You knew that someone was going to come out and say it. But did you know it was going to be Cramer?
Shorts were able to take AIG down from the $20s to $4 in a week's time.
To be sure, there were plenty of problems with AIG -- including, presumably, the insurance they may have offered on the solvency of Lehman and on their debt that they would be expected to pay off.
What matters, though, is how easily hedge funds were able to take this company down through endless selling.
Ah yes, the hedge funds, the naked shorts -- why is it that every single time a company's stock collapses, shadowy short-sellers get blamed?
It's worth pointing out, too, the sheer sophistication of Cramer's fundamental analysis:
Let's take AIG. Here's a company that has lots of liabilities but also lots of assets.
This is a man who writes this kind of thing with a straight face:
I'm committed to helping investors make money in the market. That's why I'm offering $50 off on a subscription to my exclusive investing service, Action Alerts PLUS.
Of course, there's always the small print:
If you decide to subscribe you will pay only $349.95 -- a savings of $50 off the annual subscription price of $399.95. When you renew your annual subscription, it will renew at the then-current annual subscriber price.
A mere $350 for your first year? I can confidently state that buying $350 of lottery tickets would be a vastly better investment. You don't know where the market is going, and neither does Jim Cramer. So stop trying to foresee the future, and start doing something you're good at instead. After all, I don't recall Cramer ever recommending an AIG short on the grounds that it was a sitting duck for hedge funds. I guess that only became obvious in hindsight.
This article has 35 comments:
Try explaining to your kids that they won't have the chance to go to college because you fell in love with a TV investment personality!
His Action Alerts Plus has been a money-maker for me. I guess it all depends on whether you listen to Cramer, do your homework, and buy stocks that suit your needs. Too much for you to comprehend? Then stop writing about things you know nothing about. If you don't like Cramerica, move.
For some reason, people like to have other people think for them. Perhaps I should start my own newsletter as well.
Clark Jenkins
FishGoneBad.com
Perhaps that $350 (reduced from $400!) a year newsletter is worth the money, although you'd still need to carefully sort out the truly horrible ideas from the merely silly ones.
Dumb beyond belief and a big mouth.
The only thing we miss is: He is not obese... (That is a true anti American thing, may be he is a secret supporter of al Qaida because that explains his investment advices.)
More troubling is his underhanded agenda. He uses his soapbox to talk up GoldmanSachs and his Wall Street cronies to the detriment of those who take him seriously. He needs to be investigated for ethics violation: he sure acts like he is being paid by the Wall Street insiders.
(1) Cramer said the shorts were responsible for driving down the price of AIG's stock.
(2) Cramer is never right
(3) Therefore, shorts are not responsible for the rapid decline of AIG's stock.
Sorry, but this reasoning would not get you a passing grade in a freshman philosophy class.
If the rapid decline in AIG's price was not caused by hedge funds (along with maybe the LEH, GS, MS, & MER trading desks) getting together and shorting the stock, what is your explanation?
Do you seriously believe that huge numbers of retail investors either studied AIG's financial statements (the fundamental guys) or read its charts ( the technical guys) and simultaneously reached the same decision to short it?
If you believe that, you're too naive to be working on the street.
You on the other hand think in only one direction;
pumping or dumping, Cramer pick me buy,
Cramer's picks = DD, gamble on Cramer's picks
b/c you too much ADHD to use him only as an indicator.
shorting, plain and simple as are the results of the past week.
Besides, do you really think sophisticated investors are gullible enough to fall for the equivalent of penny-stock pump-and-dump schemes? I assure you, their faxes runeth over with such schemes and they ignore them. That's one reason they're millionaires/billionai...
I must say that his weak spot in his investing prowess is technical finance. Whenever there are issues dealing with this on a specific security, he tends to be way too optimistic.
That said, Cramer still is well above 50% on his recommendations, can you say that Felix?
I have no problem with people bashing the so-called gurus, but you should at least bring something to the table
YTD his AAPlus Portfolio is down about 20 percent vs the S&P500 which is down about 16 percent. Considering the restrictions on his trading and the fact that he does not short, use options or leverage in the portfolio, that is respectable, given the market.
I don't believe in the conspiracy theories per say, but I agree with him on the lack of enforcement by SEC on the failure of short-sellers to do a locate first.
Just my 2 cents. No, I have not drank the Kool Aid, but bring something to the table...
I did an paid for it but I started listening on the philosophy and methodolgy. Cramer does pound the fundementals espicially after a company reports a good quarter (remember FCX last summer?)
But FCX is a well run firm and if one was smart and factored in the fear and trends they can pick up a bargan. With the exception of FCX Cramer says wait 5 days before trading to do your homework on his picks. That is good advice and possibly extend that period.
Never go out and buy what he recommends the next day unless you are day trading and hoping for a pop.
Remember, and he always says, it's a CHARITABLE TRUST. He just threw $3 million in a pot. He probably already took a deduction on it when he set it up so it's just a giveaway for him.
The newsletter is somewhat useful for newbies with an online trading account to begin understanding some of the basic trading psychology and strategies - but very basic.
Cramer on his show is at his best when he is calling Wall St. on the carpet. He knows the tricks and probably invented some of them and deserves credit for giving a tongue lashing to the idiots who abuse the market and fail to regulate it and themselves. He says what a lot of investors are thinking and wish they could say to the SEC, the Fed and the hedge funds.
Hey if you think you can do better, go for it! There is plenty of room for more Cramers on tv.
Mario Cuomo is going to check for manipulative short-selling - I believe he will find plenty.
Why don't you give stock recommendations on a daily basis, so we can criticize you on your mistakes. I think people just like to hate on Cramer because of his popularity and eccentricity, but there are a million other clowns out there who are worst.