[Beginning of Cramer's verbatim comments for this segment...]

Jim:           While other people were having the time of their lives this weekend... munching on Doritos... glued to their HDTV sets... watching the SuperBowl... I was curled up, fetal position-like, reading transcripts of conference calls, looking for patterns, searching for a broader theme... hunting... hunting for something that could overwhelm the prevailing nonsense of that Greek credit default swaps, dollar-yen carry trades, and the downfall of the euro, control of all thought patterns... Nonsense that, once again, played havoc with our markets, as the Dow shed 103 points, and the S&P gave up a percent...

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Sure enough! I found it... right in front of me... in my socks drawer of all places! A subject so purloined as to make Edgar Allen Poe roll over in his grave...

Quote the Raven... Buy some Phila. Semiconductor Sector Index (^SOX)!...

But forget the s-o-c-k-s... I am talking about the wondrous Philadelphia Semiconductor Index... which is the repository of many companies that, right at this very minute, are having a renaissance... one of the most amazing that I can recall.

But, judging from the lackluster reaction these stocks have had after their incredible quarters... nobody cares. So, tonight, in the interest of actually trying to help you make some money in a really down, crummy day, I'm going to make you care.

First, to fully comprehend the importance of what's happening with the semiconductor companies, you must understand two arcane investing concepts: cyclical and secular!

These terms describe the kind of growth a company might have... Cyclical is a curse word in our game of stocks... it's a sign of weakness... It refers to a company that is not in control of its own destiny, one that grows according to the slings of arrows of economies around the world. When those economies are good, cyclical stocks go up. When they're bad, the stocks go down.

Secular, on the other hand, means that they have something else going for them besides the economy... a trend that's bigger than anything the business cycle can throw at them. These secular growth companies can trump the noise of a Chinese bust, or a Grecian Formula hairball... and that's why investors will pay a premium for them.

So what does this have to do with the SOX?...

I want to tell you tonight that, after reading and listening to dozens and dozens of conference calls, there is a tremendous disconnect between what the analysts are seeing and what's actually happening when it comes to companies in the Semiconductor Index. Almost every semiconductor company, from Intel (INTC*) and Xilinx (XLNX), to Marvell (MRVL), Cypress Semiconductor (CY), Broadcom (BRCM), Avnet (AVT), Altera (ALTR), Texas Instruments (TXN), and so many others... have reported simply "blow away" numbers... tremendous pin action... just amazing upside surprises... bigger surprises than the 2nd half onside (SuperBowl) kick, frankly, to put things in perspective...

But, in almost every case, the analysts have chosen to view the gains as some sort of cyclical phenomena... The chipmakers are doing well because of the worldwide economic recovery goes the thesis of the analysts, who I think are wrong-headed. They don't recognize them for what they are... the products of a secular trend... where we use more semiconductors in more gadgets... gadgets that are being embraced by emerging middle classes everywhere, from China to India to Latin America... The analysts think that the darn SOX will need darning from the holes that are about to be put in them by an economic downturn.

In reality, the SOX are twice blessed...

Not only are their products being used in tremendous growth vehicles, mostly related to the mobile internet tsunami, a.k.a. the smartphone revolution... which is soon to include a broad expansion of high-def TV on your cellphone... but the potential new customer base. It could amount to roughly a billion people, spotting you 700 million emerging members of the middle class, just in China and India alone.

These people aren't going to let the Chinese construction bubble... which, again, played havoc with our markets, because China was down again today... They're not going to let that get in the way. The construction bubble is some kind of... the subsequent pricking of that Chinese bubble will not stop the incredible growth-oriented middle class of China. If that's the reality, okay, if that's the reality... why don't the analysts see it? Why don't they see what I see? Which is the SOX, on a down day like today... are the place to go? Why don't they see that tech is the place to go? For a good reason... semiconductor use has for a full decade - 2000 to 2010 - been trapped by the business cycle, as there were no secular growth... remember, secular growth has its own thing... no secular growth uses attached to them, no new product cycle use that trumps the whips and scorns of the economy.

But that's not the case anymore...

Those who listened to any of the calls of these semiconductor companies... those who listened to the managements of Xilinx (XLNX), Cypress (CY), and AVT... on our show... could hear that something bigger is afoot... But the analysts... many of whom have been burned, singed before by calling upturns... and some who simply aren't old enough to remember long periods of secular growth associated with their first PCs, their first cellphones, their first web browsers... These people do not believe. They do not believe in this (holding up a "SOX" sign). They just thing this group's ready to roll over.

Frankly, I was skeptical too... not because I haven't been around long enough to know, but because I fell prey to the almost entirely negative view of the analysts community, and because I'm not that positive on stocks in general in 2010, as you know... on account of a broader ugliness, that people don't seem to like stocks anymore...

In fact, I didn't have the true bull SOX case until I sat down... and poured through the Cisco (CSCO*) conference call notes...

Now, Cisco is not a semiconductor company. It is a company that is... that is the backbone of the internet, the plumbing, the connector among the service providers... the customers, the phone companies. On the call, John Chambers, Cisco's CEO... outlined a remarkable demand driver, Web 2.0, that has produced shortages throughout the food chain... And, when he speaks of shortages, he is talking directly about the semiconductors needed to make his product. Throughout the call, he talked about how there's just not enough product out there.

Throughout his call, Chambers made it clear that the turn in Cisco's fortunes has very little to do with the economy... very little to do at all. And we know that because the biggest driver of them all is the United States, where the economy is hardly recovering.

You need to know this! Particularly on down days like today. Why? Because almost all the semiconductor stocks are down big since they reported, courtesy of the oil futures being down, or problems at the Parthenon (referring to market issues in the news today from Athens, Greece)... And yet the reason to like these SOX stocks is precisely because they are secular growth stories that have nothing to do with these distractions.

In other words, like me at Kohl's, you are able to get those SOX on sale at ridiculously-low prices. The difference being that those SOX can appreciate, while the socks I bought from Kohl's lose value the minute they leave the showroom, but not so fast as a Toyota Highlander does...

The Bottom Line!...

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[verbatim recap]

[end of segment]

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Market Results today: Dow:  - 104 Nasdaq:  - 15 S&P 500:  - 0.01   2 3 4 5 6 See all of tonight's stocks mentioned on Yahoo! Finance, here...