The Tech Recession Is Just Beginning
By James J. Cramer
02/28/2002 15:32
Tech doesn't have the horses. I know I can say it until I turn blue, but let me tell you what I think is going on.
Right now, at this very moment, when it looks like we are getting out of a recession, there is a strong case to be made that the tech recession is just beginning.
Since the beginning of the year we have seen downticks, some serious downticks, in cell phones, personal computers, storage, networking and, of course, contract manufacturing. We have seen a further, dramatic scaleback in capital expenditures for phone companies, and I expect more of those as the year goes on.
That's happening even though the rest of the economy is definitely strong: autos, housing, retail and capital goods ex-tech.
This is an incredible disconnect with what so many people were thinking when this year began. It is why there are such massive declines in favorites and why there are probably more coming.
This tech recession not only shows no signs of ending, it seems to be getting worse, with the idea that it is finally getting to the Emulexes EMLX and the Brocades BRCD of the world, the last vestige of strength.
I know, I know, inventories are low. I know, I know, it is a seasonably weak period for orders.
But consider this: Next month, March, I always sold tech at my old job! It was always the month that I bolted ahead of the summer doldrums.
News flash: March starts tomorrow. |
