4 Things I Learned About Jim Cramer

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I won't be watching CNBC's Mad Money this week. I guess you can say I'm taking a break from the boo-yah. I did watch the show all last week, though; I wanted to get a better feel for Jim Cramer's antics, in order to provide viewers with a second opinion on some of his saucier market calls.

I'm entertained by Cramer, and I'll admit that occasionally, I'm even enlightened by the industry's biggest celebrity. Rather than close my "Eye on Cramer" series with a recap of Friday's show, I want to recap a few of the things I learned.

1. Cramer is inconsistent
One of my beefs with last Monday's show was his knack for providing contradictory counsel:

Unfortunately, there isn't a lot of consistency in his advice. Earlier in the show he rates Visa (NYSE: V  ) as a "solid buy" right now and a "screaming buy" if it dips below $50. Later in the show, a caller wants to know about MasterCard (NYSE: MA  ) . Cramer retreats. "Both MA and Visa have spiked," he says, reaching for a cash register sound effect. "When things spike in the market, we have to wait for it to come down."

So Visa went from being rated a "solid buy" to being paired with its rival as having spiked just a few commercial breaks later. If you think that's an Exorcist-class head-turner, Friday got even dizzier.

"I like MasterCard more than Visa," Cramer said in response to a piece of viewer mail. "My take on Visa is it's fine. MasterCard's better."

Really, Cramer? Hadn't MasterCard spiked a few shows earlier? To flesh this out appropriately, MasterCard closed at $162.02 before Monday night's show. It finished the week heading into Friday night's show at $161.90. So by "we have to wait for it to come down," Cramer means, "by a negligible 0.1%"? You have to be kidding me.

2. Cramer's callers can be thickheaded
There are only two banking stocks that Cramer likes: investment bankers Goldman Sachs (NYSE: GS  ) and Morgan Stanley (NYSE: MS  ) . Every other bank brought up by Cramer's army of callers was subsequently shot down.

Why are they calling when they know the guillotine will come down? I realize that my first point about Cramer's unpredictable reversals opens the door for him to embrace the sector at a surprising moment, but give Cramer at least some credit.

3. CEOs love being on his show
I wonder just how out of their element Cramer's guest CEOs feel when they're unloading one stuttering "boo-yah" after another? Cramer can certainly pitch his share of softball questions. He had the CEOs of St. Jude Medical (NYSE: STM  ) , Knight Capital (Nasdaq: NITE  ) , and American Public Education (Nasdaq: APEI  ) on last week. With the exception of asking one of them about the high level of insider selling at the company, he stuck to the safe questions.

Needless to say, being invited to Mad Money is an opportunity to sell your story to a larger audience. Obviously, if Cramer were harder on his guests, or actually panned some of the companies, it would be harder to round up willing subjects for execution. That, after all, is saved for the callers who want to know about an obscure bank stock they own.

4. Cramer doesn't get enough credit for what he does
I'll close with a compliment, just in case my coverage of last week's shows came off too negatively. Financial pundits tend to turn on celebrities like Cramer and Suze Orman, but in simplifying investing and personal finance -- and spoonfeeding it to the masses -- they are growing the audience of potential investors, savers, and financially prudent people.

Is that so bad?

Cramer also dedicates generous chunks of his show to enlighten his viewers. Whether he's explaining the basics of technical analysis as he pulls up a chart, or making longer prepared statements that tackle the economy in detail, few will argue that Cramer isn't bright.

In fact, he's a genius -- even if the public perceives him as a showman first.

More tales of Cramerica:

Longtime Fool contributor Rick Munarriz is a fan of Cramer and even read his autobiography a few years ago. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (6) | Recommend This Article (21)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 17, 2009, at 3:49 PM, briyan wrote:

    Articles like this are proof of the overall downward trend in content on the Motley Fool website. I could not disagree more with point #4.

  • Report this Comment On February 18, 2009, at 9:35 PM, peterjlist wrote:

    Are you sure you guys want to go checking investment info like this? I'm wondering what a sold look at our own advice over the years would look like? With your guys love of talking about how "over the last 27.3 years, this stuck as gone up 10,000%" leaving us to wonder why you picked that particular range? (To make your data look better, I know.) Not that I don't love you guys overall, but still...

  • Report this Comment On February 27, 2009, at 9:04 PM, jhawker100 wrote:

    St. Jude Medical is STJ, not STM.

  • Report this Comment On February 27, 2009, at 9:13 PM, excaliburmini wrote:

    I was called to be on Mad Money, then the show was changed and was told I would be on the following Wed. Why did they promise and not call me back.

    It was at least 3 weeks ago...

    What do they want me to ask...I know hundreds of companies...I just want to be on the show...should I be escalibur...or me from area code 518?

  • Report this Comment On March 02, 2009, at 1:28 AM, AStrayElmGod wrote:

    Cramer's inconsistent treatment of Visa/Mastercard, the oil majors, gold mining companies, natural gas producers, etc etc all serve to underscore the importance of his real mantra which is "Buy and Homework". In other words, do your own research. Listen to the conference calls. Read articles. Read the SEC filings. He says you should do at least one hour of research per stock per week. Cramer's true value is persuading people to think like investors, not sheep. And yes, he could use a better approach to recommending individual holdings.

  • Report this Comment On March 03, 2009, at 5:35 PM, Shaftsbury wrote:

    Barron's research recently illustrated just how mediocre a stock picker Jim Cramer is. His stock picking prowess is more myth than fact. His apologists answer that Cramer is constantly advising his viewers to do their own research. The fact of the matter is that Cramer spends a good part of hid daily one hour show saying "BUY! BUY! BUY!" or "SELL! SELL! SELL!" That doesn't sound like "do your own research" to me.

    If Cramer thinks natural gas is the way to go, there can only be one company worthy of your investment. The company he picks. He glibly advises his viewers to sell their ABC stock to buy his XYZ stock. More often than not, the caller's stock outperforms Jim's, but that is never mentioned.

    In a bear market, Cramer is behind the 8-ball because he doesn't have a program without stocks to tout. For all those who put their trust in Cramer over the past few months, I can only say "Welcome to the House of Pain."

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