How does CNBC's Jim Cramer keep his job?

I'll admit, my opinion of CNBC star Jim Cramer is colored by a 2006 column he penned for New York magazine, advising the New York Times to drop its print edition entirely -- despite the fact that the print version earns much of the money that makes all the online content possible.

It was typical Jim Cramer: a hyperbolic take on conventional wisdom framed with an incredulous why-don't-they-see-this bombast. Based on no real analysis of profit, losses or any other measures of business success, as an added bonus.

Which brings us to this morning, when Cramer offered a non-apology apology on NBC's Today show for delivering a hysterical, get-out-of-the-market message just before the Dow Jones dropped another breathtaking 300 points to dip below 10,000 for the first time since 2004.

He had told Today viewers on Monday to take any money they wanted to access over the next five years out of the market, a message one angry e-mailer compared to "yelling fire in a crowded building." This morning, a much more subdued Cramer whined to anchor Meredith Vieira "should I just tell people, 'You know what, things are fine,' because I don't want to take any heat?" 

This acknowledgment came less than a week after Cramer apologized for recommending viewers buy Wachovia stock -- he was great pals with the company's CEO, Robert Steel -- right before the stock price tumbled from about $10 a share to just under $2. Cramer offered a similar "explanation" for his mistake judging investment bank Bear Sterns, telling viewers in March "Bear Stearns is fine" just before the company collapsed over a weekend and sold itself for $2 per share.

That's more classic Cramer: Spinning past positions to minimize mistakes. (A friend and fellow Cramer hater sends along this link to a CJR story about how CNBC banished reporters from Barron's from its air after they proved Cramer's stock picks did worse than the general market)

That the Today show has turned Cramer into some percolating sage of financial wisdom during the country's increasingly frightening economic meltdown is grounds for journalistic malpractice charges, anyway. Cramer's unbridled enthusiasm and shoot-from-the-hip style is tailor-made for hyping empty trends and mistaking momentary blips for larger movements. It's as if one of those hyperventilating adrenaline junkies on the stock exchange floor were given his own cable show and space on America's most-watched morning program.

Cramer's squirming today just exemplifies a problem many TV business analysts face every time a big economic bubble bursts. Hobbled by past cheerleading and missed calls, it's tough to take their reporting seriously as conditions deteriorate; if they couldn't catch these problems before they became big news -- and built big audiences riding the same wave that made millions for their CEO pals -- why should anyone trust their analysis now?

All this is made more ironic by the fact that Cramer gave essentially sound advice Monday; people should be taking short-term money out of a plunging stock market, despite the fact that it makes the plunging get worse. But when you've been a cheerleader for so long, sometimes it's tough to step into a new role without surprising a few people.

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Comments

[jk]

Columbus Day: Sucker's Rally? Buying Opportunity?

Intelligent discussion.

http://finance.yahoo.com/tech-ticker/article/95114/Debate-Rages-Sucker%E2%80%99s-Rally-or-Time-to-Buy?tickers=MS,^DJI,^GSPC,^IXIC,SPY,DIA,XLF

[jk]

Happy talk from Vanguard's John Bogle, only 3 weeks ago:

http://marketplace.publicradio.org/display/web/2008/09/19/bogle_perspective/

Sometimes age is as bad as they say.

[jk]

Today the market touched 8000 (7000 is widely anticipated...6000 might be a buy, but don't expect dividends to be secure).

Today you have 10-20% less than you had when Cramer screamed SELL!

If you cash out your retirement plan in 2010 you'll have a net loss on everything you've put into it for the past 5 years. You won't have a deduction because it's an ERISA account.

Here's why you're not like Warren Buffett:

http://finance.yahoo.com/tech-ticker/article/93950/Seeking-Shelter-from-the-Storm-Look-to-Gold-and-Cash-Not-Buffett?tickers=AAPL,RIMM,GS,GLD,GE,^DJI,^GSPC

[Dylan]

Ah, Cramer (perhas Kramer), just like Billy Mumphrey suffers from unbridled enthusiasm. Way too many Seinfeld references here to even try to wrap my head around.

[jk]

...and, if someone insists that wisdom comes only from dull personalities with perfect track records, here's the ultimate for investors who may need liquidity next year:

http://finance.yahoo.com/tech-ticker/article/91357/Roubini-Rate-Cuts-Reduce-Crash-Risk-But-Dow-7000-Likely-%27Sometime-Next-Year%27?tickers=^DJI,^GSPC,^IXIC,SPX,DIA

Deggans doesn't understand that Cramer is an entertainer and commentator, more than advisor. Cramer may not fully realize that either, but unlike Deggans, he doesn't pretend to be the sober voice of reason in a realm in which he's ignorant. Cramer has strong views and makes plenty of mistakes. That's because he's a stock picker. Being a stock picker don't make his advice regarding 5 year horizon invalid...in fact, it adds weight to that advice, as we see already.

Deggan's rant is like McCain's blaming don't-regulate ideology on Cox, rebuffed by GOP when he pleaded for authority to regulate the most toxic financial waste (credit default swaps and CDOs).

I'll post the following again: it provides perspective on Cramer vs Warren Buffett (both of whom evidently support Obama).

http://finance.yahoo.com/tech-ticker/article/89879/Buffett-vs.-Cramer-Time-to-Buy-or-Sell?tickers=GE,GS,BRK-B,AAPL,UFS,MCF,CEG

[Eric Deggans]

Facetime -- thanks so much for your comment; it helps a lot to hear from peopel who have firsthand knowledge.

But you should also read my last graph again. I acknowledged that he gave good advice, but his past work has made fairly judging that advice impossible...

[Money Bags]

DEAR CNBC, You are blowing it big time. This economic crisis should have been your big break. But as it turns out, it is your swan song. Sure your ratings are up right now, but the people tuning in are finding junk news and circus clowns running around spewing nonsense.
Dear Fox Business Channel, congratulations. CNBC blew it. Your market share is about to skyrocket!
Can I buy stock in Fox Business?
Sincerely,
A former CNBC viewer,
Tara

[Facetime]

I despise Jim Cramer. I worked with him and hated him to the extent that I would not acknowldge him if I saw him in the hall.

That said, he finally says something responsible and people are calling for his head?

I think what Jim said was dead on. If you have a 5 year time horizon and need your money back in that period, it should NOT be in the stock market under these conditions. It is one thing to yell fire in a theater when there is no fire, but as Jim told Meredith Viera, there IS a fire and he was simply saying so.

The average, untrained investor vacilates between fear and greed. They cannot pick a bottom and usually sell low and buy high. They need to be told the truth.

For once Jim has acted responsibly. Give the man his due.

[RMB]

Cramer lost credibility with me long before he was a TV star. He had started a syndicated financial column and I picked it up for the small business weekly that I was editing. This was represented by a major syndication company, and the column was supposed to come weekly.

Some weeks it would show up, some weeks it wouldn't, without explanation.

Finally, I got so steamed I called Cramer directly and he acted shocked that I would even ask: "Oh," he said, "I'm probably going to stop doing that column."

Thanks for the warning!

[Eric Deggans]

Did you read the entire post? Cramer has tied himself in knots with bad stock calls and over-hyped advice -- to the point that even when he gives decent advice, it comes across badly.

Hence, the headline.

[Tim]

last part makes sense:
All this is made more ironic by the fact that Cramer gave essentially sound advice Monday; people should be taking short-term money out of a plunging stock market
But then, how do you get to that headline, which is also in Romenesko now? Did you editor read to the end?

[rp]

Well, he was right. With the market down 10% this week I sure wished I had followed his advice.

[still the schills]

What's worse is that the NBC Nightly News has taken to putting him on periodically to "explain" what's going on in the market.

[Michael Critz]

Jim Cramer has a lot in common with the homeless schizophrenic that screams for me to give him money when I leave the subway.

[jk]

http://finance.yahoo.com/tech-ticker/article/89879/Buffett-vs.-Cramer-Time-to-Buy-or-Sell?tickers=GE,GS,BRK-B,AAPL,UFS,MCF,CEG

That's some perspective in the context of Buffett...they're not necessarily incompatible.

Buffett isn't a model for other investors as he has no responsibilities, and Cramer is simply a stimulant, someone with frequent interesting perspectives. Neither has any obligation to the outcomes of your investments.

And: The market is a side game for people who don't have the guts to step up to the plate with their own business. Market investments don't make you a capitalist and don't make Buffett or Cramer capitalists. Russia and Vietnam and China all have big stock markets.

[No Cramer fan.]

Cramer runs something called an Action Alerts Plus portfolio on Thestreet.com. When he talks about his 'charitable trust' on CNBC, that's what he's talking about. It's the ONLY place Cramer has traded over the past 7 years.

Subscribers pay $60 a month, or $400 / year, to get Jim's picks as they happen.

Up through yesterday, his portfolio during that time is -2.9%. Sticking it in a tin can in the backyard would have gotten you 0%.

And he's called a "genius"?????

[Diane]

It would be such a disappointment for Cramer to leave the air. I mean, where would I go to have a red faced, bug-eyed bald guy screaming at me about what to do with my money? Change his rhetoric to religion and he could always work the circuit as Mad Max's protege!