Optical Plays: The Next Group to Get
Hammered
By James J. Cramer
12/15/00 2:11 PM ET
Uh oh, optical plays continue to get written about as being
great opportunities as I open the reports of many of the
tech mutual fund managers I have money with. They are
all loved. They have to be bought because of the "great
secular" story of optical build-up.
That' s just plain stupid.
That's just plain stupid.
That's just plain stupid.
I wrote that three times because sometimes people skip over things on the Web.
These build-outs are all slowing. The demand is
slowing. The money for them is now hard to get.
Worse, some of the good optical plays have big
lock-up expirations where venture capitalists who
paid pennies per share have chances to bail from
them. They will. They have to. They can't believe
how poorly they are doing away from optical and
they will take the gains as long as they still have
gains.
I was reading some interview this morning with
Kevin Landis, the Firsthand's guy, in Investor's
Business Daily, and it was typical of the kind of Panglossian nonsense that these fund
managers spew out these days. Everything is just fine in that world, Landis insists. He
is loaded for bear with them. And Landis is one of the good guys!
When the semiconductor world was unraveling, I backed Jon Joseph's call to get out
of the group. I took a lot of heat here. I didn't want to open my mailbox. I was too timid
in retrospect because of that heat.
So I am making up for it now with the next group that could be hammered. And the
declines you have seen do not qualify as hammered.
These stocks will bounce. They are too loved by portfolio managers not to. They
should be sold when they bounce. They should be sold when they don't bounce, too,
but I am hopeful that we see some sort of move up so you can sell into strength
instead of weakness.
And ignore those who tell you all is well in this optical business. If I were a
proctologist, I would make house calls to these managers to extricate their brains
before it's too late to help them. |
