Meet Mr. Market: Jim Cramer 22 comments
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Yup, that mysterious stock market metaphor, Mr. Market, dreamed up by Ben Graham many many years ago is in fact a living, breathing (hyperventilating?) human being. This may come as a shock to other value junkies out there who know Mr. Market simply as the incarnation of the entire stock market's fear and greed. But I am here to tell you, Mr. Market lives. And he's been right here in front of us for years, in plain sight. Any guesses as to who he is?
Ben Graham, the father of value investing, wrote about Mr. Market more than 60 years ago in his seminal value investing tome "The Intelligent Investor" (Buffett's favorite investing book):
"Sometimes his idea of value appears plausible and justified by business developments and prospects as you know them. Often, on the other hand, Mr. Market lets his enthusiasm or his fears run away with him. and the value he proposes seems to you a little short of silly."
Many times Mr. Market has been described as manic depressive, or even schizophrenic. Have you figured out Mr. Market's identity yet?
Booyah! It's Jim Cramer of course! The walking, talking, screaming, ranting incarnation of fear and greed, high priest of the "Church of What's Working Now"!
The problem is, people listen to him. They watch him and follow his "investing" "advice" (both in quotes, each a euphemism) every day.
If we in fact agree that JC is actually Mr. M, perhaps his viewers should heed Buffet's advice:
"Once you think the market is telling you whether you're right or wrong, once you're looking to the market for guidance, you're in trouble"
Charles Ellis has this to say:
"If you can't control your emotions, being in the stock market is like walking into a heated area wearing a backpack full of explosives."
Nobody would accuse JC/Mr. M of controlling his emotions. One more from Ellis:
"If you go to the stock market because you want excitement, then sooner or later you will lose. Everyone who thinks the stock market is a game loses - everyone, to the last man, woman and child..."
JC/Mr. M is all about excitement! BUY BUY BUY! SELL SELL SELL! Unfortunately, no one, not even he, can predict short-term market moves with consistency. Don't believe me? Well check this out: he can't even predict his OWN short-term moves! The following video shows JC/Mr. M completely contradicting himself, flip-flopping 180 degrees, in one week's time:
Cramer Flip-Flop
The lessons are simple. Again, no one knows what the market will do in the short term. If someone does, they are not on TV telling you about it, they are sitting on an island somewhere counting their billions. I certainly have no idea - as a value investor I buy when things looks cheap, but I have no idea how long it will take for the value to be realized. I simply believe that it will, at some point, in a reasonable amount of time (i.e., it could take years).
Secondly, Cramer is not an investor and has no special knowledge of what the market will do. He is an entertainer, a speculator, a gambler, an emotional ball of contradictions, some would even say a snake-oil salesman. If you had listened to him on Friday the 13th, a week later he tells you to do the complete opposite, without even acknowledging his previous call. I sure hope that some of his viewers caught this and saw the light.
We are in a VERY tough market environment right now, with emotions running wild, and nothing but black (sticky?) clouds on the horizon. Many of the best value managers out there are getting their heads handed to them. Yet it is just these kinds of environments that produce ultimately rewarding investment results.
There are many many companies selling at 10 year (or longer) low valuations. The painful thing is that just when you think something can't get much cheaper, it does. Maybe a lot cheaper. For how long, no one knows. But if your time horizon is long (as it should be for any investor), and you hold quality companies at attractive valuations, you will ultimately benefit when the cycle turns. Stay the course, and don't pay attention to every tick or every headline. Remember that you own pieces of good companies that are diligently working to grow your shareholder value. Most of all, pay no heed to Mr. M's emotional rants, unless you plan on using them to your advantage.
(Thanks to "andybird" for his comment on YouTube that Cramer is "Mr. Market in flesh & bones", which gave me the idea for this post)
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This article has 22 comments:
"don't worry. . .its unsinkable" April 15, 1912
" I believe my plan will balance the Federal Budget within 4 years". . .Jimmy Carter
"I am not a crook"
If you like Cramer, you probably also like Dick Vitale or John Madden. You probably also can spend hours on arguing who is the best short stop in the MLB or Defensive end in the NFL around the water cooler. Mucho Wasteo
The video is great. . . .Somebody needs to piece together the speeches of the presidental candidates and do the same but thats too harsh.
Mr. Market brags he has 2000 stocks in his head and I can only handle 5 to 7 things in my head at one time. OK he is bragging a bit but overall the advice is sound. When I follow his advice I generally do better when I do not I catch falling knives.
At this time we all are doing. It's makes a subject that many considering boring interesting. It's a game and we gamble but we get to pull the lever many times for the same nickel, quarter, dollar, 100 bill. Loose or win it's a hell of a lot more fun than a CD just do not bet the farm. That's why it's called Mad Money.
First, I DO NOT follow his recommendations. I find him to be an entertainer, along the lines of Monty Hall and "Let's Make A Deal". Does he have an audience that faithfully follows his recommendations? Unfortunately, yes. However, for each winner in a trade, there must be a loser. I think a lot of them are watching his show.
But I digress. Back to the topic of my reply. Seeking Alpha, there's too much bashing going on here, whether it be Cramer or anyone else. Offer up ideas and opinions that are positive, constructive and meaningful, and stay away from the personality bashing!
It's a shame there isn't a "Report abuse" link for some of the articles that have been written here recently.
- Jealous of Cramer for his success
- Doesn't understand what Cramer would say about his own mistakes and what he tries to do with his show
- Has no clue how an investor/trader would use Cramer's show
- Secretly works for The Motley Fool
- Secretly works for the Chinese (Cramer insists on calling them Communists and is not recommending any China stocks at the moment)
- Secretly works for News Corp. (Parent to FoxNews)
- Is so bitter that he will actually spend time trying to discredit someone else without even providing his own credentials
- Has no interesting ideas of his own so he is relegated to trying to discredit others
- Thinks he will gain publicity for himself by making unsubstantiated claims against a popular money manager
So Todd, which one is it?
"Todd currently presides over a long-only asset management firm, which he founded in 2006. Using a value-driven approach, Todd oversees over $32 million in separately managed accounts" Wow $32 million! You are a great success! I wonder what your performance has been like to garner a whole $32 million?
Wait, wait, wait, I get it now... You're bitter cause Cramer is out there for the little guy and makes self-proclaimed money managers like you useless! You probably watch his shows to get ideas for own fund!
Once our goverment starts making Wall Streeters more accountable for their actions, maybe this type of hype will stop. These guys who make wrong decisions lose their jobs. People like my Dad, lose their life savings.
Yes, he’s emotional, an entertainer, etc. etc. etc. But to call him a snake-oil salesman (even to dignify such a charge when levied by unspecified others) is inappropriate. Besides the do-your-homework instructions mentioned by others, do snake-oil salesmen offer this: www.thestreet.com/madm...
It’s a section of TheStreet.com web site that tracks all his Mad Money picks, the great, the good, the bad, the ugly and the downright wretched. He shows where he won, and where he lost. Snake-oil salesmen don’t do that. They discuss winners only.
Frankly, I believe Cramer’s disclosures put him way ahead, in terms of integrity, of most TV talking heads who say what they want but are never asked to account for the effectiveness of what they say. Heck, I best many (most?) would decline to go on the air if they knew their utterances would be publicly tracked.
Do not assume I invest like Cramer. I don’t. Actually, I’m in the value camp myself. But that’s no reason to disrespect others who approach the market differently. And as to his showmanship . . . I tip my hat. Good for him.
I wonder if the true core f the article is this: “The painful thing is that just when you think something can't get much cheaper, it does.” Yes, it hurts. But it’s not Cramer’s fault. Cramer didn’t push oil up to the levels we see today. Cramer didn’t issue sub-prime loans. And just when we thought we were getting our arms around the latter, we see other kinds of bad debt (e.g. credit card). Cramer didn’t do that. There are deep fundamental problems that justify the lower lows; falling stocks don’t need Cramer’s jawboning to do what they do.
My suggestion is to stop whining about Cramer or the fictional Mr. Market and do the best you can in assessing fundamentals (or technicals if that’s your approach). Casting blame accomplishes nothing.
My hat is off to him.
seriously, thanks for the insight. and i do agree, cramer is JC. His only motive is for people to gamble, but they are saving to do this.