Cramer Does It Again with CIT Call

When will the SEC start regulating game shows masquerading as investment advisory? This weekend, CIT Group filed Chapter 11. Merely four weeks ago, Mad Money host and TheStreet.com (TSCM) founder Jim Cramer said he would buy CIT (CIT) (”Citi and CIT are Primed for Upside“).

This type of incredibly speculative advice is as radioactive to the general investing public as a post nuclear explosion site: (Click to enlarge)

As you can see in the chart above, Cramer recommended to buy CIT at the exact top. Thus, if “In Cramer You Trust” (like the CNBC commercials tell you to do), you are probably going to have lost 90+% of your investment by the open on Monday.

When Jim reads this he will probably email me again and ask me to remove the post and apologize to him. I suggest his remaining viewers email him and ask him to remove his stock picks from Mad Money and TheStreet.com as well as apologize. If Cramer was an honest guy and didn’t pathologically believe his own spin, he would add himself to his Wall of Shame. Unfortunately, if you now attempt to manifest the mission of his new book “Getting Back to Even”, you need to find an investment in which you can double your money. Vegas, anyone?

Comments

[TheCarCzar]

Cramer is a closet Commie.

2009 Nov 02 05:12 AM

[logicalthought]

Cramer is a smart (and often funny) guy who is horrendously irresponsible for making buy and sell recommendations on thousands of stocks on which he can't possibly have time to do his homework. The world changes very quickly these days, and thus there's no way ANYONE can follow more than, say, 20 or 30 stocks closely enough to make informed buy or sell recommendations about them, and yet Cramer-- whose time is stretched unbelievably thinly with all of his various projects-- has the nerve to try to do this for THOUSANDS of companies? This is grossly irresponsible, and he should give serious thought to admitting this and reformatting his show accordingly.

2009 Nov 02 07:51 AM

[J. Bruun]

I think (and hope) that these people like Cramer and those you see being hyper active on pages like this are in fact just faces to a minor organization who publish in the name of one person.

That being said when Cramer talks with his usual strength of conviction it is very tempting to think he can't always have the specific knowledge to back it up.

Jan


On Nov 02 07:51 AM logicalthought wrote:

> Cramer is a smart (and often funny) guy who is horrendously irresponsible
> for making buy and sell recommendations on thousands of stocks on
> which he can't possibly have time to do his homework. The world changes
> very quickly these days, and thus there's no way ANYONE can follow
> more than, say, 20 or 30 stocks closely enough to make informed buy
> or sell recommendations about them, and yet Cramer-- whose time is
> stretched unbelievably thinly with all of his various projects--
> has the nerve to try to do this for THOUSANDS of companies? This
> is grossly irresponsible, and he should give serious thought to admitting
> this and reformatting his show accordingly.

2009 Nov 02 08:08 AM

[SouthernBeachGuy1960]

Good Article.......... Cramer and his Cronies at The Street, give some Sad Advice.

2009 Nov 02 08:49 AM

[buoy]

I like Cramer b/c he's not a fall-in-line guy, but some of his mistakes are doozies.

2009 Nov 02 09:15 AM

[fran grady]

Cramer has tanked many a good stock. His ditto heads follow him blindly. Good article guys!

2009 Nov 02 09:24 AM

[kgeechee]

Your math skills are as bad as some of Cramer's stock picks. Double your money after a decline of 90% won't help much. Assume $10K invested, 90% decline to $1k doubled to $2k; I am not even; I'm $8k short. Double again at $4k and again at $8K and I'm getting closer; only $2K short now after 3 stellar picks in a row. Moral: forget the math (and spelling). Use protective trailing stops. Yes, sometimes you get closed out on an immediate 'short' run and the stock recovers to a decent profit. Those are the breaks. It won't happen often.

2009 Nov 02 09:38 AM

[Michael Comeau]

Stops don't help when a stock gaps against you.


On Nov 02 09:38 AM kgeechee wrote:

> Your math skills are as bad as some of Cramer's stock picks. Double
> your money after a decline of 90% won't help much. Assume $10K invested,
> 90% decline to $1k doubled to $2k; I am not even; I'm $8k short.
> Double again at $4k and again at $8K and I'm getting closer; only
> $2K short now after 3 stellar picks in a row. Moral: forget the math
> (and spelling). Use protective trailing stops. Yes, sometimes you
> get closed out on an immediate 'short' run and the stock recovers
> to a decent profit. Those are the breaks. It won't happen often.

2009 Nov 02 09:47 AM

[wall street cheat sheet]

Oops. You're correct. I meant to add that you need multiple investments to double. I wrote that on the fly late last night after a long day watching football and having a few brews with the family ...


On Nov 02 09:38 AM kgeechee wrote:

> Your math skills are as bad as some of Cramer's stock picks. Double
> your money after a decline of 90% won't help much. Assume $10K invested,
> 90% decline to $1k doubled to $2k; I am not even; I'm $8k short.
> Double again at $4k and again at $8K and I'm getting closer; only
> $2K short now after 3 stellar picks in a row. Moral: forget the math
> (and spelling). Use protective trailing stops. Yes, sometimes you
> get closed out on an immediate 'short' run and the stock recovers
> to a decent profit. Those are the breaks. It won't happen often.

2009 Nov 02 09:49 AM

[Erwin]

Not only is he irresponsible and hurts numerous novices, but to ad to his resume he is a lyre. Checking the last week of October on a Daley basis, the numerous miss calls and consequently the next day comments of how he made correct calls.
CNBC should be ashamed in periodically running the
"In Cramer we trust"
ads. The disclaimers may take them of the legal hook, but certainly not the moral one.
We wonder if the financial rewards of having him on equates to the large number jumping ship to Fox?

2009 Nov 02 09:57 AM

[DonFurio]

An investor should rely on Cramer's opinion as one part of the investment process, but clearly not listen to every word he says. I'm curious if you actually read the whole article, I did not, but I can't imagine anyone would be buying CIT within the past month if they didn't believe it was a big speculative play. I give Cramer credit for calling a year in advance that housing stabilization would occur in the summer of 2009.

2009 Nov 02 09:57 AM

[Trader85]

Kramer, Kudlow, Leisman, Neal, et al. are the paramount of irresponsibility. Think about their recommendations and guest "experts". There is absolutely NO accountability for any of them. They are relentlessly obnoxious and confrontational about everything; honestly have you ever heard a guest finish a complete thought without being interrupted by one of these idiots sputtering out sentence fragments just to ask the same question they were in the middle of answering already. I hate CNBC, finally got access to Bloomberg TV.

2009 Nov 02 11:19 AM

[ukdaytrader]

I actually run a side portfolio doing the opposite of Cramer and guess what, it has done pretty well and its thanks to Cramer that the portfolio has beaten the market. So I actually like the guy and you can learn a lot from him.

Ps Trader85 if you listen to Bloomberg all day, you'll be sure to lose your money, perhaps not as fast as CNBC.

2009 Nov 02 11:28 AM

[Trader85]

ukdaytrader, I don't listen to either. I'm just saying that Bloomberg is much more tolerable than the bloviating on cnbc. I make my own trading models and I dont lose money as fast as either channel. On the other hand, positions mentioned on Kramer's site are immediately disqualified from initial purchase, and stops are contracted if he likes it. You should start a website for your portfolio, very curious to see that in the long term. I bet you could absolutely blow away his charitable trust.


On Nov 02 11:28 AM ukdaytrader wrote:

> I actually run a side portfolio doing the opposite of Cramer and
> guess what, it has done pretty well and its thanks to Cramer that
> the portfolio has beaten the market. So I actually like the guy and
> you can learn a lot from him.
>
> Ps Trader85 if you listen to Bloomberg all day, you'll be sure to
> lose your money, perhaps not as fast as CNBC.

2009 Nov 02 12:13 PM

[Anti-Fool]

Wow...what a bunch of "haters." Smells like jealousy with a little envy mixed in. If you hate the guy so much...don't watch him!

2009 Nov 02 12:33 PM

[ralph matinez]

CRAMER ANYONE WHO FOLLOWS HIM MUST KNOW BY KNOW HIS RECOMMENDATIONS ARE ALL ABOUT HIS RATINGSALL HE CARES ABOUT ARE HIS RATINGS AND WILL CHANGE HIS VIEWS ON A DIME

2009 Nov 02 01:01 PM

[Editrice]

So, like Cramer, you were a little sloppy with your homework. The video clip is "In Cramer We Trust." Why not post his "buy" call on CIT a month ago?


On Nov 02 09:49 AM wall street cheat sheet wrote:

> Oops. You're correct. I meant to add that you need multiple investments
> to double. I wrote that on the fly late last night after a long day
> watching football and having a few brews with the family ...

2009 Nov 02 01:09 PM

[radarman123]

Cramer is a snake oil salesman. Ever get cured from snake oil??
It is like watching Obermann and O'Reilly -- you know they are both full of manure but you watch them non the less.

2009 Nov 02 01:34 PM

[campo]

Cramer is an entertainer. His news is for amusement, not perusement. Please don't take anything you see on TV seriously, folks!

2009 Nov 02 02:42 PM

[George /Mississauga/Ontario]

Cramer gave the nod for both CIT and CITI.

CIT has fallen.

Is CITI Next????????????

Does anyone out there know?????? Not you Cramer.

2009 Nov 02 04:04 PM