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Fleeing the Nazz

Jim Cramer

11/28/00 - 04:31 PM EST
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The money continues to pour into the S&P index funds and you are seeing the results of it in the prices today. American Express(AXP Quote - Cramer on AXP - Stock Picks), General Electric(GE Quote - Cramer on GE - Stock Picks) and the drugs, all big S&P names, are getting money in. The tech names that populate the S&P are getting money in, too, but not enough to offset the declines from the money being taken out of the science and technology funds.

A lot of people think the money has to come back to the Nazz. They don't realize that it is the Nazz they are fleeing. The two-point rallies in Johnson & Johnson(JNJ Quote - Cramer on JNJ - Stock Picks) and American Express and the one-point rally in Wal-Mart (WMT Quote - Cramer on WMT - Stock Picks) are reactions to the Nazz decline. And I don't think it can reverse itself so easily. Here's why, as one of our readers reports:

My wife recently received a letter from her science and technology mutual fund. They are making a 15% long-term capital gain distribution on 12/15. But the fund is down 30% year to date! My immediate advice to her is to SELL!!!! Take the loss, avoid the wash sales rules and plow it back in late December.

There, that's the money that's on the sidelines. Sure, it can come in. But it won't come in time to bail people out who are hoping right now for a rally.

Random musings: Many of you are taking time out from your busy days to thank me and Todd for helping during this difficult period. You are telling us how much you have saved by being a little more cautious. Save the kudos, and instead give the gift of RealMoney.com to others. That's what I need to hear. Click here for the gift subscription URL.