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Strategies & Market Trends : Zeev's Turnips - No Politics
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To: Steve Lee who started this subject3/22/2002 3:48:31 PM
From: Softechie  Read Replies (1) of 99280
 
Overpriced Techs Reaching the End of Their Ropes
By James J. Cramer
03/22/2002 14:59

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The Brocades BRCD and the Emulexes EMLX and the QLogics QLGC are struggling after a couple of up days. That's intriguing because we are near the end of the quarter and these stocks are always marked up by the firms that own them.

Have the firms decided not to support these stocks this time around? Have they finally realized that as great as these companies are, they are hopelessly overvalued and won't have a big run from here?

I watch these stocks because they represent the last relic of the crazy era, they still sell at a jillion times earnings and they are still excellent companies that are ridiculously expensive. Typically, they trade up into the end of the quarter.

Here's what I am thinking: These stocks are at the end of their tethers. They couldn't break out this year, and now they are truly going to break down, even as the analysts all still love them.

Last autumn after they were in free fall, they were the first to bounce, even before the semiconductor-equipment stocks. I really think that if the markup artists come back and push these stocks early next week, you should hit the exit button right into them.

Random musings: Take advantage of the rare chance to pick my brain -- something I ordinarily resist -- at our hedge fund conference , coming up soon in Miami. Join me, Doug Kass, and a bunch of other seasoned players to learn everything you need to know to run a successful hedge fund
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