A mania of sorts took hold regarding VMWare's shares during the recent economic expansion, with the Street pushing shares above $110 in late 2007. Of course, Wall Street corrected that mania with an equally irrational fear, driving shares down to the high-teens when the financial crisis took hold in October 2008.

So where's the reality for this business model driven by virtualization software? IT spending will decline in F2009, but VMW should be able to navigate through the shallow waters, guided by wider corporate adoption of the company's virtualization products. The First Call FY2009/FY2010 EPS estimates for VMW are 92 cents to $1.06.

Other positives: VMWare's balance sheet is solid, with $2 billion in cash, and minimal debt. No investor should expect a quick return trip to $100 with VMW, but F2010 should see the reappearance of results exceeding expectations, sans the mania, thank you. VMWare's stock also has strong technical support in the $20-22 range.

Stock Analysis: VMWare is a moderate-risk stock. Consider buying a 25% position in VMW now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your VMW position in the first half of 2009. Sell/Stop Loss if you were to buy shares in this company: $14.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.