"Don't Remove Your Money From Bear!"
I have reached the now inescapable conclusion that Cramer's show is structurally unsound.
Its something I suspected for the past few months, and this now absolutely confirms it. Its not the specific outcomes, but the process I am questioning. You simply cannot do the requisite home work and deep thought necessary to intelligently discuss dozens if not 100s of stocks per week, PERIOD.
Cramer gets big kudos for creating TheStreet.com, and for bringing a refreshing bluntness to CNBC. However, filling 5 Hours of weekly TV time by himself has become madness. It leads to disasters "misundertandings" like this:
"Bear Stearns is fine -- do not remove your money from Bear"
>
This sort of stuff is easily preventable.
My advice? Three Simple things:
- Revamp the show, bringing in a partner or even a panel.
- Use more guests to take the workload off of Cramer.
- Learn to occasionally use the following phrase: "I DONT KNOW."
There is nothing wrong with a "no opinion on that stock" when you simply are not updated, or are lacking in time to do the homework.
via Liveleak
Source:
Oops - CNBC's Cramer Said 'Don't Move' From Bear a Week Before Collapse
'Mad Money' host drastically underestimated the investment bank's trouble surrounding the mortgage crisis.
Jeff Poor
Business & Media Institute
3/17/2008 3:19:20 PM
http://www.businessandmedia.org/articles/2008/20080317110946.aspx
Tuesday, March 18, 2008 | 04:30 AM | Permalink
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Comments
Can we get a video of the Bear CEO saying essentially the same thing?
A little more significant than this momentum trader, I would imagine.
Posted by: Paul Jones | Mar 18, 2008 5:06:56 AM
I guess that was a misunderstanding. They did not talk about the BS stock but about actual money or investments you had WITH the bank (like them beeing your broker). It was all about the liquidity of the bank in relation to the customers of BS.
Nevertheless, Cramer is my personal Oprah. He is so amusing. Don't take him to serious.
P.S. Remember his warning of a subprime collapse last summer. That wasn't bad.
~~~
BR: And, I give him credit for telling people to buy Bear Stearns Bonds -- that was a good call (albeit a high risk one)
Posted by: Sebastian | Mar 18, 2008 5:08:28 AM
I came here to say what Sebastian said, above.
Posted by: Troy | Mar 18, 2008 5:30:04 AM
Couldn't agree with you more BR. His show is very entertaining though, and he does explain a lot of things that you can't get elsewhere. Markets are complex and people need to realize that Jimmy, "he don't have all the answers!"
Posted by: JustinTheSkeptic | Mar 18, 2008 5:40:03 AM
Stuff you could have bought for around the same price as Bear:
- A middle-market NHL team
- Alex Rodriguez's contract
- 2007's salary for the top 4 or 5 at Goldman, Sachs.
- The top 5 floors at 15 CPW (which wouldn't give you as much square footage).
- Larry Ellison's yacht.
- Half of Prince Alwaleed's plane.
Posted by: druce | Mar 18, 2008 6:33:48 AM
Yep, That Cramer... What a fool... he isn't as perfect an oracle as all of us... Seems confirmed... again, he is not the second comming of Christ.
Posted by: Eric Davis | Mar 18, 2008 6:51:31 AM
Cramer used to have a partner--but their egos were too strong to work together.
Posted by: hal | Mar 18, 2008 7:13:09 AM
I almost feel bad taunting Cramer at this point. Kudlow, on the other hand? I think that guy deserves taunting all day long.
Posted by: Florida | Mar 18, 2008 7:16:00 AM
it is too bad the fed or sec cannot go back and retrieve the 35 billion a year of ill gotten bonuses over the past several years becasue the profits or illusionairary profits generated the past several years to pay bonuses now apppear to be bogus.
same thing for the mortgage brokers who drained massive bonuses out of the now bk mortgage cos.
Posted by: Hal | Mar 18, 2008 7:22:58 AM
What??? Cramer is for entertainment only???
Trying to play his show could be dangerous to your wealth???? Thank you Doc Obvious.
and no SH*T Sherlock!!!!!!
I do think there may be a way to fade the guy on a regular and profitable basis but I can't watch him every night so there goes that idea. I bet someone is though.
Posted by: lurker | Mar 18, 2008 7:30:11 AM
So, are you claiming that anyone who had a brokerage account at BSC is in trouble? If so, what is the SIPC for? Are you claiming that brokerage account money just went up in thin air? Or are you just drifting between owning BSC stock and having a brokerage account with no distinction?
Posted by: cinefoz | Mar 18, 2008 7:31:39 AM
Why not take a look at the WSJ, Section D page 1 "Investors Need Not Fear Their Brokers' Travails". They don't seem too concerned for account holders. Why should Cramer?
BTW, since my last rant about the WSJ, they appear to have go back to business news, as opposed to their possible tiptoe into sensational, slanted, scary business news. I'm happy to see it return. Maybe it's my imagination, but even the editorial page is easier to read now.
Posted by: cinefoz | Mar 18, 2008 7:40:14 AM
cinefoz - nope, Ben realized liquidity injections weren't doing the trick so they upped the OxyContin in the water supply. Takes the edge off.
Posted by: curmudgeonly troll | Mar 18, 2008 8:07:50 AM
BR: The "e-mail this post" feature at the bottom of each one of your blog entries no longer inserts the site address link in the e-mail message. It used to, which made it easy to send it to someone else.
Posted by: Chief Tomahawk | Mar 18, 2008 8:08:09 AM
I have to agree with the no shit Sherlock point.
He was a pumper and dumper when he was a hedgie to manipulate in his favor and he cared little about the sheep.
His record is worse than market averages. He is criticized for pumping stocks of companies just before they went bust in the Dot Com bubble. Hmmm, seems familiar.
The fact is, He said Bears was fine, which it wasn't. Gee thanks Jim.
It's just bad Kharma that he ruins many for personal gain. He is the type that will end up in a van down by the river.
Posted by: ken h | Mar 18, 2008 8:09:36 AM
I personally think Cramer is dangerous. There are many people who take him seriously and listen to his advice, but he is wrong more often than almost anyone I can think of. It's not just that it's unrealistic to expect anyone to know that many stocks; he's just a buffoon. He's wrong about everything. Now, after all of the carnage, is he telling people to stay away from financials. I can't tell you how many times he's advised buying them. Just a buffon, pure and simple.
Posted by: Peter Davis | Mar 18, 2008 8:12:02 AM
Have to tell you as someone neither bear nor bull this is a terribly frightening period - probably the worst since the great depression. What have the rate cuts done to this point except lower the dollar? This continued Band Aid approach defies logic. NO ONE in the media is mentioning the over leveraged consumer. Two-thirds of the American economy struggling to get by. Over extended sitting on a pile of negative equity has been conveniently overlooked because there aren't any sound bite antidotes or graph charts to spin in favorably. Instead, rather than allow a correction to happen over a period of time that would right this sinking ship, the pundits continue to blow sunshine up the proverbial stock market skirt. Folks, the feds LITERALLY facilitating the takeover of Bear Stearns spits in the face of free commerce and American capitalism. The stock market is a house of cards and pundits are doing nothing more than putting shrubbery out front to increase the "moral" curb appeal to the mainstream public.
Posted by: Able2Fly | Mar 18, 2008 8:24:47 AM
Another one for our list of carnival barkers who were dead wrong. People really follow this man's advise?
Posted by: SPECTRE of Deflation | Mar 18, 2008 8:30:24 AM
another reason it is called "mad" money.
Posted by: mj | Mar 18, 2008 8:30:49 AM
Barry, I stopped watching Cramer and started watching Fast Money for that very reason. A panel is more informative than any 1 person.
Having said that, I tuned in yesterday to see what he would say about his Bear Stearns call last week. His response?
[paraphrasing] "People may have misunderstood me last week...I was telling them they didn't need to move their accounts to another bank...their equity holdings was another matter."
Complete BS. People don't call in to ask about the best savings accounts and he knows it. Clearly, the question in the video pertains to money in Bear Stearns stock.
Regards,
George
Posted by: Agoracom | Mar 18, 2008 8:33:38 AM
An observation I note when listening to people discuss Cramer is it is amazing how many people will ridicule and chastise Cramer, yet many of those very same will perk up all ears, often in the same conversation when someone says Cramer recommended this or that stock. Listening to Cramer is free and IMO, you get what you paid for. Seeking clarity from reliable sources is part of doing your own DD, to be done at all times. Sometimes you get it, sometimes you don't but it's absurd to include Cramer as thoughtful. Unfortunately IMO that is the reflection of the mindset of many people, that they consider Cramer reasoned and thoughtful DD. I would argue that most of those very same people also believe inflation is 2% or the unemployment rate is 4.8%.
Posted by: Stuart | Mar 18, 2008 8:38:51 AM
No matter what Cramer tries to defend about what he said last week, it's a matter of fact that he did recommend buying BSC at $89 at the end of January on his show, after it had rocketed up from 67 in about two days time.
Did he ever issue a sell recommendation?
Posted by: Todd | Mar 18, 2008 8:42:54 AM
"By midday Sunday, however, after looking over Bear’s books and saying it was scared stiff by what it saw, JPMorgan dropped its price to $2 a share."
After Cramer ranted on about how the wall street banks were broke, which btw makes his BSC recommendation not to sell all the more disingenuous, one wonders how he could not have suspected a quote like this to emerge. BSC will have alot of company IMO. It must be the case. It was engaged in the same business as many others in the same manner as many others with, in some cases, even less leverage. To assert it is the last is simply not credible, especially when considering it was likely counter-party margin calls that finally brought it down, a risk all are exposed too.
http://www.nytimes.com/2008/03/18/business/18sorkin.html?_r=1&ref=business&pagewanted=print&oref=slogin
Posted by: Stuart | Mar 18, 2008 8:47:20 AM
But Bear Stearns DID get taken over. In that sense, Cramer was right. He was probably expecting an arbitrage situation coming up, which is why he said to 'hold'.
I used to watch Cramer in the first year or so because he was entertaining. I had to quit because my brain was turning to mush.
Posted by: cliffynator | Mar 18, 2008 8:49:01 AM
HEY PAUL JONES!!
ARE COMMODITY FUTURES MARGINS GOING TO RISE TO 50% TO SPECULATE??
PLEASE ADVISE
Posted by: Trigalet | Mar 18, 2008 8:55:21 AM
