TheStreet.com's Jim Cramer says a comment by the Cisco CEO about systems spending caused more damage than it should have.Everyone thinks we lost tech. That's because everyone was hiding in tech. They thought it was "safe."
Perhaps we confused tech with Coke (NYSE: KO) (Cramer's Take) and Pepsi (NYSE: PEP) (Cramer's Take).
First, the root cause of all of this is the somewhat off-handed comment about how the financial services industry has cut back on spending for systems.
We never want to hear any company say anything about spending cuts by customers. It is intriguing that the only place where spending was hit was by these customers. It was enough to kill all tech, though.
Is it right? If tech hadn't been so hyped and if tech wasn't so linked to financial services, I don't know how much we would be down.
I do know this. These stocks are all being taken out and shot on Chambers' comments.
Oh, and it doesn't help that the best ad-serving technology out there, Quigo, just got bought by AOL in a very smart move, thereby hampering the Google (NASDAQ: GOOG) (Cramer's Take) case, which had been one of the best in tech.
I think that is an overreaction, of course. But we are no longer in earnings season, so the defenses won't come easy. You can't expect other tech firms to come out and say, "Chambers is wrong," because he isn't.
To me, what you have to do is decide whether every other tech company is as beholden to this particular part of the business.
Or, to get less emotional about it, is Cisco (NASDAQ: CSCO) (Cramer's Take) Caterpillar (NYSE: CAT) (Cramer's Take), which is uniquely levered to housing, and are we selling Emerson (NYSE: EMR) (Cramer's Take), Eaton (NYSE: ETN) (Cramer's Take) and Parker Hannifin (NYSE: PH) (Cramer's Take) (52-week high) because of it? Are we selling Ingersoll (NYSE: IR) (Cramer's Take), which has gone out of its way to say it isn't CAT, because of it?
I would try to find the stocks in tech that have less exposure: Intel (NASDAQ: INTC) (Cramer's Take), Corning (NYSE: GLW) (Cramer's Take), Hewlett-Packard (NYSE: HPQ) (Cramer's Take), Microsoft (NASDAQ: MSFT) (Cramer's Take) and Apple (NASDAQ: AAPL) (Cramer's Take) say, and watch them as test cases to see when we bottom.
Only after we catch a bottom in those can we safely wade in the water.
Watch and wait. Because right now the innocent are all guilty. We need to be sure who isn't, before we can pull the trigger.
Jim 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. At the time of publication, Cramer was long Caterpillar and Hewlett-Packard.
RELATED LINKS
Five Dumbest Things on Wall Street
Jim Cramer's Portfolios of the Week











Reader Comments (Page 1 of 2)
11-09-2007 @ 9:15AM
sliber said...
"If tech hadn't been so hyped..."
BUT YOU WERE THE ONE HYPING IT!
11-09-2007 @ 9:43AM
Steven Danis said...
To believe Mr. Cramer's comments above is to believe that a head of a major and quite successful tech company, Cisco, knows less about general business conditions in his industry than a talking head on a TV show.
11-09-2007 @ 9:47AM
Larry said...
Wake up Cramer...This market is headed down into a correction.
11-09-2007 @ 9:53AM
John Lysek said...
Even I saw MACD turn negative on the Dow three weeks ago when Cramer wanted to buy everything...amazed anybody listens to him.
11-09-2007 @ 9:55AM
Harry said...
Look at the economic FACTS:
The dollar is the weakest in decades, credit problems are bombing major banks, oil is around $100 predicting major gasoline price increases soon, housing is literally frozen and falling, grocery and energy prices are soaring,, medical costs are jumping, manufacturing jobs continue to go overseas and the huge illegal alien problem remains ...
...and we have a $12 BILLION A MONTH war full of corruption that we can't seem to win.
Whoever thought this would happen during a Republican Administration ???
11-09-2007 @ 12:09PM
MoBill122 said...
Market is 1000 points DOWN from this years high, yet no one is talking much about that.
11-09-2007 @ 1:45PM
Carl Bergantz said...
I told my son last Monday to stay away from Cisco. He said their earnings were going to be great. I told him all they had to do was put tape over Chamber's mouth and the stock would do well...however I know how Chambers could screw up everything even if Cisco reported 100% earnings. He ALWAYS says too much. He is the most negative CEO I have ever seen. He probably sells a lot of stock before each quarterly report!!
11-09-2007 @ 1:48PM
Roy said...
But the Nasdaq is still up a bit over 9% for the year so long term investors are ok. It obvious since Cisco CEO remarks had more effect than they should have that people are worried about what they can't see like how much subprime debt is out there and then add in the problems they can see like the falling dollar and you got very nervous traders. The question becomes how low will the market go until those with piles of cash jump in?
With the dollar going down the stock market itself becomes attractive to foreigners. When the market get so low that it attracts foreigners in large quantiity? That will be the bottom of the market. Roy H.
11-09-2007 @ 2:17PM
Mark said...
All boats go up with a rising tide...and all boats go down with a sinking tide...
11-09-2007 @ 2:21PM
Mort said...
With the dollar continuing to fall, the Euro looks awfully appealing...
11-09-2007 @ 2:41PM
joe said...
Who didn't see this coming when this country has spent the last five years growing a false economy built on mistaken hype and leveraged spending.
We're ending exactly where we began at the turn of the 20 century with billionaire money men bullying the government for personal wealth.
Call us the Deflated States of America
11-09-2007 @ 2:51PM
Ron said...
Be very careful and extremely cautious with Cramer and his recommendations............remember he is a salesman, its his job to promote stock and continue his prosperous TV show. You might be better off with a dart board and darts to make your picks. Contact me if you wish to invest in some ocean front property in Arizona.
11-09-2007 @ 4:30PM
Steve said...
While sometimes Cramer may give a bad recommendation, I think that if you listen to his reasoning, that one can learn some very good stock trading market principles. I like that! His macro economic ideas and suggestions are good for trading, but often not good for a long term U.S. economic strength.
11-09-2007 @ 5:09PM
kluji said...
Cramer is a scam....ive been trading the markets going on 30 years now. He is the dorfman of the 70's 80's era.....Cramer led all the sheep off a cliff in 1999/2000 and then gave a teary eyed apology after all his followers lost everything. Worst yet is that he is back at it. If he was any good at trading he would NOT have to be on tv or have followers paying him. Do yourself a favor and go get a nice safe secure CD for 4 or 5 percent. 4 or 5 percent on a cd is going to look great compared to 20, 30 40, 50 percent losses following Cramers advice. Just my opinion!
11-09-2007 @ 11:40PM
Lebong said...
"Creamer" adds the spices to all that we buy in the stock market, but taste a piece of boiled meat or chicken without any spice and you will dump it faster than wall street dumped the sower apples and spiceless Tech-stocks taday 11-09-07.
11-10-2007 @ 12:26AM
John said...
Well I listen to Cramer for 7 months and I made around 37% on my stocks ! I would FLUSH my money before I would buy a stupid cd for 5 % . My son even has more brains than buying a stupid bank cd ! He buys real silver and gold ! Great investment !
Pllllllossssssseeee !
11-10-2007 @ 9:06PM
jay said...
Cramer. Have all the books. Watch the show daily. But on 10.31.07 you said, "don't over think the market, for now, buy anything". Where do we go now with Bidu and Google at this point?
Thanks
Jay
11-12-2007 @ 4:53PM
James said...
Have you heard of MMFX Steel? If so do you think they would be a good company to invest with?
11-13-2007 @ 11:02AM
James said...
Have you heard of MMFX Steel. If you have do you think this would be a great company to invest with?
11-13-2007 @ 11:03AM
James said...
Have you heard of MMFX Steel. If you have do you think this would bea great company to invest with?