Greenberg. I* will go to zero (see below)
COMMENTARY >> WRONG! REAR ECHELON REVELATIONS
The Show Goes On
By James J. Cramer
7/18/99 4:31 PM ET
OK, it was a rockin' show. Like everything else we try to do
at TheStreet.com, we tried to help YOU make money. It was
too substantive a show to just forget about, so let me give
you a description of how I would have made money watching
it at home.
We started out with Ken Schapiro from Condor Capital
getting drilled by Brenda, Herb and me on three stocks:
AT&T (T:NYSE), Merck (MRK:NYSE) and Xerox
(XRX:NYSE). Schapiro's a solid money manager who has
appeared on "Taking Stock" a bunch of times on CNBC. (Uh
oh, I hope his helping us doesn't hurt him with CNBC.com,
as I know those guys are gunning for us.) I don't know if he
was ready for the kind of .55 caliber, steel-jacketed bullets
we were firing at him -- yep, it wasn't your usual soft-pitch
show -- but he seemed to have a lot of conviction for his
names. He talked about the giant drugs Merck has in the
pipeline and how the stock is trading cheaper than it would
be if it weren't for Medicare worries. I didn't see much there
because, frankly, I am not blown away by their pipeline, but
Merck has great management and can't be ruled out as an
investment.
Then we went on to AT&T. I am long the darn thing and think
it trades like a dog, as one municipality after another seems
to adopt AOL's (AOL:NYSE) open-access rap, something
that would make buying cable a pretty stupid investment if it
keeps winning. And AT&T has bought a lot of cable. His
defense, thinking longer-term, didn't wash with me, and, if
Berko weren't thinking this could be a big stock down the
road, I would dump it.
We didn't give Ken enough time to defend Xerox, other than
to say that international sales pessimism has created an
opportunity here as the stock's not cheap. I think at $55, I
would be a buyer.
Then Herb and I were broomed for a few minutes, and
Lashinsky faced off against Gary B. for some knock-out TV.
This is by far the best segment in my judgment, as these
two guys showed clear conviction and articulated the pros
and cons fantastically.
First Chartman Gary B. tried to make a case that AOL's
chart says buy. All I can say is the last two times I heard
Gary B. talk about this one, he nailed it and I was glad I was
long. Adam blasted AOL with the expensive per-subscriber
rap and the open-access boogie man. Didn't shake me out of
it.
Then they went to work on eBay. GBS says eBay equals
oy-vey in his book and urged sale. He talked about a $50
price target. Adam talked about 750 million reasons to be
long: the $750 million it raised in a gonzo secondary offering.
That was enough to freak me out if I were short it. Advantage
Adam.
Then Herb and I came back out with Brenda and Dave
Kansas, our editor-in-chief.
(Make no bones about it, I love Kansas. One day, when the
stories of this great young institution, TheStreet.com, are
told, you will all come to realize that this nonpromotional
midwesterner with the funny hair -- I know, at least he has
some -- is the reason why we will one day dominate the
Web around the world for financial news. Heck, he is the
reason why we are in business today. Two years ago this
week, when we were bleeding from the eyeballs and I didn't
know what to do with TheStreet.com, he made his case to
me and the Trading Goddess to keep TSC alive because
he believed we could be the best journalism on the Web. He
has fulfilled his pledge. Now he wants to do the same with
TV and, after seeing the results of this first effort, I believe he
will.)
So we all mixed it up. First we tackled the Microsoft.com
tracking stock and Herb made me eat my words that all
tracking stocks are bad because I admitted I would be a
buyer of this one. The difference, as Dave pointed out, it that
Microsoft's management is so great that you want to buy
any stock they issue, including a tracking stock.
Then we talked about whether Coke (KO:NYSE) was a buy.
Herb was positively inclined, which almost made me fall out
of my chair. I talked about how these guys are like Brutus;
the fault is not in the monsoons or bad weather or
bad-smelling Coke or unrest, but in themselves.
Management doesn't know what it is doing. (Of course, the
Brutus thing came to me after the taping, but that's the way
it is sometimes.)
Finally, Dave talked about how senseless and stupid it is to
try to follow what Fidelity is up to, in this case with its AOL
position, because you really have no way of knowing that the
firm is really doing. We all agreed.
Right before we left we made some predictions. It was like
everything else with TheStreet.com: If you try to weasel, you
will get hosed. We are approaching this like sports, not
news. You can and will see our records after every show.
I said Applied Materials (AMAT:Nasdaq) and Novellus
(NVLS:Nasdaq) are in a foot race to One Hundo and my
money was on Novellus, even though AMAT is three points
ahead. I said you didn't need the points. This prediction
could juice because NVLS reports Monday. (Told you we are
trying to do something substantive here.) Herb predicted that
Iridium (IRID:Nasdaq) goes to zero on a bankruptcy filing.
Kansas went with a relatively safe one: Mister Softee
(MSFT:Nasdaq) has good numbers and ignites another bull
leg to the market.
I didn't want the show to end. Even though it was Friday
night after a long week, I just wanted to sit there and talk
with these guys about stocks. Heck, we should have kept
the camera rolling as we went to a bar afterward for more
stock talk. It was so darned exciting. Herb is really the Herb
you see. He is worried about my bullishness. Lashinsky is a
bulldog who wants to break news more than any newsperson
I can recall. Dave, well, Dave is about getting fired up and
mixing it up. And telling the truth. Brenda kept us all honest,
while functioning as an anchor with a special talent to know
how to keep things rolling.
There were a few unsung people Friday night. One is Gary
Schreier, our producer who simply wanted to put on the
most honest, best and informative business program I have
ever seen. Having done a lot of TV during the last few years,
I can tell you that Gary is not going to be stopped until
everyone watches our show -- because to not do so would
be financial suicide. I can't tell you how many times he told
me to be exactly as I would at Cramer Berkowitz, which, in
the end is exactly how I was and will be. I also want to
express my gratitude to Jamie Heller and Beth Ailes, both
of whom made the show as strong as possible with great
ideas and suggestions.
The other guy I want to thank is Roger Ailes, the head of Fox
News Channel. After being treated like a miserable beast of
burden by the managements of two other networks, how
refreshing it was to be treated like, well, a human being. For
that guy, heck, I'm giving the best show I got. So is
everybody else.
And we did. Until next week.
James J. Cramer is manager of a hedge fund and
co-founder of TheStreet.com. At time of publication, his
fund was long AT&T, AOL, Microsoft and Novellus. His fund
often buys and sells securities that are the subject of his
columns, both before and after the columns are published,
and the positions that his fund takes may change at any
time. Under no circumstances does the information in this
column represent a recommendation to buy or sell stocks.
Cramer's writings provide insights into the dynamics of
money management and are not a solicitation for
transactions. While he cannot provide investment advice or
recommendations, he invites you to comment on his column
at jjcletters@thestreet.com. |
