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Technology Stocks : Winstar Comm. (WCII) -- Ignore unavailable to you. Want to Upgrade?

To: gabor boda who wrote (7718)	8/13/1998 12:12:00 PM
From: Kingpin	Read Replies (2) \| Respond to of 12468

SSB $64, NBMO $97, JEFFRIES $61, CSFB $61, GS $44(?), SB $300 (2001)

To: gabor boda who wrote (7718)	8/13/1998 12:18:00 PM
From: Kingpin	Read Replies (1) \| Respond to of 12468

Wrong! Tactics and Strategies: Let Those Bull-Market Stocks Roam By James J. Cramer 8/12/98 1:05 PM ET You want to know the stupidest thing I have done this year? I fell hard for the competitive local exchange carriers. This group has been killing me. I was up huge and then I stayed in and got slaughtered. I got killed not because of the fundamentals, although they were questionable throughout, but because these are bull-market stocks in a market that suddenly despises bull-market stocks. At any given time there is a group of stocks that begins to defy gravity. I usually know to avoid this cycle the moment my desk is flooded with underwritings from that group. It happened with biotech in the early '90s, when deal after deal came through my office. And it happened in the oil-drilling sector a year and a half ago, when the Friede Goldmans (FGII:Nasdaq) and the National Oilwells (NOI:NYSE) surfaced. This spring was the pump-out time for competitive local exchange carriers, those scrappy runts that skim off all that new voice and data traffic and build plant and equipment with funds borrowed at incredibly high interest rates. They were bull market stocks because they needed the stock market to go up so they could get the cheap financing they needed to grow, and because they needed higher stock prices to buy their competitors. I got suckered into this group big-time. So did others. Everybody lost a lot of money. I am willing to talk about it because (a) it is cathartic, and (b) I don't want it to happen to TSC subscribers. Oddly, I held on to two of them, Metromedia Fiber (MFNX:Nasdaq) and ICG Communications (ICGX:Nasdaq) throughout this period. Well, aren't we at a watershed. Muffinix, or the Muffin, as over-the-counter traders call it, is ramping as I write, because it reported fabulous numbers. Real earnings. Nothing like real earnings to break you out of a bearish cycle. It will be one of a half-dozen stocks in this world that will hit a new high today. But ICG? The one I bought more of at 40 after listening to the president speak on "Squawk Box"? (Talk about the "Squawk Box" effect -- I am a poster child for what not to do.) New low yesterday, down to 23. ICGX doesn't have earnings, it has line growth. It doesn't make money, it loses money. It has management that bought Netcom, the only Internet service provider that has lost value and subscribers during this period, at the top of the market and now has to write the thing down big-time. Why do I hold on to this? Pretty simple: This one is worth more dead than alive. If this industry is to grow like hotcakes, someone has to buy ICGX. If it got a bid now, without me, I would be so jarred psychologically that I don't think I could put my pants on in the morning. But I am violating my own rules when I own stocks for takeovers in declining-earnings situations. And that's the ugly lesson of ICGX. Something I bought for a trade became an investment, then became a bad investment and now sticks out in my portfolio like a sore thumb because I am hoping, unhappily, for something good to happen. Don't let this happen to you. If you are sitting on bull-market stocks, ones that need a strong stock market to recover their value because they do acquisitions with stock, use moments like Wednesday morning to prune them. Sometimes the long-term mantra betrays you and keeps you in situations that are ill-suited for you and your portfolio. Sadly, ICGX is probably going to reach a bottom some day. I hope I am there to see it. But in the tale of two CLEC-types, the best of times came with the one with the fundamentals. Funny how in the end it always works out like that. James J. Cramer is manager of a hedge fund and co-chairman of TheStreet.com. At the time of publication, the fund was long Metromedia Fiber and ICG, though positions can 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 by sending a letter to TheStreet.com at letters@thestreet.com.