Cramer’s flamboyance and cockiness make him an easy target. Some maintain that it is simply impossible for any human to recommend as many stocks as he does (Barron’s, in 2007, put the number at 7,000 a year) and know what he is talking about. Barron’s conceded that Cramer’s advice was “generally smart, his knowledge of individual stocks amazingly detailed” but calculated that his on-air picks trailed the market. This is debatable, since Cramer doesn’t give equal weight to all his recommendations and doesn’t normally tell people when to sell.
But the more damning criticism of Cramer comes from Wall Street professionals who know how much expertise it takes to make money trading stocks. Amateurs, in their view, don’t stand a chance, and Cramer is merely egging them on. “Cramer induces his viewers to do things that are bad for them,” says David Swensen, who manages Yale University’s endowment. “He’s smart enough to know what he’s doing. ‘Mad Money’ delivers a very dangerous message — that individual investors can beat the market with momentum-driven, high-octane trading strategies. There are individuals who do beat the market, but their number is vanishingly small. Cramer is a master manipulator. He has absolutely no accountability. This is serious business; people’s retirements are at stake.”
YouTube populist types like Don Harrold, who gives advice on his Web site DayTradeShow.com, have their own beefs. Harrold contends that Cramer is the right man in the wrong job. “He was a brilliant hedge-fund trader, but hedge-fund trader doesn’t necessarily make a great coach for a general audience,” Harrold told me. “Check out early March 2009. Cramer went negative just at the bottom of the market. That’s the exact opposite of good advice.”
If Cramer’s fans at the Nets game had ever considered these harsh assessments, they didn’t seem to be troubled by them. After the game, as we slowly wended our way to the doors, Cramer signing autographs along the way, I bumped into a guy in his 20s who was walking hand in hand with his Valentine’s date. “You know Cramer?” he asked me.
I nodded. “Do you watch his show?” I asked.
“Every day.”
“Make any money?”
The guy looked at his date and smiled. “Sometimes yes, sometimes no,” he said. “Hey, I’m a player, that’s how it goes.”
This guy is such a shill. Remember Alan Abelson? He wrote for Barron’s. Until he was busted and ultimately dismissed. It’s time to dismiss Cramer. Entertainment value just isn’t enough anymore, TV execs. Add value; not stupidity.