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Technology Stocks : Jimbo's Playhouse/CPQ
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To: Mao II who wrote (2873)7/12/1999 11:30:00 AM
From: Kenya AA  Read Replies (1) of 12662
 
M2: FWIW, sounds like Cramer agrees with you.

<ggg>

K

Steeling the Net Against Outages
By James J. Cramer

7/12/99 11:00 AM ET


When you hear eBay (EBAY:Nasdaq) outage or E*Trade (EGRP:Nasdaq) outage or anything outage, immediately think Net Achilles heel. Amazing, but these Net stocks trade to the upside like great growth vehicles, but they trade to the downside like steel stocks.

I can't tell you how many times I would be taking a big position in Bethlehem Steel (BS:NYSE), huge mega-sizers, and everything would be looking all systems go, and boom, they would have a relining outage or a problem in some cold-rolled steel plant that would cause them to miss, and BS would just roll over.

I would then be buried alive in BS!

That's how the Net is trading right now. Here's the mindset as I see it: "eBay outage? Heck, sell the darn thing. Sell all of 'em -- they could all have outages. Who can take the chance that my Net company has an outage? Get me out of the Net and into some company that benefits from Net outages."

Is it any wonder that Sun Micro (SUNW:Nasdaq) is up while eBay is down?

I don't want to tell you what finally happened to stocks like BS. Nobody wanted them. That's why it is imperative that the money be spent to avoid the outages, even if it crimps short-term profitability. The whole sector gets pole-axed by this stuff.


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