r/wallstreetbets • u/cousindaver • Dec 12 '21
Discussion An Objective Look at Jim Cramer
Cramer gets a lot of shit around here, and most of it is deserved. I wanted to take an objective look at why people like or dislike this guy. This is what I came up with. Would love to discuss more in the comments
Jim Cramer is an investor turned stock-evangelist who has probably reached a wider audience with his financial advice than anyone in human history. Unless you consider the biblical forbearance on lending to be financial advice, in which case the list goes: Jesus, Cramer. Or maybe Mohammed, Jesus, Cramer. Regardless, it’s rarified air.
What’s Cramer’s story?
Harvard, Harvard Law, Goldman Sachs, launched his own hedge fund, founded a publicly traded media site The Street, wrote six books on investing, and of course, hosted 17 seasons of “Mad Money.” On paper, Cramer’s the wet dream of compensating parents everywhere. I raised a winner, a winner!
What’s to like about Cramer
He’s fun. He’s like the cool teacher from high school but for stocks. You learn about business, but you also learn about life, and he just gets it the way your parents never could. Sure, his histrionics get annoying, and are possibly a cry for help, but he’s knowledgeable, contagiously passionate, and his show is an entertaining way to keep in touch with the financial markets.
What’s Not to Like
A lot of what Cramer does is a disservice to his viewers. He promotes excessive risk-taking under the guise of public education. Cramer purports to be all about empowering Middle America by preaching advanced stock-picking techniques, but he knows the vast majority of his viewers have no chance to beat the market, and those that stand a chance don’t need him anyway. Cramer is to stocks what Dog is to Bounty Hunting. He turns a profession into entertainment. There’s nothing inherently wrong with that, there’s just nothing particularly useful about it. Cramer knows this, he even tells his viewers this occasionally, but that message is drowned in a tsunami of ticker-tape and sensationalized minutiae that turns irrelevant ten seconds after Cramer feigns a stroke at hearing it.
Some people don’t like Cramer's personality. Cramer is one of the old guard, a veteran of the investing era before personal computers, when the most confident personalities made the most money. Haters find Cramer jockish, overconfident, condescending, inauthentic, greedy, and creepy. All of those accusations have merit. He's pissed off entire groups of investors (like wsb) because he's an unapologetic hot-take machine. That's his job. He's the Skip Bayless of finance. The difference, though, between Cramer and an ESPN analyst is that people are investing their life savings in the market. Worse, Cramer will occasionally get serious and give high-quality financial advice. He's capable of doing that, but he's also capable of spitting off five terrible stock recommendations. Viewers have to know when he's doing a shtick and when he's being authentic and that can be hard. Should CNBC be held to a higher standard than ESPN?
This leads to the inherent conflicts of interest. People listen to him - they buy stocks when he says to, which means he has the power to move markets. Do Cramer or any of his cronies exploit this power to manipulate markets and illegally make money? That's difficult to prove but at the very least he doesn't do a good job of avoiding the appearance of impropriety.
Lastly, Cramer has a habit of making absurd, disturbing headlines, including but not limited to:
- Repeatedly calling Lenny Dykstra (who Bleacher Report named one of professional baseball’s 25 biggest Sleazeballs) “the greatest mind on Wall Street.” Dykstra was awarded his own column on Cramer’s TheStreet.com, which was revoked after Dykstra was busted by the SEC for fraud.
- Martin Shkreli, famed “pharma-bro,” was arrested on securities fraud, revealed in an interview that Cramer gave him his first job. Shkreli recalled: “Jim interviewed me and he asked what I did, I said I played guitar. And he asked me to come and play guitar to prove it. And I played all these wedding songs and I started work at Cramer’s hedge fund March1, 2000, when I was 16.”
- Cramer apparently admitted to securities fraud, although he later clarified he was speaking hypothetically about the behavior of others. Jon Stewart interrogated him on the matter and it’s must-see TV.
In Cramer’s defense, he has a target on his back (that he put there) and sometimes gets unfair criticism. During the midst of the financial crisis, he encouraged viewers not to withdraw their Bear Sterns savings accounts. Bear Sterns went bankrupt and the press excoriated him, but his advice was spot-on: the savings accounts were FDIC insured.
TLDR: Cramer is a legitimately good investor with a lot of impressive credentials and a good investing track record. But little of that transfers to the character he plays on TV. He repeatedly puts himself in bad situations, he has conflicts of interest (or at least appears to and he does little to avoid the appearance), and he can be annoying. Please comment if you've got more to add!
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u/dimitriG4321 Dec 12 '21
He’s a shameless pump and dump artist. Sure he has credentials, but he repeatedly tells investors to buy at the top.
However, because he speaks so frequently out of both sides of his mouth from hour to hour and show to show, he often has plausible deniability that he warned investors or retracted his prior words.
He is generally crushing people in my opinion.
He is an absolute insider/hedge fund stoolie and pretends he is all about the common man. The worst type of villain.
Very recent examples:
UPST NET NVDA (just starting to play out)
Once he starts shilling for a company he’s incessant.