Friends Don`t Let Friends Buy Tech - 500 Beiträge pro Seite

[investor_007]

Friends Don`t Let Friends Buy Tech
By James J. Cramer

4/2/01 2:37 PM ET






Click here for the latest from James J. Cramer.

One of our regular readers wrote in this morning to thank us for the "continued pounding on tech and the tech fund managers." He says he saw the light but has pretty much given up trying to tell others that maybe the risk is too high. He mentioned that all he tried to do was to talk someone into making tech 20% of his portfolio. The response was quite frightening:

"Listen, buddy, you got it all wrong. Not only would I not sell a bit of tech, but I am piling in with all available cash. This may be the greatest buying opportunity we will see before we retire. I want to buy more Exodus (EXDS:Nasdaq - news - boards), JDS Uniphase (JDSU:Nasdaq - news - boards), Cisco (CSCO:Nasdaq - news - boards), ADC Telecom (ADCT:Nasdaq - news - boards), Lucent (LU:Nasdaq - news - boards), Nokia (NOK:NYSE - news - boards), Motorola (MOT:NYSE ADR - news - boards) and Intel (INTC:Nasdaq - news - boards). I am even thinking of selling the house, borrowing more at the current rates and putting that into tech. You are nuts to be running the other way. This is it. Train`s leaving the station."

How much I wish this weren`t the case. It is what makes tech a not great long and, at the same time, a not great short. Because people still want in, the stocks are likely just to dry up here as individuals make up for the redemption selling.

That just delays things and draws out the decline. You have to have guys like this guy lose his house before we know for certain that we are where we have to go.

I don`t think this tech market lends itself to good shorting or great longs. Things have come down too much to short and not enough that I feel tech is cheap (witness SOX series, which continually says no bottom yet).

We still have some jokers to wash out, though, don`t we?



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James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com`s sites and serves as an adviser to the company`s CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to [e-mail].

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[investor_007]

No Sugarcoating These Charts
By Gary B. Smith
Special to TheStreet.com
4/4/01 8:24 AM ET








Yesterday was ugly. And that was the good news. The bad news? I believe it`s going to get worse. How do I come to that conclusion? Two reasons.


When I look through the charts, I start with my longs and then go to my shorts. If I see no longs -- and many, many excellent-looking shorts -- that tells me it is not going to be a down day, but a very down day. I made that exact comment Tuesday morning on Columnist Conversation because I saw far more shorts than I get could my hands on.
Again, though, I don`t take all the shorts, but it`s a good signal that the market will continue down. If not that exact day -- there is always the occasional dead-cat bounce -- then it should certainly go down the next day.


As Todd Harrison mentioned, and something I am frustrated the fundies continue to overlook: There is no catalyst on the horizon to get stocks moving up. Shoot, we`re entering earnings warning season, and the Fed is gone for now.
So, unless there`s a surprise, I just don`t see Cisco (CSCO:Nasdaq - news - boards) or some other icon coming forth and saying, "Kidding! All is great now!" Instead all I hear are warnings and "Things are pretty bad."

So, that`s my basis for saying more downside. Could we bounce again? Sure. And I`d use that bounce to get short.

However, there`s another point buried here. Start to develop your own "gut checks" as to which way you think the market will head, and then shade trades to that side. My body actually starts to tingle when I see an overwhelming number of longs or shorts, and I have trouble narrowing down which few trades I`m going to make. My body only tingles a few times a year. Tuesday was one of them.


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Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. At time of publication, he held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Smith writes six technical analysis columns for TheStreet.com each week, including the TSC Technical Forum each weekday, and Technician`s Take once each weekend. While he cannot provide investment advice or recommendations, he invites you to send your feedback to Gary B. Smith.