At first glance it might seem insane to buy and sell stocks based on what month of the year we happen to be in. In theory, it's hard to make a reasonable case that the calendar controls stocks. But in practice, at least when it comes to tech stocks, the calendar matters.
As Cramer mentioned on Monday night's edition of Mad Money, tech stocks have unperformed the rest of the market from February until the fall for 17 out of the last 18 years. And for 17 out of the last 18 years those same tech stocks have tended to outperform starting at the end of the third quarter or the beginning of the fourth, and continuing on through January.
This is something we've talked about every year from the show's inception, including the 2005 "Cramer tech rally" in the gadget stocks and everything that goes into them. Obviously this isn't true for all tech all of the time. The Four Horsemen of the Tech Apocalypse, Apple, Google, Research in Motion and Amazon.com, are all stocks that thrive at the expense of their competitors. They can work when the rest of tech is seasonally out of style. Like Eli Wallach and Steve McQueen in The Magnificent Seven, these companies are in the same business as the rest of tech, but only as competitors.
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For the rest of the sector, in general, you want to obey the calendar. Tech is all about product cycles. And even though we know many of these companies tend to have their best sales in back to school season or during the holidays beforehand, the stocks have still outperformed historically during that time period. And they've underperformed starting about where we are now.
Unless you've got a powerful thesis for owning a particular tech stock, learn from history and don't try to fight the calendar.
Cliff Mason is the Senior Writer of CNBC's Mad Money w/Jim Cramer, and has been that program's primary writer, in cooperation with and under the supervision of Jim Cramer, since he began at CNBC as an intern during the summer of 2005. Mason was the author of a column at TheStreet.com during 2007, which he describes as "hilarious, if short-lived." He graduated from Harvard College in 2007. It was at Harvard that Mason learned to multi-task, mastering the art of seeming to pay attention to professors while writing scripts for Mad Money. Mason has co-written two books with Jim Cramer: Jim Cramer's Mad Money: Watch TV, Get Richand Stay Mad For Life: Get Rich, Stay Rich (Make Your Kids Even Richer). He is 100% responsible for any parts of either book that you did not like.
Mason has also had a fruitful relationship with Jim Cramer as his nephew for the last 23 years and will hopefully continue to hold that position for many more as long as he doesn't do anything to get himself kicked out of the family.
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