Cramer on Tech sector stocks: “Tech’s awful.” |
Loading ...A break from my unannounced blog vacation to share financial analyst Jim Cramer’s comments on the tech sector:
Reluctantly I have to conclude that this is a group that on strength has to be sold. Anything I own that has tech has been killing me for Action Alerts PLUS.
Looking at my own tech portfolio holdings I’m seeing the following results lately:
AAPL (Apple) - down from high of $202 at end of 2007 to $129 today
GOOG (Google) - down from $747 near Halloween 2007 to $506
IACI (ask.com) - down from $30 in October 2007 to $24
VCLK (Valueclick) - down from $28 in October 2007 to $22
YHOO (Yahoo!) - UP from $19 to $31 on possible Microsoft acquisition, but down from $34 in October 2007.
Ironic that Cramer is famous for saying ‘bOOyah!’ and yet many of these tech stocks receive a ghostly boo since Halloween time. Google is among the worst performers since cresting the 666.66 mark. If I was more supernatural inclined, I’d say the big G was cursed, but a lot of the market has been miserable lately.
Despite the performance, I’m holding all my technology stocks for the time being.
What stock sectors to invest in during these troubled times?
I’ve been listening to CNBC on Sirius a lot more lately and reading a ton of information online trying to get educated on good buys and companies and markets to stay away from.
If tech isn’t any good, then what else? The million dollar question. Some gurus are suggesting the financial markets could be one good place to look. I sold NLY (Annaly Capital Management, Inc.) yesterday at a decent profit and am trying to decide what to buy next. I might go back and buy more NLY because this is a company that benefits when the feds cut the rates. If more cuts are on the way as some are speculating, NLY could continue to be a good stock to have.
What about new money to invest?
When the insurance money for my stolen tablet PC was received recently, I stuck it in our money market account which is currently paying 3.97%. Briefly considered adding to my Zecco account and buying some more stocks with it in the interim while deciding what computer to buy as a replacement, but the market is too uncertain for me to invest any new money at this time. Also considered putting in our mutual funds but those accounts are down too.
Where are you investing new money these days? In a holding pattern while the market corrects? Using your savings and money market accounts more?
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Cramer is a moron. Investors shouldn’t listen to him. They are much better off buying well run companies and holding on for the long term. If you look at the stocks that are getting pummeled, it’s the large cap fast money positions that are being abused. This should tell you something about the conditions of the hedge funds who have been speculating on these names for so long.
Ironically, the crappy little small caps that have been underperforming are actually going up as the hedge funds cover their shorts on the small stocks. Look at the performance of stocks like OSTK, TIVO or IRBT during the credit crunch last summer and you can see this effect.
Right now, I like Lojack (LOJN) a lot. Their stock has been hammered on auto slow down concerns, but I think people have underestimated the appeal of being able to track down your stolen laptop. I also like Calamos (CLMS). Their assets under management will decline with the market, but should also recover during better economic times. Their funds did great during the last bear market and I bet that they are getting some real bargains in the convertible bond market right now. I could of tried to call the bottom on this one and waited a bit longer to invest, but I see this recent weakness as a way to get into some stocks that will likely be too expensive during the next bull market. I may end up waiting or taking a loss in the near term, but Calamos runs a great shop and I’ve got confidence in the long term future of the company. Finally, I like Interdigital (IDCC). I haven’t invested in this one because they are a patent troll, but I can’t argue with their economics. With about $200 million in very high gross margin (85+%) revenue each year, the company has the opposite problem of a lot of the cash strapped banks. Add to this two recent $200+ million judgment decisions, a third possible lawsuit settlement in the wings, a massive buyback, and $20 - $30 million in revenue when Apple announces 3G support and I think you have a winner regardless of how the economy turns out. These companies won’t make you any fast money and I doubt that you’ll ever hear Cramer pumping them on his show, but I think that by focusing on some of the lessor known companies, that you can out perform the day traders who have to come up with a new idea each day, in order to keep churning their accounts.
Comment by Davis Freeberg — February 6, 2008 @ 9:11 am PST
I think Cramer is pretty good entertainment but as for his accuracy, I have only followed one stock that he bought into: NLY and did good on that one. Anybody can get lucky and pick one stock so I’m not convinced following his advice is a good strategy.
I’ll check out the others you mentioned, Davis, thanks
Comment by TDavid — February 6, 2008 @ 9:22 am PST
Google is a great investment here in my opinion. What will happen in the next 6 months I really have little idea. 5 years from now I think the odds are high for a very good return.
Comment by John Hunter — February 6, 2008 @ 4:04 pm PST
Whether now is a good buying time or not, depends upon your intention. If you are buying for the short term and looking to sell, it is probably not a good time to buy. But if your intention is to hold long term, it is a good time. So it is always relative to what you plan to do.
Comment by Kevin — February 9, 2008 @ 3:53 pm PST