pundits then who recommended these names all the way down while warning them it was too late to sell. The average tech stock fell 78% back then and could do so again, he said. Cramer said there are three things that need to happen before a bottom in tech can occur. First, the earnings estimates for these companies need to be cut repeatedly until the companies can beat them. Second, companies with bulging inventories need to work through those inventories. And finally, the economy needs to turn around. Cramer said based on current market conditions, we're nowhere near a bottom. The estimates haven't been cut, he said, noting only one downgrade of Yahoo! ( YHOO) so far. He said companies have just now hit the inventory wall and haven't even begun to work off excess products. Finally, Cramer said the economy is not turning around anytime soon. Tech stocks are cyclical and they don't have to bounce back, he reminded viewers.
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