Why You Shouldn't Listen to Jim Cramer

"Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now."
-- Jim Cramer, Today Show, Oct. 6, 2008; S&P 500 at 1,056.89.

Six months ago, and thanks in no small part to the statement above, I concluded that Jim Cramer was a menace to investors.

It took only a few months for the rest of the nation to catch on. Jon Stewart finally jumped on the bandwagon earlier this month and exposed the man for what I think he really is: an entertaining (if not irritating) media personality, but certainly not the champion of the individual shareholder that he often claims to be.

In fact, I consider him to be the closest thing to a walking, talking hazard for the individual investor there is. Now, Jon Stewart may have the jokes, but I have the real reasons why Cramer is precisely that -- a hazard to investors -- and why you should take a pass on any investment advice he tries to give you.

Thank you, Jon Stewart!
I continue to fully applaud Cramer's stated goal -- to help people make money by investing in the stock market. But Cramer's outburst six months ago was a mistake -- plain and simple. And, as Stewart so kindly illustrated, it wasn't his first time.

You see, when someone issues panic-inducing market calls, as Cramer does from time to time -- and urges investors to avoid long-term strategies to buy and hold good companies -- the average investor simply gets crushed.

Cramer's Today show plea was grounded in a sound reality -- Fools should never have money they need during the next five years in the market. But by advising people to indiscriminately sell, he helps contribute to exactly the thing that he's trying to avoid: losing money.

Chances are, most viewers were petrified even before Cramer spoke -- the market's been up and down (and mostly down) more times than a yo-yo lately. Even a very small push these days is likely to persuade investors to join the terrified herds pulling their money out of the market.

And nearly six months later, Cramer appears to be the next Oracle at Delphi as we sit in a market priced well below his initial call. Though I'm happy for those who were able to pull themselves out -- and many did -- it's a disturbing trend to witness.

Between October and the end of November, investors pulled out a whopping $140 billion from U.S. equity funds. Based on what these funds were holding, they were indirectly pulling out of mutual fund mainstays such as Waste Management (NYSE: WMI  ) , 3M (NYSE: MMM  ) , Yum! Brands (NYSE: YUM  ) , Yahoo! (Nasdaq: YHOO  ) , Texas Instruments (NYSE: TXN  ) , and Caterpillar (NYSE: CAT  ) -- many of which had already been hammered.

Cramer might've saved people some money in the short term -- and I'm pleased for that. But to complete the circle, he'd have to tell these people precisely when to get back in. I'm not sure how loudly I heard him yelling on March 6 when we reached that recent market low.

And instead of holding onto the steady blue-chip stocks that have historically provided investors with some of the strongest long-term returns, many investors have been progressively selling at historic lows ... thereby ignoring the sound and sage advice from names such as Buffett, Lynch, Graham, Munger, and Bogle. That's the larger point.

You don't need a weather reporter ...
I'll admit that Cramer is entertaining, but no one can consistently forecast the direction of the market as he pretends to be able to do. I repeat: No one can consistently forecast the direction of the market.

It moves completely randomly and unpredictably over the short term -- and therefore trying to make a "call" on the market won't consistently work out for you. Pick a direction (up or down), and there's a 50% chance of being right -- even though the prediction is rather meaningless.

It's like Punxsutawney Phil. The furry little critter climbs out of his hole and either sees his shadow or he doesn't. Whichever it is, the result has nothing to do with whether winter is over -- just like a stock market prediction has nothing to do with the market's movements.

The scary part is that Cramer has flip-flopped numerous times. He's called the bottom already several times in recent months. While CNBC may gloss over this fact, I've taken careful notice. Don't forget about his theory that 2008 would be the year of natural gas. Ouch.

The talking heads on TV get paid to put on a song-and-dance show and attract viewers. Your education or your personal success, as Jon Stewart kindly brought to light, is a secondary priority -- or not a consideration at all.

Whether Cramer turns out to be right or wrong in the end just isn't the point. The point is that no one can claim to predict the markets -- no one. If you follow the advice of those who say they can, it's likely to cost you thousands, if not more.

Here's the real problem
In the real world, there are commission costs, taxes, and opportunity costs -- all of which have a tremendous impact on the returns that you're likely to experience.

Every time you pull the trigger in your account, think about your broker and the tax collector doing a little touchdown dance. Much of their income is predicated on your transacting as much as possible.

Take a hint from someone who knows a lot about the hidden costs of investing: John Bogle, the founder of Vanguard Investments. He writes: "No matter how efficient or inefficient markets may be, the returns earned by investors as a group must fall short of the market returns by precisely the amount of the aggregate costs they incur. It is the central fact of investing."

Think about that the next time you hear "Buy, Buy, Buy" or "Sell, Sell, Sell."

And for those who listened to Cramer on his recent market call, don't forget that he has quite a monumental task in front of him: He has to precisely tell you when to get back in.

The Foolish bottom line
If you want to make money in the stock market, you need to tune out the panic -- or the euphoria. You need to remember that no one has any idea where the market is going in the near or medium term. You need to buy shares of great, built-to-last businesses. You need to hold for the long term. And you need to keep as much money as you can from the tax collector or your broker.

That's what we do at Motley Fool Stock Advisor, and it's paying off. Take two of our best stocks, Marvel Entertainment and GameStop (NYSE: GME  ) . We recommended buying shares of these stocks six and five years ago, respectively. Both have absolutely thrashed the market by incredible margins.

What was the cost of doing all of this? Probably $24 in broker fees and $0 in taxes. That's a perfect example of what I'm talking about. In fact, our whole scorecard is beating the S&P 500 by 34 percentage points.

As for Cramer ... he undoubtedly has an uncanny knowledge of tickers, prices, and strange catch-phrases. But what he sorely lacks -- and what you must never forget in your investing days -- is temperament. It was Warren Buffett who once said that "the most important quality for an investor is temperament, not intellect."

Want to see what else we've recommended and what we're recommending now? Click here to get a free, 30-day trial to Stock Advisor -- there's no obligation to subscribe.

This article was originally published on Oct. 23, 2008. It has been updated.

Nick Kapur owns shares of Marvel Entertainment. Waste Management is a Motley Fool Income Investor recommendation. 3M and Waste Management are Inside Value picks. The Motley Fool's disclosure policy would never suggest that it could predict or time the market.


Read/Post Comments (58) | Recommend This Article (68)

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 March 28, 2009, at 8:14 AM, Matt8265 wrote:

    I would say the same thing about TMF. Usually, a waste of time and money.

  • Report this Comment On March 28, 2009, at 8:41 AM, wuff3t wrote:

    "I would say the same thing about TMF. Usually, a waste of time and money."

    Then why are you here? By your own reasoning you are wasting most of the time you spend here; time that you could be spending more fruitfully elsewhere. Isn't it therefore your own fault if you are losing time and money - not TMF's?

  • Report this Comment On March 28, 2009, at 8:55 AM, YST1900 wrote:

    Your article is just loser sour grapes ... should be titled "Why should I listen Nick Kapur" . ... what have you ever done in the investment world to warrant being listened to ??? If you were so successfull you would have no need to be writing such garbage ...

  • Report this Comment On March 28, 2009, at 9:40 AM, Dave0129 wrote:

    In the interest of full disclosure, I am a MF subscriber, but also watch Cramer's show on a regular basis.

    While I think the author makes some good general points about investing, that are obviously consistent with TMF philosophy, I think the blatant attacks are uncalled for. It just makes the auther (and TMF) look like sour grapes. I don't know, maybe there's some jealousy because Cramer has a prime time show with millions of viewers, has written several books, and no one at TMF can claim anything close to this.

    I say cut the BS and go back to minding your own business. I think both Cramer and TMF give sound advice and the average investor would not be harmed listenening to either one (or both).

    Cramer made a few surprisingly accurate calls last year. He makes predictions, yes, but he always explains what led to the opinion, and it is up to the viewer to agree or disagree. I read a lot of articles from TMF and you guys make predictions too. So why bash others for the same?

    To answer the authors fundamental question about Cramer telling people when to get back in: I've noticed he seems to be advising cautious buying (but not all at once) of diversified high-yield stocks for the past few months. He even recommended your WMI stock above. Were you really expecting him to pick a single point in time and tell everyone to pile back in? That wouldn't be good advice either.

    The author should give it a rest and go back to writing real articles and newsletters. Let us decide who we listen to.

  • Report this Comment On March 28, 2009, at 10:10 AM, bejeweledfool wrote:

    Jim Cramer is an idiot. He is all over the place with his "advice." The people that call into his show actually LISTEN to this guy which is the point of the article. When he says pull your money out of the market, people actually believe him. That is dangerous. BUY LOW SELL HIGH! What the hell kind of broker tells people to sell low? The whole sky is falling thing is a little much. Temperment is right.

    For the people watching Cramer's show, who I doubt are billionaires, just poor average joe's trying to retire - they need to buy and hold.

    I disagreed with Jon Stewart about the show Fast Money. I like that show. I think they have some insightful dialog about individual stocks. I think the same thing about TMF. I don't buy anything just because someone says to, I do my own research. I wouldn't kill myself because a cult leader told me to either.....But there are plenty of people out there that would.

  • Report this Comment On March 28, 2009, at 10:23 AM, wuff3t wrote:

    "The author should give it a rest and go back to writing real articles and newsletters. Let us decide who we listen to. "

    Er, by telling the author what to write (or in this case what not to) aren't you preventing me from deciding who I listen to? Maybe I can read Nick's article and make up my own mind?

  • Report this Comment On March 28, 2009, at 10:42 AM, ralphmachio wrote:

    I have found at times, the most profitable thing to do is exactly the opposite of what the street suggests. Buying Citi at 1.01 was the most profitable move I've ever made, and the street had all their snake charmers trying to steer everyone away from the investment. Shame on them, and anyone else who doesn't see the flip flop nature of all the financial news. The tiniest amount of research would have you conclude, the rich (no, even richer) created the CFR to control the press. how could you possibly take that lying box at face value? It's like every day you forget what happened the day before! Worst part, the more you watch it, the more you assume it isn't lying. Next thing you know, the smartest people in America will be fooled into thinking it's OK to consume 40% of global resources, while producing 20% of the goods, and borrowing more than you can ever pay back from slippery folks who KNOW we will never pay them, just to go on Bender Extender! Can anyone tell me what comes after trillion? Is it Zillion, or Kazillion? We're gonna have to improve public education if the kids are going to be working cash registers at mcdonalds, and you have to break a trillion dollar bill!

  • Report this Comment On March 28, 2009, at 11:38 AM, Amchi wrote:

    If TMF is doing the right thing - why should it be interested in faulting other investment advisors - this sounds more like an ad for why people should folk to TMF. If the intent is to challenge Crammer, why not do so with apples to apples comparison? Take JC's portfolio and compare it with MDP. Numbers will tell the tale....

  • Report this Comment On March 28, 2009, at 12:55 PM, awallejr wrote:

    Cramer's show is total irresponsibility. A truly prudent advisor whould first want to get all the facts involving a given individual's situation before giving that person financial advise. Cramer does it for entertainment. If his show was about movie criticism, fine. But it isn't. He is being absolutely arrogant to even give hundreds of weekly buy/sell signals on the stocks he does, since he violates his own standards when he tells people to put at least 1 hour of homework per week on each of their picks. No way he is doing that.

    Telling people to not invest money into the market that they may need in a 5 year horizon is simply stating the obvious. But did he say that when he was telling everyone to buy,buy,buy at Dow 13,000? No. He waited until the market collapsed over 3,000 points.

    There should be nothing funny or entertaining about where to invest one's hard earned money. This really is serious business since the consequences to individuals can be tremendous. You could even hear the desperation in some of his caller's voices when they ask for Cramer's thumbs up or down on a pick. But does he inquire into the caller's financial profile? Nope, like Ceasar he swings his thumb blithely up or down in a direction that suits him at the moment, disregarding the fact that only a few months earlier he gave an opposite directional call.

    Opinions are fine. But to try and make a financial show into a circus for ratings and entertainment is just irresponsible.

  • Report this Comment On March 28, 2009, at 1:57 PM, Peter913 wrote:

    Dear FOOL!

    Cramer is pretty good. His "longs" sometimes add 5% to a stock near term. When you throw 'boulders' at him, all you are showing me are your naked shorts.

  • Report this Comment On March 28, 2009, at 2:39 PM, awallejr wrote:

    Not throwing boulders at him personally. I am sure he is a decent guy. I am throwing boulders at his show's format, which by design is simply harmful to people in the long run.

  • Report this Comment On March 28, 2009, at 2:53 PM, jriggs6529 wrote:

    Everyone is hurting financially these days that has money tied into the stock market, Kramer is obviously no exception. While this article was a rather direct attack at Kramer, it highlights what I have believed to be a rather crazy show. Sure, he does have some good advice, and a lot of bad advice to go along with it.

    What everyone should know is that all they are getting from any 'advising service' is simply that--advice. It’s still up to the individual investor to do their own homework when making purchases with their money.

  • Report this Comment On March 28, 2009, at 2:58 PM, CMB01 wrote:

    Jim Cramer is a strange breed. Does anyone remember his rants about Advanced Micro Devices being "Best of Breed" over Intel. Those that listened to this paid over $30 dollars a share for the stuff, then down in the 20's. Eventually after a couple of years AMD made his wall of shame. Everyone makes bad calls but to trash Intel as a pack of lawyers and AMD as the best of breed has always made me wary of the very popular Cramer.

  • Report this Comment On March 28, 2009, at 3:12 PM, Warpaint2007 wrote:

    I find it absolutely astonishing that anyone could find Jon Stewart’s actions or yours in attacking Jim Cramer acceptable. Cramer being put on the hot seat for his so-called bad calls when he is simply providing investors a venue to get information or CEO insight on a company they may be invested in; all for free I might add is absurd. Cramer offering picks or insight to investors is no different than MF doing it in print and charging money for it; are you jealous? Example: If an ESPN commentator says “Dallas will win this game” and then Dallas loses, is ESPN responsible for the gambler losing his money? Is this somehow different than Jim Cramer saying “buy, buy, buy” or “sell, sell, sell?” How is MF any different with their stock picks, please explain that, (other than you charge for it)? Why is Cramer any more accountable or culpable than ESPN? How about Fortune magazine naming AIG one of its “10 Best Stocks for ‘08” or perhaps the article from BusinessWeek telling investors “Don’t be leery about Lehman”? You see, the media is just that….media. They are not bound by law to be right about anything, if that were the case, all of the world’s weathermen would be in prison. By showing, printing, or suggesting bad calls and making a mockery of Cramer, people like MF and Jon Stewart are cheating hundreds of thousands of scared investors, new investors, and future investors in 401k’s and stocks of having anywhere to turn or having any faith or trust in the thousands of good calls that these business channels do provide. Do you think they will all flock to MF instead? Do you think investors will enjoy or somehow reap rewards from the endless barrage of garbage emails asking for money that MF offers? Heck, this story is ended with the typical "sales pitch" from MF..."want to see more?...all you gotta do is pay for it after the "free trial" expires, lol. Cramer regularly says “Do your homework”, that in itself is a lesson every investor should learn. You are dead wrong author and I'll say again, at the very least Cramer is free! Stewart is a moron!

  • Report this Comment On March 28, 2009, at 3:37 PM, uncertain66 wrote:

    And Cramer's advice was bad because??? Oct. 6, 2008; S&P 500 at 1,056.89 vs. Mar. 27, 2009 at

    815.94. Looks like he saved people 20% with this advice, I didn't need the money in five but wish i had followed the advice anyway.

    I am not a Cramer fan but at least he is out there telling people it is important. He did not defend himself against Stewart and it is puzzling why not.

  • Report this Comment On March 28, 2009, at 4:36 PM, briyan wrote:

    Terrible article.

  • Report this Comment On March 28, 2009, at 4:39 PM, Thobbit wrote:

    To believe any 'talking head' whether it be Cramer, or the Gardner's has all the answers is to be a true idiot. No one has all the answers, and all of them make mistakes.There is no excuse for letting another person influence your decision making process. Read, learn, educate yourself, do the homework. Learn technical analysis, market trends, and study the fundamentals of your positions. Learn the different styles and trading, and what techniques make them sucessful. One of the most important things to remember is that there are active traders like Cramer, and there are buy and hold investers like the Gardners. Decide what style fits you best and stay true to that style. Neither is wrong, they are just different. And remember the most important rule 'Manage your risk'. To buy, hold, and forget is a financial disaster waiting to happen.

  • Report this Comment On March 28, 2009, at 7:22 PM, Warpaint2007 wrote:

    Very well said Thobbit!

  • Report this Comment On March 28, 2009, at 10:51 PM, phillips49 wrote:

    I have to agree with warpaint & uncertain. Cramer's advice was not to sell everything. Cramer's advice was to keep cash for your needs over the next 5 years. The market didn't sell off because of Cramer and homegamers. It sold off due to liquidation of assets by the overleveraged institutions. Feburary and March market performance validated the October recommendation. His over riding advice has always been "do your homework". Responsibility for actions based on his advice always fall back on the investor.

    Investing shouldn't be based on "hope" it should be based on facts and data. I don't think anyone has a clue as to what earnings will be or what P/E's will or should be. I don't think anyone has a clue as to how long the market will take to recover. It could be 5 years. Could be longer. Sometimes you hold'em, sometimes you fold'em and somedays you just shouldn't play.

    Personally, I switched over to bond funds. At least I have some kind of chance to value them.

    Anyone can take shots, but MF failed to prove their case that you shouldn't listen to Cramer, since they didn't turn their cards over to show you how they did since October.

  • Report this Comment On March 29, 2009, at 9:34 AM, ActionAlertsPlus wrote:

    The facts are right here in Motley Fools' accounting of ActionAlertsPlus. Cramer runs this portfolio to train beginners how to trade for a modest subscription fee. "Menace to investors"....gimme a break!

  • Report this Comment On March 29, 2009, at 10:08 AM, directd wrote:

    As paradoxical as this sounds: I find Cramer more entertaining but philosophically agree with MF.

    I believe Cramer does have useful knowledge for the beginner but his temperament is truly all over the place. My biggest problem was him as his call at DOW 14K: where he said to "buy and not even think about it" For some inexplicable reason this goes unnoticed by MF and yet to me it is the most egregious call he has made.

    The people that listened to him at DOW 14K and then got out at DOW 10K (and by the way if I or any other advisor told you to buy high and sell low would you call us a "guru"? Don't think so) are very unlikely to get back in now after losing that money and quite frankly it was doubtful whether the mostly small time investors that watch him everyday CAN do so even if they wanted.

    The call to take money out of the market if you need it for 5 years; well that's just a no brainer. I mean again to beginners that's useful advice which is why I say Cramer can be useful in that respect, but to NOT have money in the market that you will within 5 years is just a no brainer.

  • Report this Comment On March 29, 2009, at 11:18 AM, Varchild2008 wrote:

    This has got to be the 1,000th article written nearly the same as the previous 999 attacking Jim Cramer on TMF.

    Geeze? Give it a rest. Had President Obama been on board with natural gas powered vehicles and other things that would push demand for natural gas, then 2008 would have been the year of Natural Gas. Cause Nat. Gas would have bottomed in '08 producing a huge buying opportunity and then taken off in '09.

    Jim Cramer already said that this was why he was bullish on Natural Gas and unfortunately none of it played out.

    So your attacks just simply make TMF look small and Jim Cramer look BIG.

  • Report this Comment On March 29, 2009, at 12:37 PM, awallejr wrote:

    His Nat Gas call was a supply/demand argument off the price of Oil. Had nothing to do with making nat gas cars (although I personally like the idea). He was pushing a bubble and nothing more. Same when he brings on US Steel's CEO and pushes the stock at 160. Or the Wachovia CEO who looked people in the eye and said how fine they were and their assets solid,then a week later their stock tanks to and they are sold off. Cramer puts him on the wall of shame then takes him off CHEERING the CEO for his "smart" move of selling off, despite the fact that any listener who bought still lost his shirt. A litany can go on and on.

    It isn't an issue of being wrong as well as right. It is the arrogance of his show's format that is the problem. Banging pots and pans and telling basic strangers what to do blithely on nearly any stock inquired about, that is the danger.

    We all have our agenda's. Make no mistake, Jim Cramer is not being altruistic with his show. He wants to sell his books and get people to subscribe to his newsletter service. And his show is free avertisement for him.

    He apparently has the ratings, so his show will continue. But rule of thumb with his show is to NEVER blindly follow his calls. At best use them for ideas and do independent research.

  • Report this Comment On March 29, 2009, at 4:03 PM, faheyd wrote:

    Hmm, I didn't wait until Oct 08 for Crammer's call. I got out of the market in Sep 08 and went straight to bonds. You had to be a FOOL or DEAD to not know what was coming. Crammer only saved people's money. The other morons, you included, wanted everyone to stay in the market and LOSE 60 percent of their retirement monies. Thanks to you, many grandparents lost their retirement.

    You should have been massaging Crammers ass for being a 'true' adviser and not LYING to the public that everything was GREAT.

    I'm not a Crammer lover, but your article is worthless and baseless. You need to switch to comic commentaries, as you have no idea what you are talking about.

  • Report this Comment On March 29, 2009, at 8:51 PM, jriggs6529 wrote:

    Kramer is an individual who has a daily show with which he has to entertain and and think of new 'advice' every episode. Hes obviously going to make a ton of bad calls, and his track record proves it. Barrons has tracked him a number of times, you can see hes performed absolutely horrible in the market.

    That being said, people watch his show for entertainment, and occasional ideas. To actually follow his advice would be a mistake and probably most don't. I have a real hard time believing people actually model their portfolio off of his.

  • Report this Comment On March 30, 2009, at 9:31 AM, therabidwhole wrote:

    Hey Jriggs, take it from a former stockbroker, numerous people actually do try to model their portfolio's after Jim Cramer's. If you notice, those aren't the same people calling everyday, and if you've ever tried to call into his show at any time, you know you can never get through.

    Now, as far as Warpaint is concerned, yes, MF is essentially selling the same product as Cramer, being investment advice. However, not only is there a significant difference between television entertainment antics - especially in an investment setting - and written word reports constituting actual verified information on company's investments, and various factors that can affect any investment. This is the type of information you need in order to do, as Cramer says, your homework. Reading these types of reports from S&P, Moody's, and various other authoritarian bodies regarding finance is doing your homework.

    I think what warpaint is trying to say is that it is ultimately up to every investor to either accept or reject any of the information they receive from any angle on any investment, which I agree with. I think what warpaint misses however, is what Stewart and MF are trying to point out, which is that there is a much bigger difference between the upfront type of "this is for entertainment, sit back and enjoy" type of entertainment that Jon Stewart presents, and the manipulative, misleading "this is market gospel, take my words as money and trade, trade, trade your accounts" type of entertainment that Cramer presents. It's the same difference that existed between the mortgage companies that actually did the right thing and didn't write subprime loans, but crushed by the greedy, "snake-oil selling, but stating it's gold" mortgage companies that wrote as many bad loans as they could sell to Wall Street. Those companies, like Cramer, were balling, living it up on top of the food chain, if you will. But they are bankrupt now, and thier directors are in hiding, if not exile thinking up their next schemes.

    The fact remains that in the Stewart/Cramer interview, in those internet clips, Cramer all-but admits to having manipulated the futures and pre-market trading as a Hedge Fund manager (which is illegal by the way and he admitted this on tv live, no investigation is under way into his actions or anything) and encourages other investment managers to utilize this practice, which he states clearly in the video is illegal! He also admits that he readily uses his show to "foment," which is to create or stir rumors that a company has either upward or downward pressure moving into it, which will obviously affect how an investor feels about investing in it, or shorting it. He admits that this is a tactic he uses in accordance with fund managers and companies alike, to manipulate the markets in either direction, and make money.

    Every investor needs to realize that they can only listen to themselves, and the only way to do that confidently and with an even "temperament" as Buffet advises, is to educate yourself as much as possible. Education is never ending and limitless. Learn the system and how it works. As a former broker that worked on Wall Street for a prominent firm dealing with domestic and inteernational clients, I can assure you that people do moronically listen to Cramer's words as gospel because he sells it as such, and MF and Jon Stewart are wise to awaken the masses that flock to "Mad Money" and other CNBC "financial minstrel shows" that work with these companies and organizations to perpetuate and move sentiment in whichever direction makes them the most money.

    Most people don't even know what it means to short a stock or the market, or even that you can make money in the market when it's moving in the downward direction. So they are obviously puzzled as to how if everyone is saying "buy, buy, buy this stock" why is it falling? Well perhaps they were saying "buy buy buy" so they could have someone to hold the stock up at this price while they "short short short" and once the buying subsides, the bottom drops out. Then those investors that bought bought bought are hanging on Cramer's ever word, and sound a bit bitter like Warpaint when people try to tell you maybe you shouldn't have so much faith in any one investment voice. Regardless, education is the key. Don't stop reading and researching the overall process, along with individual investments. Good Luck, but Wake UP!

  • Report this Comment On March 30, 2009, at 12:06 PM, med311 wrote:

    The first half of 2008 was extremely lucrative for natural gas investment and if you bought and held like TMF holds true you would have been crushed. In general, buy and hold is for suckers. You have to sell when your picks go up and then buy them again when they come down if you still like the company. If you bought and held an S & P 500 mutual fund 10 years ago you would have very little gain now (only capital gains and dividends if you reinvested or cashed out). I can only hope that anyone who listens to TMF's picks took profits. When your stock doubles, you take out your original investment and let the houses money run. Cramer teaches you the basic principles of investing in his books and show and tries to help the small investors learn from his mistakes. The bottom line is you have to do the homework on your companies otherwise you will get crushed, and no one else purports this advice other than Cramer.

  • Report this Comment On March 30, 2009, at 2:12 PM, wealthalizator wrote:

    What are you trying to say? I shouldn't listen to Crammer and listen to you instead? You are not giving me a good reason besides the fact that Marvel Entertainment and GameStop skyrocket over the last 5 years. And how many others that you recommended hit bottom? This whole article it's an advertisement for "Motley Fool Stock Advisor". Crap!

  • Report this Comment On March 30, 2009, at 2:48 PM, USofChina wrote:

    The articles on MF are getting stranger every week. First Cramer has no responsibility to tell anyone when to "get back in" that is a load of crap. And how certain are you (apparently certain enough to jump on the beat up Cramer bandwagon) the Market hit it's low on March 6th?? I'll tell you something else, had I listened to Cramer and yanked my 3M stock I wouldn't be down $48,000.00 right now. My parents wouldn't be down $175,000.00 right now.

    Is Cramer some guru of stocks as he has claimed? Absolutely not. Are you? Even further from it! Had you printed this article 4 months ago perhaps you would have some credibility, instead you wait until the guy has been put through the wringer by a comedian?? WTF?? This is as untimely as is possible. You talk about others jumping on the bandwagon? You missed the wagon all together and are apparently try to make a name for yourself by scooping up the poop left on the road from when the bandwagon went through town! What is with this crap for a lack of a better term? You are so far behind the curve on this yet you have the gall to state:

    It took only a few months for the rest of the nation to catch on. Jon Stewart finally jumped on the bandwagon earlier this month and exposed the man for what I think he really is: an entertaining (if not irritating) media personality, but certainly not the champion of the individual shareholder that he often claims to be.

    I am stumped on what it is you are trying to convey to us? Again Motley Fool is pulling some mighty strange shenanigans trying to rewrite the fact MF did no better than anyone else (especially no better than Cramer) in seeing this disastrous economic downfall coming. And if you did see it coming God Help You, because none of you shared those sentiments with the very people that keep this train on it's crumbling tracks.

    .

  • Report this Comment On March 30, 2009, at 3:10 PM, wuff3t wrote:

    USofChina,

    "Had you printed this article 4 months ago perhaps you would have some credibility, instead you wait until the guy has been put through the wringer by a comedian??...You talk about others jumping on the bandwagon? You missed the wagon all together and are apparently try to make a name for yourself by scooping up the poop left on the road from when the bandwagon went through town!"

    Err, no. TMF first printed this article 5 months ago - it says so at the bottom of this revised version.

    So I guess now you'll admit that they DO have some credibility :-)?

  • Report this Comment On March 30, 2009, at 3:13 PM, wuff3t wrote:

    therabidwhole - well said.

  • Report this Comment On March 31, 2009, at 9:03 PM, USofChina wrote:

    Please, go read the original article. TMF also has no more credibility than Mr Cramer, they however did not tell anyone to pull out their money, you think that was a bad move? So be it, the people that followed Cramer's advice are doing much much better than those that followed the advice given by TMF the same day. I'm sure TMF appreciates cheerleaders like yourself. I and many others (safely stated, more than half of paying members) have found Motley Fool to be a regrettable experience. My very first recommended purchase on Motley Fool $2500 in Frederick Brewery, literally over night the value of my stock drop to $9 and no that is not per share that is the result of a reverse split that went disastrous and the entire $2500 went P*O*O*F. Chalked it up to not everything works as expected, but each and every recommendation from a Motley Fool "contributor" I have either invested in or kept track of has tanked equally. So yeah, what a shock they dig up a 5 1/2 month old article and point out just how right they were, even if they were wrong at the time and proved to be wrong today. Anyone that followed Cramer's advice indeed is better of than those that left there money in, and it is not Cramer's responsibility to tell people when to get back in. And it is ridiculous to think it is.

    Nice try though...

  • Report this Comment On April 01, 2009, at 1:24 PM, roodycrooz wrote:

    As everyone else, Cramer, like The Fool, has his moments.

    Take for instance The fools pick LOOPNET (LOOP)

    which I purchased when advised....and lost about 90%.

    On the other Hand a recent (a few weeks) ago Cramer suggested (FCX) which I bought, and...it has already gone up over 40%.

    Who do I trust. Only ME. but ALL of these sourses help

    make whatever decisions that influence my portfolio.

    By the way, A think Cramers call on CAT is a good one

    (I will buy if it comes down a few dollars) and I love the yield on (NAT) although I dont see much Upside

    on the stock itself...and right now I DO have to get back the 60% or so losses I have incurred by NOT listening to Cramer when he said to take the money out of the market (In October). Oh well. Buy Buy Buy.......

  • Report this Comment On April 01, 2009, at 3:48 PM, mikecart1 wrote:

    The best investors listen to as many resources as they can and then make a calculated decision themselves. If you are going to listen to just Jim Cramer, or just Warren Buffet, or Nick Kapur, or any other person on here or elsewhere, then you aren't really investing at all. You are doing what others are doing and are following OTHER's investments.

    Also you pick 2 of the best picks from Motley Fool. So basically you are doing what people claim Cramer to do - highlighting your best and ignoring your worst.

    It's funny how so many people on MF have this awesome advice yet their bank accounts don't quite match up to those they usually make fun of:

    Buffet

    Cramer

    any other Investor

  • Report this Comment On April 01, 2009, at 11:02 PM, mkris1 wrote:

    And Cramer's advice was bad because??? Oct. 6, 2008; S&P 500 at 1,056.89 vs. Mar. 27, 2009 at 815.94. Are you kidding me? TMF has become a big joke these days.

    Cramer did save me loads; whoever listened to him when he said to sell equity if they needed that money for the next 5 years, did save LOADS.

    An example of sour grapes. Nick Kapur, you suck!

  • Report this Comment On April 01, 2009, at 11:52 PM, USofChina wrote:

    Back again for round three! Just had to add:

    You know Nick, there are many reasons NOT to listen to Cramer, as there are lots of reasons not to listen to most investment "gurus" but the last reason on earth to not listen to Cramer was his advice for people to pull their money out of the market.

    Ok one more:

    The Foolish bottom line.

    Always talk about your best stock picks i.e. Marvel Entertainment and GameStop and completely ignore your failures when slamming another investment analyst!

    Makes for a good stomp on the ear after the guy is already on the ground eh?

    ...panic-inducing market calls? That is the most ridiculous statement ever made by anyone in the stock market game. There are panic-inducing market calls made thousands of times per day. Why not throw in a "buy low and sell high" too?

    Fools we are indeed

  • Report this Comment On April 02, 2009, at 2:06 AM, but0tocks wrote:

    Quadrillion comes after trillion. I hope the government never uses THAT number.

  • Report this Comment On April 02, 2009, at 12:18 PM, nvmk wrote:

    I'm sorry - but the same would apply to many of the picks MF has done. I'm now sitting on almost worthless stocks of HNSN, IMMR, INFN & AIB. All of them hurting me, and all of them at one time or another Rule Breakers or Hidden Gems or some other newsletter stock picks. Yes - I did leave all those subscriptions when I realized, I was paying 300$ / yr or so and LOSING money at the same time. I still like MF for the service they provide, and am an active member of your subscriptions. That doesn't mean that I trust you implicitly. HOWEVER, I DO WISH I DID WATCH THE SHOW IN OCTOBER - I'd HAVE PULLED OUT ALL MY MONEY AND HAD A FEW $s LEFT THAN THE pennies I have right now! I didn't appreciate much of what John Steward did to Cramer. FWIW if you did pull your money out in October and started putting your money back into some of the stocks now - you'd be a much better happy camper.

  • Report this Comment On April 02, 2009, at 12:33 PM, thefoxbox wrote:

    http://consumerist.com/5116676/jim-cramers-advice-slightly-w...

    Everyone seems to have glowing reviews of Cramer. Hopefully you guys didn't find any polyps up there.

  • Report this Comment On April 02, 2009, at 12:39 PM, thefoxbox wrote:

    First of all, faheyd, no one should have ALL OF THEIR MONEY in one form of investments. If you're doing something that idiotic, you may not deserve to have what could happen (and did), but you certainly shouldn't be able to cry about it. Like one guy who was on CNN invested 97% of his millions with Madoff. Seriously?

    Let's start learning some lessons... This is the best time.

    And another thing. You should NOT have any money that you'll need within the next five years in the stock market anyway... This isn't new... Idiots everywhere.

  • Report this Comment On April 02, 2009, at 4:36 PM, Deepfryer wrote:

    I don't think Cramer deserves as much criticism as he's been getting. His message to sell in October was correct, after all - and screaming about it may have been the best way to get people to really hear what he was saying.

    As for the "blue chips", they haven't faired so well lately, including the ones that you mentioned. Even the "safe" fast food stocks like YUM have been hammered, and other staples like CAT and GE have been completely decimated. The Motley Fool even says, over and over again, "small caps lead the economy out of a recession". So, why should we invest in the blue chips?

    The U.S. is a mature market now. If you just buy large-cap, American companies and hold them for 20 years, you won't get the same returns that you would've made in the past. 3% per year is probably all you can expect to make through "buy and hold" investing of large, American companies.

  • Report this Comment On April 02, 2009, at 4:36 PM, Deepfryer wrote:

    I don't think Cramer deserves as much criticism as he's been getting. His message to sell in October was correct, after all - and screaming about it may have been the best way to get people to really hear what he was saying.

    As for the "blue chips", they haven't faired so well lately, including the ones that you mentioned. Even the "safe" fast food stocks like YUM have been hammered, and other staples like CAT and GE have been completely decimated. The Motley Fool even says, over and over again, "small caps lead the economy out of a recession". So, why should we invest in the blue chips?

    The U.S. is a mature market now. If you just buy large-cap, American companies and hold them for 20 years, you won't get the same returns that you would've made in the past. 3% per year is probably all you can expect to make through "buy and hold" investing of large, American companies.

  • Report this Comment On April 02, 2009, at 4:43 PM, Deepfryer wrote:

    Sorry about the double post.

    In response to Warpaint's earlier post, I just want to point out that Stewart wasn't calling out Cramer for his "bad calls". Did you see the interview? Stewart was calling out Cramer because of what he viewed as misleading and unethical behavior.

  • Report this Comment On April 02, 2009, at 4:59 PM, wuff3t wrote:

    "Please, go read the original article. TMF also has no more credibility than Mr Cramer, they however did not tell anyone to pull out their money, you think that was a bad move?"

    I thought your original point was:

    "Had you printed this article 4 months ago perhaps you would have some credibility..."

    ...which they did. I did read the original article, and I am definitely not a cheerleader. Cramer may or may not have been right or wrong (we'll come to that later) but to accuse TMF of inconsistency is plain wrong. They published this article before you state they should have, and haven't changed their tune at all. Kudos to them.

    "TMF also has no more credibility than Mr Cramer, they however did not tell anyone to pull out their money, you think that was a bad move? So be it, the people that followed Cramer's advice are doing much much better..."

    Well, you might be right - and if so I wish you well. But history tells us that staying in the market, even through savage downturns, works out better in the end. TMF posit that a long-term approach works best (backed up by all the numbers) so trying to judge them over a few months isn't necessarily helpful.

    "I and many others (safely stated, more than half of paying members) have found Motley Fool to be a regrettable experience."

    'Safely stated'? Based on what? If you're going to quote statistics then please do so. Can you really say that you know more than half the paying members of TMF and that they are all unhappy? Or were you just getting carried away?

    Listen, all the best (seriously, I mean it) with your investing. But TMF is sticking to its guns, and the numbers back that up as the best strategy. We will only know five years or more from now whether their calls today are right or wrong. But despite the differing opinions of their staff writers I think they deserve respect for their collective belief that the numbers don't lie - you're just better off leaving your money in than flip-flopping it about.

  • Report this Comment On April 02, 2009, at 9:21 PM, wuff3t wrote:

    I think the point of all the TMF articles is that you should educate yourself. But there really is no need for college level degrees in economics etc - anyone who's intelligent can read a balance sheet and make sense of it....

  • Report this Comment On April 02, 2009, at 11:08 PM, ralphmachio wrote:

    I see a larger problem than Cramer good? Cramer bad? It's not really a problem, so much as it is the way of the world. Would it be possible for someone to go on TV and tell people the stocks that will always go up? Can everyone be a winner? Where would the money come from if no one lost? My question has always been, what's the house's cut. You get winners from Cramer just like you get truth from the TV, or an education in school, etc. some will always be convinced they are educated, know the truth, or got a winner from Cramer. Most in fact. That is the essence of what is wrong with this country, if not planet. Most of what people 'know' is wrong, and they don't have the capacity to learn or change, because they were never trained to critically think. that is why school white washes history, TV white washes the news, and as for Cramer, 3 weeks ago, it was don't buy Citi at 1.00, this week it's buy Citi at 2.50? you gotta be a bit slow to not see the fault in this, but it was them telling me not to buy Citi( and the insider buying) that made me make my first 100%+ profit.

  • Report this Comment On April 03, 2009, at 9:15 AM, Xciteddon wrote:

    You have to remember ultimately it is your money. If You choose to follow advise from certain people and are too lazy to do your own homework then you pay the price. Learn to take responsibility for your own actions and the key word is LEARN. TMF is a learning tool to learn to make intelligent, informed, fact based decisions on what you will buy and sell. You have to take ownership of your own mistakes. We are all human and we all Will make mistakes. Even experts. There are lots of places to place blame but YOU make the action!

    Good Investing!

    D

  • Report this Comment On April 03, 2009, at 2:45 PM, ShawnPeat wrote:

    You say Cramer gives bad advice whith all of his "Buy, Buy, Buy" or "Sell, Sell, Sell" recommendations without considering the trading cost or tax implications and costing investors to loose money. But how much money would did you make or loose listening to TMF. One of the stocks they recommend most is Marvel Entertainment (MVL). I use to own it until late last summer, but sold it after the great run that Iron Man had in the theaters. This was in part based on a recommendation from Cramer to sell the stock and lock in some profits after its big run up. He did have recommend it as a buy prior to that point. All I remember of the TMF was them patting themselves on the back about it being a "10 bagger" and to keep buying more of it. I don't remember ever reading any advice from TMF to sell it. Since that summer high the stock fell 40% in value from a high of $38.50 all the way down to $22.80 just two weeks ago in mid-March. So who made you more money if you took there advice - Cramer who told you to sell it and take some profits and maybe reinvest in it now as it's starting to rise with the pending release of the X-Men movie or the TMF who recommended you continue to buy it as moved down and lost 40% of its value? I know I'm better off for having sold it last summer when it was in the high thirties.

  • Report this Comment On April 03, 2009, at 6:04 PM, 1Bagger wrote:

    What I would like to hear from anyone at TMF is if they honestly, truly believe that all of their subscribers only invest with money that they do not need in the next five years. I absolutely guarantee that people who frequent this site - and those that subscribe to your services - don't heed that advice. Moreover, don't you think the definition of money that you may "need" in the next five years has changed dramatically given the current economic situation?

    Your saying "don't invest any money you may need in the next five years" is as empty, shallow, and ridiculous as Cramer saying "do your homework."

  • Report this Comment On April 03, 2009, at 6:21 PM, outrigger70 wrote:

    Very disappointed in TMF. I am an avid Cramer watcher and to say he doesn't know what he is talking about is ludicrous. NOT saying he is perfect nor right all the time, but his education AND hedgefund experience speaks for itself, and OH yeah he has a national TV show! Further he states every show he is there to edcuate and entertain. Some don't like his crazy antics which understandable. Personally i look forward to his show every day and and done well following his advice as well as TMF.

    Have been a MF fan but quite frankly i agree with all who say stick to the market, trying to bring others downs makes you look bad!

  • Report this Comment On April 03, 2009, at 6:47 PM, IRABound wrote:

    I agree with "Xciteddon" -- the bottom line is that it is your money and who you decide to take advice from is your business. However, as an investor, you need to take responsibility and do your own homework. There are several sources to get fact-based information on making investing decisions. I personally took advantage of October's panic to sell -- I bought...good companies at very low prices!

    Happy Investing!

  • Report this Comment On April 03, 2009, at 7:53 PM, MASTERofGREED wrote:

    The best investing advice I have ever heard came from the Oracle of Omaha, Warren Buffett. "When others become greedy, be fearful. When others become fearful, be greedy."

  • Report this Comment On April 03, 2009, at 8:13 PM, NoEmotions wrote:

    I am SO tired of the trite and undignified Cramer bashing by TMF. It is so uncalled for and I wish TMF would stop it.

    TMF and Cramer have different investment philosophies and styles. TMF goes for the long haul while Cramer believes that noone can make money via a "buy and hold" mantra. It is also interesting that no professional trader (think Wall Street), does "buy and hold either, but we aren't suppose to act like "them".

    In the end, each of us has to pick what works for us as individuals. For me, a mix of both philosophies works...a mix of solid companies etc. (TMF) while sometimes taking advantages of market plays when I think they will work based on Cramer recommendations.

  • Report this Comment On April 04, 2009, at 12:38 PM, aaaaaah wrote:

    There are always nuggets of information from sites like TMF or shows like Cramer. Cramer is just too noisy and hyper for my temperment.

    As far as TMF and other pundits, of course the objective is to make money. Selling adverts, memberships or whatever. Be kind of silly for someone to lose money by giving investment advise.

    Anyone who invests based solely on any of this commercial advise is someone with the temperment of Homer Simpson taking T.V. commercials as factual "must but nows".

    If the temperment is to buy or sell because your told or recommended to by commercial advise. Stay out of investing or at least stop exposing yourself to the "commercials". I am not aware of any advised trend that cannot be observed from being active in society and reading the non-investment news.

  • Report this Comment On April 04, 2009, at 6:12 PM, rtryng wrote:

    TMF, like Jon Stewart, make accusations, cowardly via e-mail and sitting behind desks. First, get on a nationally-televised show, on a major network that people actually watch, like Mad Money and CNBC. Then, find your spines, and say what you want. You're not in Cramer's league and after criticizing him, you've established to anyone with common and investing sense that you'll go below the belt to get an audience. And I'm supposed to trust YOUR financial anecdotes?! Go hang with Stewart on Comedy Central - you're all nothing but FOOLS and jokes.

  • Report this Comment On April 04, 2009, at 6:31 PM, IIcx wrote:

    To Jim's credit, he has repeatedly stated that you need to wait for pullbacks and invest wisely in great companies that pay dividends. His points about investing are sound but his repeated "prize stocks" are out of the reach of most investors and the stocks are so high that they are logical targets for shorts.

    He commented on Friday that if you have stocks that are 50+% you should sell and not be greedy. Oddly, he also said that if you haven't invested so far that you missed the rally.

    Hello? If you sell, should you sit like a duck waiting for it to rain?

    To many mixed messages for me to trust the "show".

  • Report this Comment On April 06, 2009, at 8:04 PM, 643dog wrote:

    Cramer is entertaining and he has some good comments about companies, interviews with CEO's, tips on basic investing, so he can be helpful to individual investors. I don't think anyone in their right mind shouls make "calls" about anything! Not only is it imprudent, its presumptuous as well and can get people in a lot of trouble if they listen to you. Henry Blodget said it was incredibly arrogant of Cramer to think he could give accurate and productive advice to investors on his "lightening round". Even though, Blodget can't work in the industry anymore, I'll give him that one, however I will also include its more arrogant to think you can give "objective" takes (as an expert?) on the financial industry when you've been banned for life! Take away the calls on the market and lightening round and I think Cramer's show would be helpful to beginner investors, not just entertainment. Oh, and the John Stewart show's call on Cramer??? I bet anyone could take out takes of anyone's comments and make them look like a fool! It wouldn't be hard to do it to John Stewart!!!

  • Report this Comment On September 12, 2009, at 10:25 AM, paandrus wrote:

    I feel this article is unwarranted. I've watched Cramer since his show started in 2005. He has never advocated putting short-term needed cash (less than 5 years) in the market, nor has he advocated putting retirement money in individual stocks. His show is designed to teach people how to invest with their discretionary money only. Hence the name "Mad Money". He also teaches that the first $10,000 of this money should be in an index fund.

    What he has done is reach out to young college students and teaches them that the market is not such a scary place to invest for their future. His target audience are these young people with limited cash, that have years to invest, and need to diversify over time. This requires taking gains when you have them and using those funds to diversify into other stocks in other industries. The commissions are low. These young students' taxable income bracket is low enough that taxes will not significantly impact their gains.

    I think he has done marvelous things for our younger generation while making a boring topic entertaining and fun. Keep up the good work, Cramer.

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