Cramer, Berkowitz And Company

James Joseph Cramer (born February 10, 1955) is an American television personality and author. He is the host of '' Mad Money'' on CNBC, and an anchor on '' Squawk on the Street''. After graduating from Harvard College and Harvard Law School, he became a hedge fund manager, founder, and senior partner of Cramer Berkowitz. He co-founded TheStreet.com, which he wrote for from 1996 to 2021. Cramer hosted ''Kudlow & Cramer'' from 2002 to 2005. ''Mad Money with Jim Cramer'' first aired on CNBC in 2005. Cramer has written several books, including ''Confessions of a Street Addict'' (2002), ''Jim Cramer's Real Money: Sane Investing in an Insane World'' (2005), ''Jim Cramer's Mad Money: Watch TV, Get Rich'' (2006), and ''Jim Cramer's Get Rich Carefully'' (2013).

Early life

Cramer was born in 1955 in Wyndmoor, Pennsylvania (a suburb of Philadelphia), to Jewish parents, and is Jewish. Cramer's mother, Louise A. Cramer (1928–1985), was an artist. Cramer's father, N. Ken Cramer (1922–2014), owned International Packaging Products, a Philadelphia-based company that sold wrapping paper, boxes, and bags to retailers and restaurants.

Cramer and his family moved to Springfield Township and he attended Springfield Township High School in Montgomery County, Pennsylvania, graduating in 1973. He competed for the high school track team.

Among his first jobs, starting sometime in 1971, Cramer sold Coca-Cola and then ice cream at Veterans Stadium during Philadelphia Phillies games.

Cramer first began studying stocks in the fourth grade and continued the habit through high school.

Education and early career

In 1977, Cramer graduated ''magna cum laude'' from Harvard College with a Bachelor of Arts in government. While at Harvard, Cramer was the president and editor-in-chief of '' The Harvard Crimson''. Additionally, Cramer was a National Merit Scholar.

After college, Cramer was an entry-level reporter, making $15,000 per year. Beginning March 1, 1978, Cramer worked for the '' Tallahassee Democrat'' in Tallahassee, Florida, where he was one of the first people to cover the Ted Bundy murders since he lived only a few blocks away. Then-executive editor Richard Oppel said: " ramerwas like a driving ram. He was great at getting the story." He subsequently worked for the ''Los Angeles Herald-Examiner'' writing obituaries. During this time, his apartment was robbed and he lost everything, forcing him to live out of his car for 9 months. He also worked for Governor of California Jerry Brown. Cramer was one of the first reporters at '' American Lawyer''.

In 1984, Cramer received a Juris Doctor degree from Harvard Law School. Cramer started investing in the stock market while he attended law school. He made enough from trading to cover tuition. Cramer began promoting his holdings by leaving stock picks on his answering machine. While at Harvard, alumnus Michael Kinsley introduced him to '' The New Republic'' owner Martin Peretz, who contacted Cramer to write a book review. After first profiting from the stock picks he heard on Cramer's answering machine, Peretz gave Cramer $500,000 to invest. In two years, Cramer made $150,000 for Peretz. During his years at Harvard Law School, Cramer worked as a minor research assistant for Alan Dershowitz. He assisted Dershowitz's campaign to acquit alleged murderer Claus von Bülow, even though Cramer believed von Bülow was "supremely guilty."

Career

Goldman Sachs

In 1984, Cramer worked in sales and trading at New York investment bank Goldman Sachs.

Cramer was admitted to the New York State Bar in 1985, but did not practice. His license to practice law was suspended on April 2, 2009, for failure to renew his registration.

Hedge fund

In 1987, Cramer left Goldman Sachs and started a hedge fund, Cramer & Co. (later Cramer, Berkowitz & Co.). The fund operated out of the offices of hedge fund manager Michael Steinhardt. Early investors included friend and Harvard classmate Eliot Spitzer, Steve Brill, and Martin Peretz. Cramer raised $450 million in $5 million increments and received a fee of 20% of the profits he generated.

Cramer claims he sold all of his stocks on the Friday before Black Monday (1987). From 1988 to 2000, Cramer claims he had only one year of negative returns – 1998, a year when the S&P 500 Index rose 29%. The underperformance in 1998 led to significant investor withdrawals. In 1999 the fund returned 47%, and in 2000 it returned 28%, beating the S&P 500 by 38 percentage points. Cramer said he produced a 24% average annual return over 14 years and "routinely ookhome $10 million a year and more." However, his results have been disputed.

In 2001, Cramer retired from managing the hedge fund. The fund was then taken over by his former partner, Jeff Berkowitz.

SmartMoney

Cramer was also an "editor at large" for ''SmartMoney'' magazine and was accused of unethical practices when he made a $2 million personal gain after buying stocks just before his recommendation article was published.

TheStreet.com

In 1996, Cramer and Peretz launched TheStreet.com, a financial news and investment website. In August 2019, TheMaven acquired the company for $16.5 million.

CNBC

Cramer was a frequent guest commentator on CNBC in the late 1990s.

From 2002 to 2005, Cramer co-hosted ''Kudlow & Cramer'' (first called ''America Now'') with Larry Kudlow.

'' Mad Money with Jim Cramer'' first aired on CNBC in 2005. The stated goal of the show is to provide people engaging in do-it-yourself investing with "the knowledge and the tools that will empower you to be a better investor". Cramer is required to disclose any positions he holds in a stock that is discussed on the show, and is not allowed to trade any security he has spoken about on CNBC for five days following the broadcast.

Other media appearances

Cramer hosted a one-hour radio show, ''Jim Cramer's Real Money'', until December 2006, which spawned '' Mad Money''.

On November 13, 2005, Dan Rather interviewed Cramer on ''60 Minutes''. Among the topics of discussion was Cramer's past at his hedge fund, including his violent temper.

In 2005, Cramer appeared as himself in two episodes of '' Arrested Development''. He announced that he had upgraded Bluth Company stock to a "Don't Buy" from a "Triple Sell," and then said that the stock was not a "Don't Buy" anymore, but a "Risky."

Cramer has also made appearances on '' Today'', '' NBC Nightly News'', '' Live with Regis and Kelly'', '' Cheap Seats'', '' Late Night with Conan O'Brien'', '' The Tonight Show with Jay Leno'', ''Late Show with David Letterman'', ''Jimmy Kimmel Live!'' in February 2008 and as a guest judge on '' The Apprentice'' in January 2007 and was interviewed by Jon Stewart on '' The Daily Show'' in March 2009 (see Jon Stewart–Jim Cramer conflict).

Cramer also appeared in the 2008 motion picture ''Iron Man'' spoofing Stark Industries on his show ''Mad Money'', and he also appeared in the movie '' Wall Street: Money Never Sleeps''. He also claims to have consulted for the original ''Wall Street'' movie by telling the filmmakers how he would get through to Gordon Gekko.

Controversies

Fox News Channel lawsuit

In 2000, Cramer and TheStreet.com settled a lawsuit with Fox News Channel in which Fox had claimed Cramer had reneged on a deal to produce a show for Fox. The conflict began when Fox complained that Cramer promoted TheStreet.com stock on its network.

Admission of market manipulation

In a December 2006 interview, Cramer described activities used by hedge fund managers to manipulate stock prices—some of debatable legality and others illegal. 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 at my hedge fund ... When I was positioned short—meaning I needed it down—I would create a level of activity beforehand that could 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 stated that everything he did was legal, but that illegal activity is common in the hedge fund industry as well. He also stated that some hedge fund managers spread false rumors to drive a stock down: "What's important when you are in that hedge-fund mode is to not do anything remotely truthful because the truth is so against your view, that it's important to create a new truth, to develop a fiction." Cramer described a variety of tactics that hedge fund managers use to affect a stock's price. Cramer said that one strategy to keep a stock price down is to spread false rumors to reporters he described as "the Pisanis of the world", in reference to CNBC correspondent Bob Pisani, whom Cramer insinuated was able to be manipulated, saying "You have to use these guys." He also discussed giving information to "the bozo reporter from '' The Wall Street Journal''" to get an article published. Cramer said this practice, although illegal, is easy to do "because the SEC doesn't understand it." During the interview, Cramer referred to himself as a "banking-class hero."

Performance of Cramer's investments

As manager of his hedge fund, Cramer said he realized a "rate of return of 24% after all fees for 15 years," until he retired from the hedge fund in 2001. He self-reported a 36% return in 2000, at the peak of the dot-com bubble. However, this performance has not been independently verified.

In January 2000, close to the peak of the dot-com bubble, Cramer recommended investing in technology stocks, and suggested a repeat of the stock performance of 1999. In February 2000, the year in which Cramer said he produced a 36% return, Cramer said that there were only 10 stocks he wanted to own, and he was buying them every day. These stocks were 724 Solutions, Ariba, Digital Island, Exodus Communications, InfoSpace, Inktomi, Mercury Interactive, Sonera, VeriSign, and Veritas Software. He also dismissed the investing strategy of Benjamin Graham and David Dodd, and said that price–earnings ratios did not matter.

An August 20, 2007, article in '' Barron's'' stated that "his picks haven't beaten the market. Over the past two years, viewers holding Cramer's stocks would be up 12% while the Dow rose 22% and the S&P 500 16%."

Cramer was criticized for repeatedly giving erroneous advice during the Financial crisis of 2007–2008. He recommended investing in Bear Stearns, Merrill Lynch, Morgan Stanley, Wachovia, and Lehman Brothers before the stocks fell in value significantly and several went out of business. On August 8, 2008, before the climax of the financial crisis of 2007-2008, Cramer recommended investing in bank stocks.

On October 6, 2008, on '' Today'', when the S&P 500 Index was valued at 1,056, Cramer suggested to investors, "Whatever money you need for the next five years, please take it out of the stock market." Five months later, the market bottomed at 666, a 36.9% decline. Five years after Cramer's sell advice, on October 6, 2013, the S&P 500 Index was valued at 1,678, an increase of 58.7%.

A February 9, 2009, article in ''The Wall Street Journal'' said that betting against Cramer's Buy recommendations using short-term options could yield 25% in a month.

Recommendation regarding Bear Stearns in March 2008

On the March 11, 2008, episode of Cramer's show ''Mad Money'', a viewer submitted the question "Should I be worried about Bear Stearns in terms of liquidity and get my money out of there?" Cramer responded "No! No! No! Bear Stearns is not in trouble. If anything, they're more likely to be ''taken over''. Don't move your money from Bear." On March 14, 2008, the stock lost more than half of its value on news of a Fed bailout and $2/share takeover by JPMorgan Chase. On March 17, 2008, Cramer said his statements were made in regards to the liquidity of accounts held at Bear Stearns as opposed to the stock. Cramer said he was not recommending the common stock, but allaying concerns about the account holder's liquidity held in a Bear Stearns brokerage account. Cramer later wrote about the incident: "I did tell an emailer that his deposit in his account at Bear Stearns was safe, but through a clever sound bite, (Jon) Stewart, and subsequently (Frank) Rich—neither of whom have bothered to listen to the context of the pulled quote—pass off the notion of account safety as an out-and-out buy recommendation. The absurdity astounds me. If you called '' Mad Money'' and asked me about Citigroup, I would tell you that the common stock might be worthless, but I would never tell you to pull your money out of the bank because I was worried about its solvency. Your money is safe in Citi as I said it was in Bear. The fact that I was right rankles me even more."

An article by author Michael Lewis for Bloomberg News said that TheStreet.com listed Bear Stearns as a "Buy" at $62 per share on March 11, 2008, which was the same day as the caller's question and a day before the collapse of Bear Stearns. During the Jon Stewart–Jim Cramer conflict, on '' The Daily Show'' on March 12, 2009, Cramer admitted he made mistakes on his Bear Stearns calls.

Performance of Action Alerts charitable trust

Cramer says that, between 2002 and May 2009, the performance of his ''"Action Alerts PLUS"'' charitable trust outpaced the S&P 500 Index and the Russell 2000 Index. The charitable trust realized a return of 31.75%, the S&P 500 had a return of 18.75%, and the Russell 2000 had a return of 22.51%. On an annual basis, the trust outperformed the S&P 500 by 7.35%, and the Russell 2000 Index by 3.33%. Paul Bolster said that Cramer beats the market in part because of the excess risk in his picks. "If we adjust for his market risk, we come up with an excess return that is essentially zero", Bolster said, adding that "zero", in this case, means his returns are roughly in line with the risk he's taking on. Another criticism of Actions Alerts Plus was that it did not compare itself to indexes that include dividend reinvestment (as the SEC requires for stock-oriented mutual funds). According to Kiplinger's article "One recent ction Alerts PLUSand included a chart, under the headline "Action Alert PLUS is CRUSHING the S&P 500," showing that the picks returned about 39% from the portfolio's inception through last March 31, compared with 15.5% for the S&P 500 over the same nine-year, three-month period. But the S&P figure did not include reinvested dividends. With them, the S&P 500 returned 38.3%."

A study by Wharton researchers Jonathan Hartley and Matthew Olson found that in the timeframe of August 2001 to March 2016, Cramer's charitable trust underperformed the S&P 500 primarily as a result of underexposure to market returns in years after the 2008 financial crisis. As of March 31, 2016, Cramer's trust since inception had a cumulative return of 64.5%, whereas the S&P 500 fewer dividends returned 70% during the same timeframe. Wharton finance professor Robert Stambaugh said he didn't think the findings showed significant underperformance or outperformance when adjusting for a variety of factors, but did say "It's a commendable attempt to dig more deeply into the style that underlies Cramer's stock picks."

Criticism of President Obama's policies in March 2009

On March 2, 2009, Cramer said that President Barack Obama was on a "radical agenda," and said that was responsible for "the greatest wealth destruction I have seen by a president". In response to a reporter's question, Press Secretary Robert Gibbs replied, "If you turn on a certain program, it's geared to a very small audience. I'm not entirely sure what he's pointing to make some of the statements..... You can go back and look at any number of statements he's made in the past about the economy and wonder where some of the back-ups for those are, too."

On March 5, 2009, Cramer responded to the White House, saying, "Backup? Look at the incredible decline in the stock market, in all indices, since the inauguration of the president, with the drop accelerating when the budget plan came to light because of the massive fear and indecision the document sowed: Raising taxes on the eve of what could be a second Great Depression, destroying the profits in healthcare companies, tinkering with the mortgage deduction at a time when U.S. house price depreciation is behind much of the world's morass and certainly the devastation affecting our banks, and pushing an aggressive cap and trade program that could raise the price of energy for millions of people." By the end of Obama's term in office, major stock market indexes had more than doubled from the levels of March 2009.

Subsequent debate with Frank Rich

Referring to March 8, 2009, charges leveled against Cramer by '' The New York Times'' columnist Frank Rich, Cramer said that he does not understand how Obama and his staff planned to raise taxes, institute cap-and-trade limitations, and rework the healthcare system all during a recession. The article said: "It isn't that Cramer disagrees with Obama's vision for the country – he even agrees with taxing the rich – but now is not the time to put those plans into action. The president needs to solve our housing, employment, and financial problems, and only then turn his attention to healthcare and changing the mortgage deduction."

Controversy with Nouriel Roubini

Cramer wrote in 2009 that Nouriel Roubini was "intoxicated" with his own "prescience and vision," and should realize that things are better than he predicted. Roubini called Cramer a "buffoon," and told him to "just shut up".Joe Keohane (January 9, 2011)
"That guy who called the big one? Don’t listen to him."
'' The Boston Globe''.

Debate with Jon Stewart in 2009

On March 12, 2009, Cramer appeared on ''The Daily Show with Jon Stewart''. Stewart reiterated earlier claims regarding the CNBC host's "silly and/or embarrassing and/or stupid financial observations." Moreover, he said CNBC shirked its journalistic duty by believing corporate lies rather than being an investigative "powerful tool of illumination." Cramer disagreed with Stewart on a few points, but acknowledged that he could have done a better job foreseeing the economic collapse: "We all should have seen it more."

Stewart also discussed how short-selling was detrimental to the markets and investors. Cramer said to Stewart that short-selling was detrimental, stated his opposition to it, and said that he had never engaged in it. This contradicted earlier statements in which he described going short while managing a hedge fund. In a December 2006 interview from TheStreet.com's "Wall Street Confidential" webcast, Cramer said, "A lot of times when I was short at my hedge fund. ... When I was positioned short—meaning I needed it down—I would create a level of activity beforehand that could drive the futures." He said, "I will say this: I am trying to expose this stuff, exactly what you guys do, and I've been trying to get the regulators to look at it." However, Stewart played several video clips from 2006 where Cramer discussed the spreading of false rumors to drive down stock prices and encouraged short-selling by hedge funds as a means to generate returns. At one point in a clip from December 22, 2006, he said, "I would encourage anyone in a hedge fund to do it." He called it a very quick way to make money and very satisfying. He continued, "By the way, no one else in the world would ever admit that, but I don't care, and again, I'm not gonna say it on TV." Stewart responded, "I want the Jim Cramer on CNBC to protect me from that Jim Cramer." Cramer again admitted that he could do better and that he should try to change. The interview ended when Stewart pointedly suggested: "Maybe we can remove the 'financial expert' and the 'In Cramer We Trust' and start getting back to fundamentals on the reporting, as well, and I can go back to making fart noises and funny faces." Cramer responded: "I think we make that deal right here".

Criticism of the Federal Reserve in 2007-2008

On August 3, 2007, in what was described a "rant" Cramer made a plea for the Federal Reserve to cut interest rates. Cramer said of the Fed Committee, "They're nuts. They know nothing. This is a different kinda market. And the Fed is asleep." When the transcript from the August 7, 2007, meeting of the Federal Reserve Open Markets Committee was subsequently released on August 28, 2007, it showed that Cramer's comments elicited laughter from participants during a comment from Dennis Lockhart

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