Jim Cramer

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This article is about the television personality and host of Mad Money. For the champion Scrabble player, see Jim Kramer.
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James J. "Jim" Cramer (b. February 10, 1954 (age 53), Wyndmoor, Pennsylvania) is a American television personality, former hedge fund manager, and best-selling author.

Cramer is host of CNBC's Mad Money and director of TheStreet.com. Until recently, he also hosted the Westwood One/CBS Radio radio show Real Money with Jim Cramer.

Contents

[edit] Biography

Jim Cramer grew up in the town of Wyndmoor, Pennsylvania, outside Philadelphia. One of his first jobs was selling ice cream at Veterans Stadium during Philadelphia Phillies games. Cramer went to Springfield Township High School in Montgomery County.

Cramer graduated magna cum laude from Harvard College in 1977 where he was also editor of the Harvard Crimson. After college, he worked as a journalist at the Tallahassee Democrat and later the Los Angeles Herald Examiner. He went back to school to get a Juris Doctor degree from Harvard Law School and, after graduating in 1984, went to work in Goldman Sachs' Sales & Trading department, the beginning of a career on Wall Street.

In 1987, Cramer founded his own hedge fund company, Cramer & Co., which later became Cramer, Berkowitz, & Co, working out of the offices of hedge fund pioneer Michael Steinhardt's Steinhardt, Fine,Berkowitz & Co. A year later, Jim married Karen Backfisch-Olufsen, a trader with Steinhardt's firm. Jim later retired from the Cramer, Berkowitz & Co. in 2001 (now being run by former partner Jeff Berkowitz).

In 1996 Cramer co-founded TheStreet.com with The New Republic editor Martin Peretz, one of his hedge fund's original clients. He's currently the Markets Commentator and Advisor to the TheStreet.com, and its largest shareholder. He is also the founder and sole proprietor of TheRoad.com, his latest venture.

After being a frequent guest commentator on CNBC in the late 1990s, Cramer went on to co-host CNBC shows America Now and Kudlow & Cramer with Lawrence Kudlow. Jim now has his own television show on CNBC, Mad Money with Jim Cramer, which features his rapid-fire delivery opinions on stocks suggested by callers. Mad Money is also well known for over-the-top antics such as Jim throwing his chair across the studio before the Lightning Round, showing his latest book whenever a caller mentions it, use of humorous sound effects, and for the catch-phrase "Booyah". Mad Money was an instant ratings success and is one of CNBC's most popular shows.

Cramer also hosted a radio show, "Jim Cramer's Real Money," until December 2006. The show was similar but slightly more laid-back in style to his Mad Money TV show.

According to the January 27, 2006 episode of High Net Worth on CNBC, Cramer has accumulated a net worth of over $100 million. His wealth is not verifyable from other sources.

[edit] Criticism

Slate columnist Henry Blodget criticized Cramer in a 2007 article entitled "Pay No Attention to That Crazy Man on TV".[1] Blodget criticized Cramer for overstating his abilities as a market forecaster, noting that in 2006 Cramer's suggested portfolio lost money "despite nearly every major equity market on earth being up between about 15 percent and 30 percent."

Despite his claims of lofty returns when he managed a hedge fund, no audited statement of his investment returns has ever been released to the public. A review by CXO Advisory in an article entitled "Jim Cramer Deconstructed" of his public stock picks shows his picks have done worse than the market averages.[2]

In a January 2006 episode of NPR's "Morning Edition" radio show, Joseph Nocera opined that the "people who are watching [Mad Money] and following [Cramer's] advice are fools."[1]

[edit] Controversy

[edit] Fox News Channel Lawsuit

In 2000, Cramer settled a lawsuit with Fox News Channel in which Fox had claimed Cramer reneged on a deal to produce a show for them. Their conflict began when Fox complained that Cramer promoted TheStreet.com's stock on the air.[3]

[edit] Maier Book

In 2002, Nicholas Maier, a former trader at Cramer's hedge fund, released the book, Trading With The Enemy, about his time at Cramer, Berkowitz & Co. In the book, Maier alleged that Cramer and the hedge fund engaged in illegal trading practices. Maier also stated that Cramer was the subject of an SEC investigation. Cramer denied the allegations and threatened to sue the publisher for libel. The publisher of the book quickly destroyed 4000 copies of the original release, and re-released it after editing out 4 pages that were possibly libelous.[4]

[edit] SEC Subpoena

In February 2006, an SEC investigation into allegations of collusion between short-sellers and a stock research firm led to the serving of subpoenas to TheStreet.com and Cramer. Cramer disclosed the subpoena on his Mad Money television show, holding it up to the camera with the word "Bull" handwritten on it.[5] Both Cramer and TheStreet.com refused to comply with the SEC's demands for communications between journalists and their sources, and First Amendment advocates publicly criticized the SEC move. Soon after, the SEC later stated it would not enforce the subpoena, and the investigation of the stock research firm was dropped a year later.[6]

[edit] Market Manipulation: TheStreet.com Interview

In March 2007, a December 2006 interview from TheStreet.com's "Wall Street Confidential" webcast stirred controversy after its posting on YouTube.com was covered by several news organizations. In the video, Cramer described activities used by hedge fund managers to manipulate stock prices; some illegal and some debatably legal.[7] He described how he could push stocks higher or lower with as little as $5 million in capital when he was running his hedge fund. Cramer said, "A lot of times when I was short, I would create a level of activity beforehand that would drive the futures." He also encouraged hedge funds to engage in this type of activity because it is "a very quick way to make money." Cramer claimed that everything he did was legal but added that illegal activity is common in the hedge fund industry. He further stated that some hedge fund managers spread false rumors about companies to the media and trading desks to drive a stock down: " ...it's important to create a new truth, to develop a fiction."[8] Cramer said one strategy to keep a stock price down is to spread negative rumors to reporters he described as "the Pisanis of the world" in reference to CNBC's Bob Pisani. "You have to use these guys," said Cramer. He also discussed getting "the bozo reporter from The Wall Street Journal" to publish a negative article.[9] Cramer said this practice, although illegal, is easy to do "because the SEC doesn't understand it."[10]

The interview may be studied by the U.S. government and stock market regulators, legal sources said.[11]

[edit] Trivia

  • Cramer believes Regulation FD is one of the best rules ever passed for individual investors. He was opposed to the regulation at the time it was proposed. [12]
  • Cramer appeared as himself in the two episodes of third season of the TV series Arrested Development. In both shows, he upgrades the fictional Bluth Company stock.
  • Lives in Summit, NJ.
  • Used to live in his car as a struggling reporter before attending Harvard Law.[citation needed]
  • Cramer has stated on numerous occasions that his television performances are inspired by announcer Marc Lowrance.

[edit] Bibliography

[edit] Books about Cramer

  • Maier, Nicholas (2002). Trading with the Enemy: Seduction and Betrayal on Jim Cramer's Wall Street. Collins. ISBN 978-0060086510. 

[edit] References

  1. ^ Blodget, Henry (2007-01-29). Pay No Attention to That Crazy Man on TV. Slate. The Washington Post Company. Retrieved on February 18, 2007.
  2. ^ LeCompte, Steve (2007-03-17). Jim Cramer Deconstructed. Retrieved on March 17, 2007.
  3. ^ Associated Press/USA Today (December 4, 2000). Jim Cramer Quits Hedge Fund.
  4. ^ Joyce, Erin. "TheStreet.com's Cramer vs. Maier, Round II", internetnews.com, Jupitermedia Corporation, 2002-05-13. Retrieved on February 18, 2007.
  5. ^ Matthew Goldstein, TheStreet.com (February 27, 2006). TheStreet.com, Cramer Get Subpoenas in Gradient Probe.
  6. ^ Marcy Gordon, Associated Press (February 14, 2007). SEC Ends Probe of Gradient.
  7. ^ Henry Bloget, Slate (March 22, 2007). Cramer vs. Cramer: Will his crazy confession destroy his career?.
  8. ^ Thomas Kostigen, MarketWatch.com (March 23, 2007). Jim Cramer's big mouth: His revelations only confirm what dupes average investors are.
  9. ^ Roddy Boyd, The New York Post (March 21, 2007). Cramer's Big Mouth: Clip Could Run Afoul of CNBC.
  10. ^ Matt Krantz,USA Today (March 24,2007). CNBC's Cramer boasts of manipulating markets.
  11. ^ Hamilton, Dane (2007-03-20). Jim Cramer draws fire over manipulation comments. Retrieved on March 20, 2007.
  12. ^ By Bill Mann, Motley Fool (July 6, 2001). Media Disparages the Individual Investor.

[edit] External links

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