Are you a Jim Cramer fan? The bullish and high-energy Cramer takes to the airwaves many an afternoon and night on CNBC to scream "boo-yah" to interested equity buyers and other stock-hungry pedestrians trying to get in on the "next big thing". But, I've witnessed a few times and from friends in the securities industry who have to respond daily to "Cramer-ites" who blindly follow Jim's advice without any research of their own -- trumpeting stocks on a day-to-day basis can actually create the market. In other words, Cramer may not have a "future vision" of some or all of the equities he lauds on his show. It's true that Jim's research (done by his staff) is sound, but are there ulterior motives here?The sheer number of viewers he reaches -- many of which follow his buy or sell recommendations much of the time or even part of the time -- can make the market for a stock, even for the lowly individual investor. This is something I truly believe, although market-makers use many suitable daily vehicles to talk up and talk down stocks for all kinds of profit purposes. You're deluding yourself badly if you don't think this is happening every single day in the marketplace.
That "lowly" individual, when counted en masse, can have an effect on prices. If a few hundred thousands -- or millions -- of shares are sold or bought the day after Cramer makes his thoughts known, that market's irrational response based on a large television viewing audience proves, in this case, the "conformist" wisdom of crowds only. Get in line and punch your ticket without any independent thought or research. Big mistake if you ask me, but in an age where many millions of individual investors follow run-of-the-mill stock tips and do not put in the proper due diligence or research that can affect their financial lives, Cramer can save the day. And, by answering the phone to the moronic telltale sign of booyah. Great, just great.
The logical investor would question Cramer's track record. Cramer, which is a former hedge fund manager (go read what hedge funds are if you don't know), is probably like many of us -- shorting stocks and buying puts and calls all day long, with his own research team at beck and call. The guy's made many small fortunes hedging his bets (no pun intended), and he's brought a










Reader Comments (Page 1 of 9)
9-28-2006 @ 1:25PM
Billy Martin said...
Every stock I bought on Mr. Kramers reccomendation(4) have lost money. I have turned him off!!
Billy Martin
Longview,Texas
9-28-2006 @ 3:24PM
suzanne said...
Jim Cramer offers one perspective on stocks... i take that persepective and add it to my own homework using several different tools available and then make my own decision... i'v been pretty fortunate since i started watching Cramer... however... i don't take his perspective as gospel...
9-28-2006 @ 7:23PM
Mr Wave Theory said...
DivX Inc Gets 20% Boost from TV Mention
posted by MR WAVETHEORY at 9/27/2006 04:27:00 PM
Never overlook the power of TV. One mention from Jim Cramer on Mad Money and DivX is up 20% (+3.50) to close at $21.63. I like Jim's success by association thesis on DivX. You have to love the great sound bites.
Cramer said he's caught an "overlooked IPO" in DivX (DIVX - commentary - Cramer's Take). And he believes that the stock, which has increased almost 17% after its IPO, still has a lot of potential to make people money.
http://mrwavetheory.blogspot.com/2006/09/divx-inc-gets-20-boost-from-tv-mention.html
9-28-2006 @ 9:08PM
Billy West said...
What Brian and many readers fail to understand about Jim Cramer is that Mr. Cramer is a trader by nature not an investor. Unfortunately, Jim is preaching to a mass audience of investors. The two don't mix and quite often, from an investors perspective, many of Jim's calls are not just wrong, they're dead wrong. Indeed, from an investor's standpoint, I would submit that if you genuinely want to make money watching Cramer's show, just listen very carefully to everyone of his picks and pans and do precisely the opposite. I guarantee at minimum you won't do worse then to follow his suggestions and will probably to better.
9-28-2006 @ 9:21PM
Brian said...
Hi Billy -- you are 100% correct. I do understand that Cramer is a "trader" (not an "investor" like Warren Buffet would be characterized as) -- you put it in a very good context with your comment. Traders win and lose their shirts often, and investors are patient and methodical. I'm one of the latter ones :-)
Regards,
Brian
9-29-2006 @ 12:45AM
Burt Rahavi said...
James Cramer is a showman. Next to that probabably a pump it and dump it type of commentator. Remember all the positive comments he was making about UNH we all saw what happened to that stock and sector. He isa just a showman to attract audience to the channel and probably benefit from comments in the backgound.
9-29-2006 @ 6:00AM
Wayne Davis said...
Longtime investor (since 1965). I wouldn't take Cramers advice to buy a carton of milk muchless ANY stock. The man's a bunch of "hot air".
9-29-2006 @ 8:05AM
terry olofson said...
cramer may be privy to considerable amounts of information and occassionaly "hit the nail on the head" but why does he have to act like an idiot in doing so? my blood pressure rises every time i try to watch him.
9-29-2006 @ 9:58AM
Mitchell said...
I say let all of those that do not want to do their own due diligence and blindly follow Jim Cramer do so. The advice that he gives is certainly not bad advuce, it is just not suited to the individual investor. There are people out there that get worse advice from their financial planners and stock brokers. If there is enough trading in the stocks Jim Cramer talks about on his show, then this will create inefficiencies that the serious investor can exploit. Warren Buffet did not make his fortune off of blind advice, but off of doing his own research and finding the market inefficiencies.
9-29-2006 @ 10:08AM
William said...
After reading these posts, it is obvious that there is a lot of emotion about Jim Cramer. Love him or hate him, "Mad Money" IS the number one show on CNBC. I occassionally watch more for industry ideas than for individual stocks. But nobody can deny that Jim Cramer ALWAYS tells people to do their homework and NOT to blindly buy his picks. You don't hear other tv hosts continue to say that about their picks. If nothing else, you gotta respect that he tries to educate along the way.
9-29-2006 @ 11:31AM
Allan said...
The man is fun to watch and brings considerable savvy to investing. As said previously, he does tell you to do your own homework. As somewhat of a novice
investor, I find Jim Cramer quite informative. Be cautious, its your money!
9-29-2006 @ 12:48PM
muth manny said...
Everybody has the right to take his pay check in the bank and make some money OR listen to Cramer and try his or her LUCK. BUT cramer is serious and sincere.
He asks everyone to do "HOMEWORK" whatever that may be!and however u may do it!!
BOOOOyahh!!
9-29-2006 @ 2:04PM
Marlene Piturro said...
I'm still recovering from Jim Cramer's BUY BUY BUY exhortationgs in June and July. Hopefully, I will be able to purge my portfolio of Cramer picks by Christmas. I'm no longer tempted to tune in to his manic antics.
9-29-2006 @ 2:05PM
Vic Michaels said...
Not only is he often wrong....he flip flops. For example he has changed his opinion on CHK several times.
9-29-2006 @ 2:13PM
patti martin said...
I have lost,,lost ...lost..on most of my picks from crammer. I actually do the research as best as i can on his picks, sometimes they seem right but mostof the time they all go down! I have stopped listening to him
9-29-2006 @ 2:13PM
STONEY "WIZARD" STONEHILL said...
I HAVE KEPT TRACK CRAMERS PICKS FOR 1 YEAR AND OVERALL HE IS ABOUT EVEN. MANY BIG WINNERS BUT
MANY BIG LOSERS!
MY STOCK PORTFOLIO IS UP OVER 10% IN THE LAST YEAR!
WHY, I DON'T TRADE IN AND OUT AND GET INTO EVERY
HIGH FLYER THAT SEEMS TO BE THE BULK OF CRAMERS
PICKS!
HE IS A TRADER AT HEART AND IF YOU ARE TRADER ALSO
THEN HE MIGHT MAKE YOU SOME MONEY - BUT AT A BIG
RISK FACTOR!
BUYER BEWARE! HE IS FUN AND HAS A ENTERTAINING
SHOW,BUT DON'T FOLLOW ALL HIS PICKS, BE SMART, AND PICK AND CHOOSE THEN RESEARCH HIS PICKS! THEN PICK THE BEST OF HIS PICKS ONLY!
GOOD LUCK AND GOOD INVESTING!
STONEY "WIZARD" STONEHILL
9-29-2006 @ 2:19PM
gloria stein said...
Kramer is very entertaining, but that is about it. If it was so easy to make money in the market he sure wouldn't be passing all the information to John 'Q' Public. He is alright to watch when commercials are on another channel.
9-29-2006 @ 2:19PM
bob cohen said...
Jim conveniently forgets about the prognostications he makes when the stocks don't perform the way he tells you they will. Let's face it, he's like all of the other T.V. gurus. If they could make billions doing what they're trying to sell you on, they wouldn't be on T.V. I mean, can anyone tell me what Tony Robbins really did to make money before he became the Lord High Poobah of Hollywood. Think about it.
9-29-2006 @ 2:19PM
Jamie Levy Farrell said...
Come, come....equities for the most part is pretty dry, Jim Cramer adds some levity (if not ridiculousness) to the matter and along the way he gives interesting perspectives. Personally, I bought BOL and promptly lost my shirt, but then I started buying GM at 19 in 500 and 1000 share lots and GS at 148 in 100 and 200 share lots and am now starting to "take some off the table". Point is: you win some and loose some, you are responsible for your OWN RESEARCH and your OWN MONEY. Jim drives that point home every show. Jamie Levy Farrell
9-29-2006 @ 2:24PM
Angela Chavez said...
Every stock that I have invested in that he has recommeneded has been at a loss to me. He is a loser! He is just there for entertainment.....