Cramer sums up the situation with Tech this week.
Can't always agree with everything he says but this article is right on, imho. 3 days to unload technology stocks thanks to mutual fund buying.
Take Tech Back Where You Bought It
By James J. Cramer
02/25/2002 05:39 PM EST
Three days left to this shortened month and you can bet that the mutual funds that are stuck in tech are going to play the life-or-death game of moving these suckers up again.
For those of you who are sitting on a boatload of tech, this is your chance to exit this overvalued group and put the money to work in other hard-hit sectors, where the fundamentals are coming back faster than in tech.
I know that such advice flies flat in the face of those analysts who just upgraded Xilinx (XLNX:Nasdaq - news - commentary - research - analysis), Sun Micro (SUNW:Nasdaq - news - commentary - research - analysis) and EMC (symbol:NYSE - news - commentary - research - analysis). I know that those who people who think that tech is the future think that selling tech here, right here, is heresy.
Let's put the tech case mathematically. I am not calling for an underweighting in tech, although I think if you only own three or four stocks, one of them need not be tech. Tech represents 20% of the S&P 500 but represents a far greater amount than that for many of the favorite funds and for many investors. You are being given this magnificent opportunity at the end of this dismal month to get out of tech at a higher price than you deserve.
Or to put simply, you can take back tech to the store you bought it at and while you won't get what you paid for, you are going to get substantially more than you could have gotten last week, and that you most likely can get next week.
It is funny. This call, to sell tech, which I have been giving now for ages, is still the thing that makes most people angry with my writings. As long as that is the case, I am going to keep it up. Again, I don't blame you. There are so many tech funds and so many reporters covering tech that you really do feel like you are missing out on something if you are not in it.
And you are: you are missing out on the fabulous gains on the New York Stock Exchange, where most of the nontech trades!!!
Random musings: Terrific day that was constrained by the machines. So many people are convinced that we are about to enter a dangerous time for the market that I wonder if we haven't seen the worst all ready this year for the nontech stuff. I have no doubt that there is more pain ahead in tech. ... Radio show felt great. I am reading a ton of emails so please, please email me at radio.feedback@thestreet.com if you can't get through on 1-800-862-8686. And welcome New York to the RealMoney world! ... I thought that the Gap Stores (GPS:NYSE - news - commentary - research - analysis) article in The New York Times this weekend was a little naïve. The simple fact is that GAP has to shut a lot of capacity. I don't think that the debt-holders are going to be too crazy about that. But then again, haven't the debt holders taken on a role that seems, to put it simply, almost charitable in its disregard for the real worries. Many of the companies that have taken down huge credit lines are in no position to be able to repay that money now. Of course, hope springs eternal and maybe things are going to get so good in the economy that all will be forgiven. If you are a bondholder, though, big deal! All you do is get your money back!!! That's a crummy risk reward if there ever were one. ... Don't forget to watch Doug Kass from RealMoney Pro on CNBC's "America Now" tonight. That site rocks and I find myself going to it dozens of times a day. If you are a pro, if you are managing other people's money, you need to get RealMoney Pro. Email steve.miller@thestreet.com today if you don't understand how to make soft commission dollars pay for your subscription.
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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. 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, h |
