People constantly ask me what I am worried about. I have told you endlessly that I let others worry about the big-think things. I am trying to help you make money and I integrate big think when it can influence my timeframe -- usually medium -- to make money.
But one thing I am definitely concerned about is the price of certain commodity parts of the food chain, specifically flash and DRAMs. I don't like the way that Western Digital (WDC) was so determined to get control of Toshiba's semiconductor group because I think WDC would like to keep the price of flash high. Apple (AAPL) , on the other hand, is in league with Bain to buy the semi group and it needs parts prices, including flash, much lower. (Apple is part of TheStreet's Action Alerts PLUS portfolio.)
At the same time, when I listened last week to HP's (HPE) remarkable analyst day, I was struck by the fact that DRAM prices are still way too elevated. It makes no sense that they can stay this elevated without someone coming up with a better technology that is cheaper.
It's with that thinking in mind that I have to be concerned that Lam Research (LRCX) , which reports tonight, might be putting up great numbers, but if I think both flash and DRAMs could roll over, I don't want to be in that stock for the report.
I know the last time Lam reported, it blew the numbers away and the stock got killed. On last week's game plan on Mad Money, I said the same thing could happen again. I am writing right now to remind you that I think Lam could be too high and that the selloff will occur again, and I don't want you to get hurt if you own it.
So I am saying it's good to take profits in Lam ahead of the quarter, going against the Merrill Lynch upgrade today.
I repeat, this is not a radical position. If Lam does what it did last time, you will wish you sold. The stock is up 83% for the year. That's too much.
I think you should ring the register. We can revisit lower if it turns out that my view of flash and DRAM pricing is wrong.
But I keep thinking about what happens when Apple gets that Toshiba business and how it will kill the price of flash. I keep hearing that it is only a matter of time before DRAMs trade down. We already know that disk drives -- more antediluvian tech, admittedly -- have crashed already.
So don't take any chances. Take profits: Lam.
Join Jim Cramer, CNBC's Jon Najarian and Other Experts Oct. 28 in New York
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Cost: $250 per person.
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