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I forget the details of the infamous Jon Stewart interview with Cramer, but I sorta remember one aspect that spoke to the two faces of Cramer. You have TheStreet.com Cramer, which is generally very serious, informative (debatable at times, but whatever) and straightforward.
However, you also have the soundboard Cramer of "Mad Money", which is sort of informative at times, but is otherwise a lot of noise. The thought is that "Mad Money" Cramer would be a lot more compelling to a mainstream audience, but with CNBC's ratings the way they are, I'd be curious how "semi-serious Cramer" would go over. I certainly haven't seen all the episodes of "Mad Money", but I've never heard him really going into a discussion like the one above.
Anyways, the above video - which was mentioned in the Stewart interview - has a few favorite soundbites, especially "You get the Pisanis of the world talking about it" and discussion of spreading rumors to move stocks. "You cant foment. You cant create yourself an impression that a stocks down. But you do it anyway because the SEC doesnt understand it. So thats the only sense that I would say that its illegal."
Cramer's "Confessions of a Street Addict" is actually a pretty engaging read about his experiences running his hedge fund. That is "TheStreet" Cramer (and goes into the mess behind that Company, which is now trading at about $1.62 and was the focus of an activist investor not that long ago), whereas his books afterword are more "Mad Money" Cramer. Additionally, TheStreet IPO'd at $19 and climbed quite a bit higher on the first day of trading ($60's, if I remember correctly.)
Thanks for the informative and revealing Jim Cramer interview video and your comments.
I am neither surprised or shocked. The man has an unbounded ego. His ego aside, the evidence strongly suggests that he is not prescient nor a real market mover.
He arrogantly postulates that his deceitful false information campaigns create market mini-bubbles or panics. His incomplete assertion assumes that other so-called market movers with opposite positions are not countering his assertions with opposing perspectives, equally mischievous in their design. All these miscreants work to cancel each other out.
Historically, Jim Cramer has been very consistent in his stock selection forecasts; he has constantly hovered at near the 50 % accuracy level. He is no better than a fair coin toss, and is the personification of the famed dart-tossing monkey.
CXO Advisory Group has tracked his prediction performance record for an extended timeframe. Today, he is at the 47 % success level. Here is the CXO Link that details that very average accomplishment:
If you liked the Cramer interview video, you might enjoy this more serious 6 minute presentation that totally destroys the carefully crafted Cramer image. It starts with an introductory statement by Burton Malkiel. It is titled “Should You Be Stock Picking”. The Fog Video Link follows immediately:
I hope you like it. Stock picking and mutual fund selection are both tough assignments.
Reply to @MJG: That's a good video - rather fascinating that his producer was formerly a producer on "Springer" (although it makes sense.)
Cramer's ability to move markets in Cramer's "current form" has been seen to some degree - although it is largely the after market, where Cramer has told his viewers not to buy right after he talks about something. There was some discussion for a time of people making some "mild money" off shorting the pop that came after one of Cramer's recommendations on "Mad Money". However, with the declining audience, the pops from his recommendations may not be what they used to be.
As for Cramer's ability to move markets as a successful hedge fund manager, that may have been more substantial, although I think a fair amount of Cramer's early success may be due in part to his former wife, dubbed "The Trading Goddess", and who worked as a trader under legendary hedge fund manager Michael Steinhardt. I'll continue to suggest "Confessions of a Street Addict" - certainly not the best Wall Street book ever, but an interesting look at Cramer pre-"Mad Money" era and to some degree pre-"The Street.com" era.
"All these miscreants work to cancel each other out."
I'll disagree. Those who are working with enough money can move the market to their advantage. To suggest that there is a "yin" to every hedge fund "yang" at any time is something I think overlooks the continued reality (and likely moreso in the last 5-10 years) that the average retail investor is having less and less effect on the markets vs large/larger players, who can certainly act in concert when they see trouble (as they did with JPM and "Whalegate".)
People need to be aware of the realities of the market (as I don't think they're changing any time soon), and there needs to be education regarding risk tolerance (people can't stand the volatility and often go beyond their risk tolerance - as for the former, I watched one of my holdings go from -4% to +8.8% today on no news, talk about volatility), allocation, and other broad concepts (understanding valuation metrics, etc) and as I've said in other threads, this needs to happen at the high school level - because I think otherwise people have to choose to learn it on their own, and in many cases they're not. Presenting it early on in adulthood will lead (hopefully) to more educated, confident investors and I think there could be broader economic positives beyond market action if more retail investors were able to have a greater grasp on investing.
However, I think on the flip side, there could be a great deal done to start bringing back confidence/faith/trust in the financial system again. Retail is never going to have the advantage, but at least working to slow down trading (people have discussed a tax on trades held less than a few minutes or other similarly short time frames), regulations (unlikely) and other possible solutions.
Thanks for your extended reply. It addresses a much more significant issue than Jim Cramer’s integrity and honesty. The general public’s financial education is indeed a crucial subject. I agree with much you wrote on the topic.
On an anecdotal basis, I have given a few lectures to senior citizens and several talks to high school level students. The financial and investment acumen of both cohorts are dreadfully poor. Education is surely one candidate resolution. That’s why many of my postings gravitate towards the educational direction. In particular, I suspect most investors would benefit from a stronger exposure to statistical tools.
Truth be told, I can count on one hand the number of Cramer shows that I have watched in their entirety; I regret every single one of them as a waste of precious time. In his current reincarnation, he is an investment clown, and not a very funny one at that. I never knew him as a Hedge Fund manager.
I’m sure, as a Hedge Fund manager, he made money; he also experienced poor years. I would guess he never had the clout of a Michael Steinhardt, who had a solid record as a Hedge Fund manager and institutional advisor. Cramer was not a major Wall Street player, his assertions to the contrary. He was a minor league ball player in that pantheon.
I certainly agree that institutional market participants hold many advantages over private investors. Mostly those advantages are realized in the time and resource dimensions. I think that’s why many on this site are mutual fund and ETF investors. It helps to level the playing field.
Historically, individual investors, even in mutual funds, do not realize market rewards, mainly because of poorly timed entry and exit decisions. Likewise, even Hedge Fund managers, on average, fall into that same trap. Surely, some Hedge Funds are hugely successful and outperform the market. But the distribution is highly asymmetric. The failed Hedge Fund graveyard reflects nearly epidemic levels.
It is likely more difficult to choose a solid Hedge Fund than an Alpha-generating active Mutual Fund manager.
In his book, “The Hedge Fund Mirage”. Simon Lack documents the challenge. His opening salvo in the book is that “If all the money that’s ever been invested in hedge funds had been put in treasury bills instead, the results would have been twice as good.”
Lack’s study period was 1998 t0 2010. He corrects the raw data by weighting for investor returns, not annual generic returns. He also reports that results are overstated because of survivorship and “backfilling” biases. Even sophisticated investors suffer from accepting these illusionary outcomes without carefully challenging their validity.
I make no claims that individual investors have some mythical advantage like the AAII organization seems to advocate. Investing is a hard road that demands time, study, resource, and persistence commitments that few individuals possess. For those reasons, a passive Index investment policy might be a proper strategy for many investors. I do think a portfolio must contain a mix of equities, bonds, real estate, and commodity components to stay ahead of inflation’s erosion to wealth.
I have both passive elements and actively management holdings in my portfolio.
It’s always prudent to be cognizant of self-serving market miscreants who masquerade as wizards, and who often proffer noise signals that do tend to cancel each other out. Buyer beware. I rank Jim Cramer in that category.
Reply to @MJG: " Cramer was not a major Wall Street player, his assertions to the contrary. He was a minor league ball player in that pantheon."
Well, as CNBC goes, he fared better than Ron Insana.
I'll have to read "The Hedge Fund Mirage". I have a more positive view of the hedge fund industry, but would be reading opinion and statistics to the contrary.
"I do think a portfolio must contain a mix of equities, bonds, real estate, and commodity components to stay ahead of inflation’s erosion to wealth."
I couldn't agree more.
"I have both passive elements and actively management holdings in my portfolio."
I'd be very interested if you would share a few picks with the board (individual stocks, funds or otherwise) - obviously, up to you to do so and I would understand if you chose not to.
You noted: "This is old news. What prompted you to bring it again?" Is this directed towards Flack for the post or some other commentary in this thread?
There are areas that get the re-do here; but I always try to keep in mind that there are new members here, too.
“This is old news. What prompted you to bring it again?”
Well, the markets were closed. I had a few spare minutes. This particular video had been washed from the internet for some time. And I believe that Cramer is a prime example of entertainment expediency over investment reality. Trading, as opposed to investing, is a complex and often dangerous activity. I studied for several years before I actually began day trading. It was another couple of years before I became good at it. I teach an investment class a few times a year and do some lectures. There are always people who ask about day trading. I discourage them. BTW, I seldom day trade nowadays.
Comments
However, you also have the soundboard Cramer of "Mad Money", which is sort of informative at times, but is otherwise a lot of noise. The thought is that "Mad Money" Cramer would be a lot more compelling to a mainstream audience, but with CNBC's ratings the way they are, I'd be curious how "semi-serious Cramer" would go over. I certainly haven't seen all the episodes of "Mad Money", but I've never heard him really going into a discussion like the one above.
Anyways, the above video - which was mentioned in the Stewart interview - has a few favorite soundbites, especially "You get the Pisanis of the world talking about it" and discussion of spreading rumors to move stocks. "You cant foment. You cant create yourself an impression that a stocks down. But you do it anyway because the SEC doesnt understand it. So thats the only sense that I would say that its illegal."
Cramer's "Confessions of a Street Addict" is actually a pretty engaging read about his experiences running his hedge fund. That is "TheStreet" Cramer (and goes into the mess behind that Company, which is now trading at about $1.62 and was the focus of an activist investor not that long ago), whereas his books afterword are more "Mad Money" Cramer. Additionally, TheStreet IPO'd at $19 and climbed quite a bit higher on the first day of trading ($60's, if I remember correctly.)
Thanks for the informative and revealing Jim Cramer interview video and your comments.
I am neither surprised or shocked. The man has an unbounded ego. His ego aside, the evidence strongly suggests that he is not prescient nor a real market mover.
He arrogantly postulates that his deceitful false information campaigns create market mini-bubbles or panics. His incomplete assertion assumes that other so-called market movers with opposite positions are not countering his assertions with opposing perspectives, equally mischievous in their design. All these miscreants work to cancel each other out.
Historically, Jim Cramer has been very consistent in his stock selection forecasts; he has constantly hovered at near the 50 % accuracy level. He is no better than a fair coin toss, and is the personification of the famed dart-tossing monkey.
CXO Advisory Group has tracked his prediction performance record for an extended timeframe. Today, he is at the 47 % success level. Here is the CXO Link that details that very average accomplishment:
http://www.cxoadvisory.com/2809/individual-gurus/jim-cramer/
If you liked the Cramer interview video, you might enjoy this more serious 6 minute presentation that totally destroys the carefully crafted Cramer image. It starts with an introductory statement by Burton Malkiel. It is titled “Should You Be Stock Picking”. The Fog Video Link follows immediately:
I hope you like it. Stock picking and mutual fund selection are both tough assignments.
Best Wishes.
Cramer's ability to move markets in Cramer's "current form" has been seen to some degree - although it is largely the after market, where Cramer has told his viewers not to buy right after he talks about something. There was some discussion for a time of people making some "mild money" off shorting the pop that came after one of Cramer's recommendations on "Mad Money". However, with the declining audience, the pops from his recommendations may not be what they used to be.
As for Cramer's ability to move markets as a successful hedge fund manager, that may have been more substantial, although I think a fair amount of Cramer's early success may be due in part to his former wife, dubbed "The Trading Goddess", and who worked as a trader under legendary hedge fund manager Michael Steinhardt. I'll continue to suggest "Confessions of a Street Addict" - certainly not the best Wall Street book ever, but an interesting look at Cramer pre-"Mad Money" era and to some degree pre-"The Street.com" era.
"All these miscreants work to cancel each other out."
I'll disagree. Those who are working with enough money can move the market to their advantage. To suggest that there is a "yin" to every hedge fund "yang" at any time is something I think overlooks the continued reality (and likely moreso in the last 5-10 years) that the average retail investor is having less and less effect on the markets vs large/larger players, who can certainly act in concert when they see trouble (as they did with JPM and "Whalegate".)
People need to be aware of the realities of the market (as I don't think they're changing any time soon), and there needs to be education regarding risk tolerance (people can't stand the volatility and often go beyond their risk tolerance - as for the former, I watched one of my holdings go from -4% to +8.8% today on no news, talk about volatility), allocation, and other broad concepts (understanding valuation metrics, etc) and as I've said in other threads, this needs to happen at the high school level - because I think otherwise people have to choose to learn it on their own, and in many cases they're not. Presenting it early on in adulthood will lead (hopefully) to more educated, confident investors and I think there could be broader economic positives beyond market action if more retail investors were able to have a greater grasp on investing.
However, I think on the flip side, there could be a great deal done to start bringing back confidence/faith/trust in the financial system again. Retail is never going to have the advantage, but at least working to slow down trading (people have discussed a tax on trades held less than a few minutes or other similarly short time frames), regulations (unlikely) and other possible solutions.
Hi Scott,
Thanks for your extended reply. It addresses a much more significant issue than Jim Cramer’s integrity and honesty. The general public’s financial education is indeed a crucial subject. I agree with much you wrote on the topic.
On an anecdotal basis, I have given a few lectures to senior citizens and several talks to high school level students. The financial and investment acumen of both cohorts are dreadfully poor. Education is surely one candidate resolution. That’s why many of my postings gravitate towards the educational direction. In particular, I suspect most investors would benefit from a stronger exposure to statistical tools.
Truth be told, I can count on one hand the number of Cramer shows that I have watched in their entirety; I regret every single one of them as a waste of precious time. In his current reincarnation, he is an investment clown, and not a very funny one at that. I never knew him as a Hedge Fund manager.
I’m sure, as a Hedge Fund manager, he made money; he also experienced poor years. I would guess he never had the clout of a Michael Steinhardt, who had a solid record as a Hedge Fund manager and institutional advisor. Cramer was not a major Wall Street player, his assertions to the contrary. He was a minor league ball player in that pantheon.
I certainly agree that institutional market participants hold many advantages over private investors. Mostly those advantages are realized in the time and resource dimensions. I think that’s why many on this site are mutual fund and ETF investors. It helps to level the playing field.
Historically, individual investors, even in mutual funds, do not realize market rewards, mainly because of poorly timed entry and exit decisions. Likewise, even Hedge Fund managers, on average, fall into that same trap. Surely, some Hedge Funds are hugely successful and outperform the market. But the distribution is highly asymmetric. The failed Hedge Fund graveyard reflects nearly epidemic levels.
It is likely more difficult to choose a solid Hedge Fund than an Alpha-generating active Mutual Fund manager.
In his book, “The Hedge Fund Mirage”. Simon Lack documents the challenge. His opening salvo in the book is that “If all the money that’s ever been invested in hedge funds had been put in treasury bills instead, the results would have been twice as good.”
Lack’s study period was 1998 t0 2010. He corrects the raw data by weighting for investor returns, not annual generic returns. He also reports that results are overstated because of survivorship and “backfilling” biases. Even sophisticated investors suffer from accepting these illusionary outcomes without carefully challenging their validity.
I make no claims that individual investors have some mythical advantage like the AAII organization seems to advocate. Investing is a hard road that demands time, study, resource, and persistence commitments that few individuals possess. For those reasons, a passive Index investment policy might be a proper strategy for many investors. I do think a portfolio must contain a mix of equities, bonds, real estate, and commodity components to stay ahead of inflation’s erosion to wealth.
I have both passive elements and actively management holdings in my portfolio.
It’s always prudent to be cognizant of self-serving market miscreants who masquerade as wizards, and who often proffer noise signals that do tend to cancel each other out. Buyer beware. I rank Jim Cramer in that category.
Thanks again for your many contributions.
Best Wishes.
Well, as CNBC goes, he fared better than Ron Insana.
I'll have to read "The Hedge Fund Mirage". I have a more positive view of the hedge fund industry, but would be reading opinion and statistics to the contrary.
"I do think a portfolio must contain a mix of equities, bonds, real estate, and commodity components to stay ahead of inflation’s erosion to wealth."
I couldn't agree more.
"I have both passive elements and actively management holdings in my portfolio."
I'd be very interested if you would share a few picks with the board (individual stocks, funds or otherwise) - obviously, up to you to do so and I would understand if you chose not to.
Than again, it is surprising that some long time members have missed it.
You noted: "This is old news. What prompted you to bring it again?"
Is this directed towards Flack for the post or some other commentary in this thread?
There are areas that get the re-do here; but I always try to keep in mind that there are new members here, too.
Thank you and take care,
Catch
“This is old news. What prompted you to bring it again?”
Well, the markets were closed.
I had a few spare minutes.
This particular video had been washed from the internet for some time.
And I believe that Cramer is a prime example of entertainment expediency
over investment reality.
Trading, as opposed to investing, is a complex and often dangerous activity.
I studied for several years before I actually began day trading.
It was another couple of years before I became good at it.
I teach an investment class a few times a year and do some lectures.
There are always people who ask about day trading. I discourage them.
BTW, I seldom day trade nowadays.