This column is about Compaq but there's a little jab at Rambus near the end:
(disclosure, I'm short CPQ and RMBS)
Watching Compaq
By James J. Cramer
3/28/99 8:14 PM ET
To preannounce or not to preannounce, that is Compaq's (CPQ:NYSE) question.
Compaq's meeting this week looms like a Federal Reserve session in an overheated economy. Is there anyway anything good can come of it? My answer is yes: because either way I want to buy some tech off this meeting. Everybody knows that personal computers were crummy in January and February.
The fact that we have gotten this far into March without Compaq, Gateway (GTW:NYSE), Seagate (SEG:NYSE), Quantum (QNTM:Nasdaq) or any of the other parts makers blowing up may actually bode well for the group. March may have marked an upturn in the fortunes of personal computers.
Plus, I am through with the days when Compaq is an adequate benchmark for personal computers.
First, they bought Digital Equipment, an entirely problematic acquisition that may make Compaq less of a bellwether for the industry than it ever has been.
Second, the industry itself is so fractured as to make it impossible for one to bring down all. Third, and most important, as I have said many times in these columns, tech is bigger than personal computers. It is entirely possible that things could be smoking at Lucent (LC:NYSE) or at Cisco (CSCO:Nasdaq) -- I sure hope so, because I am long the latter -- and nothing be happening at Compaq.
Last week's pollution of Inacom (ICO:NYSE) and SCI (SCI:NYSE) were perfect examples of how these streams no longer determine the shape, course or taste of the ultimate tech river.
In fact, it is the fault of those lazy editors who insist on using cliches like "tech heavy Nasdaq" that we are lulled into thinking that as Compaq goes, so goes the industry.
We saw the absurdity of all of this mindless lumping together this week past when talking heads wrote off the industry because of blowups at Read-Rite (RDRT:Nasdaq) and Hutch (HTCH:Nasdaq). That's like saying as Vermont goes, so goes New Hampshire. (Don't you wish sometimes that you could grab these reporters by the nape of the neck and say, "Do you even know what Read-Rite does?)
So, keep your mind open this week. If Compaq says things aren't so hot, maybe you should think twice before you sell your IBM (IBM:Nasdaq). And if Compaq says things are great, maybe you should think again before taking some Rambus (RMBS:Nasdaq). It's just more complicated than that. No matter what the press may tell you.
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