Why we no longer review
Jim Cramer’s ‘Mad Money’
For much of the summer of 2008, CNBCfix.com watched and analyzed Jim Cramer's "Mad Money" like -- we believe, humbly -- no one else on the Web.
We're freely honest here. We stopped covering "Mad Money" largely because we didn't have enough time.
But there's another important reason: The more we analyzed the show, the more we viewed it with skepticism. To the point we reached extreme skepticism.
We have no problem with the concept of a garrulous pro investor talking about stocks. That is an appealing show concept, actually. But that is not how "Mad Money" is billed. It is billed as a show that will "make you money." That is preposterous.
Whether he's offering tips (he's not) or general investment advice (this is his claim), there is no way such widely disseminated information could help any one individual outperform other investors. To do so requires the belief that you followed a majority of recommendations that were winners, and that other people ignored the ones you followed.
Ask a pro stock trader (we're not pros here), who all limit their serious investments to areas or companies of knowledge (such as Pete Najarian on options and Jeff Macke on best of breed/retail and Tim Seymour on emerging markets in "Fast Money"), if one person can be adequately informed on such a vast amount of sectors as Jim Cramer purports to be, and they are going to tell you basically no. Jim Cramer is no doubt just filtering out to his viewers all the various stock arguments his staff uncovers during the day. Most of his picks — yes, we know he draws a big line between the ones he spends 10 minutes on and the ones he rates on the Lightning Round — must then be regarded as "low-confidence" level.
But is the show useful, entertaining, informative? Yes, Jim Cramer is funny. Yes, he does make some interesting points about business or the market that aren't otherwise heard all day long on CNBC. Some of his comments are hilarious.
Those attributes are negated by his excuses. He tends to blame CEOs when his picks go bad; the "I was bamboozled" argument is heard often. After losing a televised $50,000 stock-picking bet to Eric Bolling, Cramer, according to the N.Y. Post, "through a spokesman blamed his loss on Federal Reserve Chairman Ben Bernanke's failure to cut interest rates more aggressively."
While claiming he reports his losers too (and he does), he tends to talk a LOT more effusively about the winners, e.g., the stocks he started recommending two years ago but haven't done anything in weeks or months.
A big part of his shtick is to employ a common tactic of politicians and controversial leaders, which is to tell the "common person" — i.e., his audience — that they are being screwed by the bigwigs somewhere, that the Wall Street establishment including the Federal Reserve has it in for them, doesn't care about them, won't let them compete on an even playing field, even regularly breaks the law in spreading rumors, shorting stocks, etc. He attempts to give these assertions credence by claiming he was once privy to these scurrilous types of things when he was part of the establishment and isn't proud of it.
A little bit of that is funny. After a while, it gets ridiculous.
Another big part of his shtick, which many of his callers don't seem to realize, is to sell you his book(s). Yes, he is a gifted writer. What we've always found interesting is the presumption that someone can somehow learn how to pick better stocks from reading a book, rather than just picking stocks and learning the hard way. It's equivalent to a big-league ballplayer telling someone who's never picked up a bat in his life to read his book to learn how to hit. We wonder why, if Cramer's first book is so great, would anyone need to buy another one? This sounds like the self-help spiral that is often seen on CNBC overnight, not during regular programming hours.
Jim will probably hate this commentary, should he ever read it, and lump it in with all the "blogs" he blasts on his show. We think Jim is smart, funny and entertaining. We're not offended that people like the show. We're just not interested in reviewing it anymore. We think it's partly bogus, but there's a lot of that on TV. There is more serious investing programming to watch — namely "Fast Money," which is hardly a perfect show either but has a diverse group of panelists who specialize in limited sectors of the market and rightfully express their opinions with due caution.
Good luck, Jim, and we'll try to use the "Mad Money review" space for something equally, if not more, productive.