Bear Stearns and Jim Cramer's Recent Comments

Yesterday Jim Cramer was on Erin Burnett's "Street Signs" (Erin Burnett Fan Club) show to say he was not bullish on Bear Stearns (BSC) last week. He said he was only telling the person with the question to not take their money out of the brokerage.

"Bear" closed yesterday at $4.81 as hopeful investors think they might get more than the $2 per share JP Morgan (JPM) announced they will buy Bear Stearns for. (See J.P. Morgan Chase buys Bear Stearns for $2 a share )

click to enlarge

Last Tuesday, with BSC at $62.97, Jim Cramer took a call from a viewer asking about Bear Stearns' liquidity problems. This was his reply.

• Caller Question: Should I be worried about Bear Stearns in the terms of liquidity and get my money out?
• Jim Cramer: NO! NO! NO! Bear Stearns is fine. DO NOT take your money out.

Watch the video here to decide for yourself.

There has been a ton of message board discussion about Cramer's "bullish call for Bear" last week. To answer the questions, this is what he told Erin Burnett:

Look, let’s understand two things, I said the common stock was worthless on Friday, as soon as this thing was at 36 because we saw a look at the bonds. If you kept your money in Bear you made out. You got the liquidity. Keeping money at Bear – I guess I could have caused a run on the bank and said take your money out of Bear. I guess people could say hold it, he’s saying buy the common stock. I mean, what the heck. I cannot cause a run. It turned out the Federal Reserve guaranteed the money. I’m not going to tell people to pull money out of these places. The Federal Reserve is guaranteeing the money. They are not guaranteeing the equity. I got a lot of things wrong in my life, but I don’t regret the fact when I said don't take your money out of Bear. If you have your money in Bear you still got it today. Remember, there’s Bear Stearns the common and that person was going to pull the money out of Bear. We got a guarantee. JPMorgan is now Bear.

I checked SeekingAlpha for their daily recap. It is called

• Jim Cramer's Mad Money In-Depth: 3/11/08: Bullish on Bear

The TITLE says "Bullish on Bear" and it shows in the URL....

On the “Today” show March 17, Cramer said:

If you’re a diversified investor, you’re not going to get hurt. Those who only had their money in Bear obviously will get wiped out today.

hmmmmm..... Maybe we should ask Bill Clinton what "in Bear" means.

One thing for sure....

Anyone who was in Bear Stearns the stock last Tuesday and held it on what Cramer said is not going to be a happy camper today.

This graph of the rise and fall of Bear Stearns stock is one for my historical files. Let it be a reminder not to put all your eggs in one basket, even if you work at the company and the company pays you in company stock. Take profits and diversify!

• Facebook Jim Cramer discussion forum.
• Erin Burnett Fan Club and Pictures

Comments

[o0otco0o:]

Since when does Cramer comment on anything besides buying or selling the "2000 stocks in his head". He, as far as I know, has never made comments about where (as in with which firms) people should transact their buys and sells. Which is what he's trying to say his statement meant. Backing away from his comment to stay in Bear is nothing but a cowardly play on symantics. Instead of getting so emotional for his buddy Elliot, he should maybe show some emotion and regret for this incredibly bad guidance!

2008 Mar 18 07:49 AM

[gander:]

Cramer also said to BUY Openwave (OPWV) at $24 per share. It dropped IMMEDIATELY. It's now at $2.

2008 Mar 18 08:44 AM

[DKB304:]

I agree! Cramer clearly signaled that BSC was okay - the callers question was about the stock NOT the company. In the context of all questions fielded during Lightning Rounds, "don't take your money out" can only mean one thing: don't sell BSC. I love Jim but his ego is a bit much at times.

2008 Mar 18 08:52 AM

[Norman Lepo...:]

I do not understand why CNBC treats Cramer an analyst who actually knows something. His bad calls are too numerous to count. CNBC should take him off the air. I change the channel whenever he comes on. He is the worst I have ever seen!!

2008 Mar 18 10:04 AM

[User 59050:]

True cop out by Cramer. He was talking about the stock and just doesn't have the guts to admit it. He just can't stand to appear foolish. He squirms out of most of his bad calls with post it notes and compromise of why he made the call, but this call here last Tuesday has no defense except to say "I, like everyone else, had no idea." What the heck is wrong with that?

2008 Mar 18 10:40 AM

[Trunn:]

Jim Cramer is only for entertainment. Seriously, you might get some good ideas but if you are investing based on the recommendations of someone on television you are barking up the wrong tree. Jim Cramer is not a financial consultant and nor should he be for the listeners that tune in. Investors should do their own research instead of listening to as he calls himself, "A raving lunatic." This is the stock market we are talking about. If making money was as easy at tuning into Jim Cramer every night, then every one would be doing it and it would not be an open market.

2008 Mar 18 11:01 AM

[ATLBob:]

Interpret Cramer's comments the way that makes you feel the best. It doesn't really matter if Cramer was talking about the stock or the bank account: anyone who makes investment decisions based upon ANY TV talking head gets what they deserve: a swift dose of reality from the market. Do some homework, do a gut check on your risk/reward profile and make an informed decision on your own and take responsibility and be accountable for the result of your actions. If you aren't prepared to do so, then use a professional broker or financial consultant, who will be paid to make the decision for you.

2008 Mar 18 11:34 AM

[Moosedawg:]

If you make your investment decisions based on one person's opinion on TV, without doing the required homework, the only person that you can blame at the end of the day is yourself. 2 things that Jim will always preach..."do your homework" and "ensure you are diversified". Guess what, had you done either of these things, you probably are still in good shape even with the news on Bear.

I tend to agree that the caller was moreso fearing about her deposits in Bear Sterns when she questioned the liquidity. Now, given the fact that Cramer gives advice on stocks and stock prices on his shows, he should have included the caveat that he was only talking about deposits being safe, not stock price, had that been his ultimate intention.

Again, if you are in the position that your savings stand to be hurt severely over the movement of one stock price, you likely aren't diversified and are probably better off in a mutual or index fund anyways.

Never, ever, ever invest your family's savings in one/two companies. And if you don't have the time/knowledge/experie... to do the homework HIRE SOMEBODY WHO DOES!!

2008 Mar 18 12:45 PM

[Jack T:]

CRAMER IS A LOT OF HYPE ENTERTAINMENT. DESIRE TO HELP LISTENERS MAKE MONEY CAN BACKFIRE, HENCE THE BSC FIASCO OF MISINTREPATION OF A RECOMMENDATION. ATTEMPTING TO EXPLAIN "WHAT I DID SAY" IS AN EXERCISE IN FUTILITY TO THE AVERAGE INVESTOR

2008 Mar 18 02:37 PM

[Urbane Gori...:]

Cramer has the ability to explain the market to lots of new investors, who really have no other source of information. I don't remember any classes in college that prepared me to invest, but I do know that I pretty much was obliged to have an IRA.

If you want to blame someone for Cramer's bad (sic) call on Bear, then how about blaming Greenspan, Bernanke and that loser of a president. These people have more control over the economy than anyone else (for all the good it does). Or maybe the CEO and CFO of Bear, who came out only weeks ago stating **categorically** that Bear was OK...

Seems to me the finger is wagging the wrong direction.... Why not blame Britney Spears...She has as much knowledge of the inner workings of Bear as any other TV personality...

Why not blame the people that really count.

Thx jegan ;-/

2008 Mar 18 03:09 PM

[valueinvest...:]

I would argue that at best this is very shady on Cramer's part. Then again, it is always important to remember that Cramer does not care if his picks work out or not. He just worries about ratings and selling books. Basically, watching Cramer is like watching the circus. You watch to be entertained not enlightened.

2008 Mar 18 04:10 PM

[The Grayheck:]

Unbelievable the media coverage on this one, telling us “NO, NO, NO…do not sell, the company is healthy”. I guess when a guy like Bud Fox is sniffin’ around, the writing is on the wall. I wish I was paying more attention to that…hindsite is 20/20.

www.socoolaz.com/artic...

2008 Mar 18 07:18 PM

[ultrabrowser:]

He went on MadMoney last night saying he got BSC right all along!! What a jerk, take some responsibility for a mistake and move on. No wonder he admits he is the most hated man on Wall Street.

2008 Mar 19 01:23 PM

[DamonVickers:]

very nice writing...

2008 Mar 22 08:59 PM