James Joseph Cramer (born February 10, 1955) is an American television personality and author. He is the host of ''
Mad Money
''Mad Money'' is an American finance television program hosted by Jim Cramer that began airing on CNBC on March 14, 2005. Its main focus is investment and speculation, particularly in public company stocks.
Cramer defines "mad money" as th ...
'' on
CNBC
CNBC (formerly Consumer News and Business Channel) is an American basic cable business news channel. It provides business news programming on weekdays from 5:00 a.m. to 7:00 p.m., Eastern Time, while broadcasting talk sho ...
and an anchor on ''
Squawk on the Street
''Squawk on the Street'', which debuted on December 19, 2005, is a business show on CNBC that follows the first 90 minutes of trading on Wall Street in the United States.
Originally airing as a one-hour program, the show doubled its airtime t ...
''. A former hedge fund manager, founder, and senior partner of Cramer Berkowitz, Cramer wrote 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). He co-founded
TheStreet.com
''TheStreet'' is a financial news and financial literacy website. It is a subsidiary of The Arena Group. The company provides both free content and subscription services such as Action Alerts Plus a stock recommendation portfolio co-managed by B ...
, which he wrote for from 1996 to 2021. Cramer hosted ''Kudlow & Cramer'' from 2002 to 2005.
Early life
Cramer was born in 1955 in
Wyndmoor, Pennsylvania (a suburb of
Philadelphia
Philadelphia, often called Philly, is the largest city in the Commonwealth of Pennsylvania, the sixth-largest city in the U.S., the second-largest city in both the Northeast megalopolis and Mid-Atlantic regions after New York City. Sinc ...
),
to Jewish parents. 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 went to ]Springfield Township High School
Springfield Township High School (commonly STHS) is a public high school serving grades 9-12. The school serves Springfield Township, Pennsylvania and is the sole high school of the Springfield Township School District.
History
In 1922, Spring ...
in Montgomery County, Pennsylvania.
Among his first jobs, starting sometime in 1971, Cramer sold Coca-Cola
Coca-Cola, or Coke, is a carbonated soft drink manufactured by the Coca-Cola Company. Originally marketed as a temperance drink and intended as a patent medicine, it was invented in the late 19th century by John Stith Pemberton in Atlanta ...
and then ice cream at Veterans Stadium
Veterans Stadium was a multi-purpose stadium in Philadelphia, Pennsylvania, United States, at the northeast corner of Broad Street and Pattison Avenue, part of the South Philadelphia Sports Complex. The seating capacities were 65,358 for footb ...
during Philadelphia Phillies
The Philadelphia Phillies are an American professional baseball team based in Philadelphia. They compete in Major League Baseball (MLB) as a member of the National League (NL) National League East, East division. Since 2004, the team's home sta ...
games.
Cramer first began studying stock
In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...
s in the fourth grade and continued the habit through high school.[
]
Education and early career
In 1977, Cramer graduated ''magna cum laude
Latin honors are a system of Latin phrases used in some colleges and universities to indicate the level of distinction with which an academic degree has been earned. The system is primarily used in the United States. It is also used in some So ...
'' from Harvard College
Harvard College is the undergraduate college of Harvard University, an Ivy League research university in Cambridge, Massachusetts. Founded in 1636, Harvard College is the original school of Harvard University, the oldest institution of higher lea ...
with a Bachelor of Arts
Bachelor of arts (BA or AB; from the Latin ', ', or ') is a bachelor's degree awarded for an undergraduate program in the arts, or, in some cases, other disciplines. A Bachelor of Arts degree course is generally completed in three or four years ...
in government
A government is the system or group of people governing an organized community, generally a state.
In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a ...
. While at Harvard, Cramer was the president and editor-in-chief of ''The Harvard Crimson
''The Harvard Crimson'' is the student newspaper of Harvard University and was founded in 1873. Run entirely by Harvard College undergraduates, it served for many years as the only daily newspaper in Cambridge, Massachusetts. Beginning in the f ...
''.[ Additionally, Cramer was a ]National Merit Scholar
The National Merit Scholarship Program is a United States academic scholarship competition for recognition and university scholarships administered by the National Merit Scholarship Corporation (NMSC), a privately funded, not-for-profit organizati ...
.
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
Tallahassee ( ) is the capital city of the U.S. state of Florida. It is the county seat and only incorporated municipality in Leon County, Florida, Leon County. Tallahassee became the capital of Florida, then the Florida Territory, in 1824. In ...
, 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
Richard A. Oppel (born Jan. 30, 1943 in Newark, N.J.) is an American newspaper, magazine and digital editor living in Austin, Texas. He was interim editor-in-chief (May 5, 2018 – Feb. 1, 2019) of ''Texas Monthly'', an Austin-based publication ...
said: "ramer
Ramer may refer to:
; Places in the United States
*Ramer, Alabama, an unincorporated community in Montgomery County, Alabama
*Ramer, Tennessee, a city in McNairy County, Tennessee
*Ramer Field, a stadium in River Falls, Wisconsin
; People
* Geor ...
was like a driving ram. He was great at getting the story."[ He subsequently worked for the '']Los Angeles Herald-Examiner
The ''Los Angeles Herald Examiner'' was a major Los Angeles daily newspaper, published in the afternoon from Monday to Friday and in the morning on Saturdays and Sundays. It was part of the Hearst syndicate. It was formed when the afternoon ' ...
'' 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
The governor of California is the head of government of the U.S. state of California. The governor is the commander-in-chief of the California National Guard and the California State Guard.
Established in the Constitution of California, the g ...
Jerry Brown
Edmund Gerald Brown Jr. (born April 7, 1938) is an American lawyer, author, and politician who served as the 34th and 39th governor of California from 1975 to 1983 and 2011 to 2019. A member of the Democratic Party, he was elected Secretary of S ...
.[ Cramer was one of the first reporters at '' American Lawyer''.
In 1984, Cramer received a ]Juris Doctor
The Juris Doctor (J.D. or JD), also known as Doctor of Jurisprudence (J.D., JD, D.Jur., or DJur), is a graduate-entry professional degree in law
and one of several Doctor of Law degrees. The J.D. is the standard degree obtained to practice law ...
degree from Harvard Law School
Harvard Law School (Harvard Law or HLS) is the law school of Harvard University, a private research university in Cambridge, Massachusetts. Founded in 1817, it is the oldest continuously operating law school in the United States.
Each class ...
.[ Cramer started investing in the ]stock market
A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include ''securities'' listed on a public stock exchange, as ...
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
''The New Republic'' is an American magazine of commentary on politics, contemporary culture, and the arts. Founded in 1914 by several leaders of the progressive movement, it attempted to find a balance between "a liberalism centered in hum ...
'' owner Martin Peretz
Martin H. Peretz (; born December 6, 1938) is an American former magazine publisher and educator. Formerly an assistant professor at Harvard University, he purchased ''The New Republic'' in 1974 and assumed editorial control shortly afterwards. H ...
, 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
Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
.
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
A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as sho ...
, Cramer & Co. (later Cramer, Berkowitz & Co.). The fund operated out of the offices of Michael Steinhardt
Michael H. Steinhardt (born December 7, 1940) is an American billionaire hedge fund manager, philanthropist, and former antiquities collector. In 1967, he founded a hedge fund, Steinhardt Partners which he ran until he closed it in 1995. After a ...
. Early investors included friend and classmate Eliot Spitzer
Eliot Laurence Spitzer (born June 10, 1959) is an American politician and attorney. A member of the Democratic Party (United States), Democratic Party, he was the 54th governor of New York from 2007 until his resignation in 2008.
Spitzer was b ...
, Steve Brill, and Martin Peretz
Martin H. Peretz (; born December 6, 1938) is an American former magazine publisher and educator. Formerly an assistant professor at Harvard University, he purchased ''The New Republic'' in 1974 and assumed editorial control shortly afterwards. H ...
. Cramer raised $450 million in $5 million increments and received a fee of 20% of the profits he generated.[
Cramer claims to have sold all of his stocks on the Friday before ]Black Monday (1987)
Black Monday is the name commonly given to the global, sudden, severe, and largely unexpected stock market crash on Monday, October 19, 1987. In Australia and New Zealand, the day is also referred to as ''Black Tuesday'' because of the time zo ...
. From 1988 to 2000, Cramer claims to have 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 claims to have produced a 24% average annual return over 14 years and "routinely ]aken
Aken may refer to:
*Aken (god), in Ancient Egyptian religion
*Aken (Elbe), a town in Saxony-Anhalt, Germany
*Aachen, a city in Germany
*Aken (novel), a 1996 novel by Madis Kõiv
{{disambiguation ...
home $10 million a year and more."[ However, his results have been ]disputed
Controversy is a state of prolonged public dispute or debate, usually concerning a matter of conflicting opinion or point of view. The word was coined from the Latin ''controversia'', as a composite of ''controversus'' – "turned in an opposite d ...
.
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
''SmartMoney'' was ''The Wall Street Journal''s magazine of personal business. The finance magazine launched in 1992 by Hearst Corporation and Dow Jones & Company. Its first editor was Norman Pearlstine. In 2010, Hearst sold its stake to Dow Jone ...
'' 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
''TheStreet'' is a financial news and financial literacy website. It is a subsidiary of The Arena Group. The company provides both free content and subscription services such as Action Alerts Plus a stock recommendation portfolio co-managed by B ...
, a financial news and investment website
A website (also written as a web site) is a collection of web pages and related content that is identified by a common domain name and published on at least one web server. Examples of notable websites are Google Search, Google, Facebook, Amaz ...
. 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
''Mad Money'' is an American finance television program hosted by Jim Cramer that began airing on CNBC on March 14, 2005. Its main focus is investment and speculation, particularly in public company stocks.
Cramer defines "mad money" as th ...
with Jim Cramer'' first aired on CNBC
CNBC (formerly Consumer News and Business Channel) is an American basic cable business news channel. It provides business news programming on weekdays from 5:00 a.m. to 7:00 p.m., Eastern Time, while broadcasting talk sho ...
in 2005. The stated goal of the show is to provide people engaging in do-it-yourself investing Do-it-yourself (DIY) investing, self-directed investing or self-managed investing is an investment approach where the investor chooses to build and manage his or her own investment portfolio instead of hiring an agent, such as a stockbroker, inves ...
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
''Mad Money'' is an American finance television program hosted by Jim Cramer that began airing on CNBC on March 14, 2005. Its main focus is investment and speculation, particularly in public company stocks.
Cramer defines "mad money" as th ...
''.
On November 13, 2005, Dan Rather interviewed Cramer on ''60 Minutes
''60 Minutes'' is an American television news magazine broadcast on the CBS television network. Debuting in 1968, the program was created by Don Hewitt and Bill Leonard, who chose to set it apart from other news programs by using a unique styl ...
''. 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
The term "arrested development" has had multiple meanings for over 200 years. In the field of medicine, the term "arrested development" was first used, ''circa'' 1835–1836, to mean a stoppage of physical development; the term continues to be use ...
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
''Live with Kelly and Ryan'' (or simply ''Live'') is an American syndicated morning talk show hosted by Kelly Ripa and Ryan Seacrest. Executive produced by Michael Gelman, the ''Live with...'' show formula has aired under various hosts since ...
'', '' Cheap Seats'', '' Late Night with Conan O'Brien'', ''The Tonight Show with Jay Leno
''The Tonight Show with Jay Leno'' is an American late-night talk show hosted by Jay Leno that first aired from May 25, 1992, to May 29, 2009. It resumed production on March 1, 2010 and ended on February 6, 2014.
The fourth incarnation of the ...
'', ''Late Show with David Letterman
The ''Late Show with David Letterman'' is an American late-night talk show hosted by David Letterman on CBS, the first iteration of the The Late Show (franchise), ''Late Show'' franchise. The show debuted on August 30, 1993, and was produced by ...
'', ''Jimmy Kimmel Live!
''Jimmy Kimmel Live!'' is an American late-night talk show, created and hosted by Jimmy Kimmel, broadcast on American Broadcasting Company, ABC. The nightly hour-long show debuted on January 26, 2003, at Hollywood Masonic Temple in Hollywood, Los ...
'' in February 2008 and as a guest judge on ''The Apprentice
''The Apprentice'' is a Reality competition, reality talent game show franchise originally aired in 2004 in the United States.
Created by U.S.-based British producer Mark Burnett, the show depicts contestants from around the country with variou ...
'' in January 2007 and was interviewed by Jon Stewart
Jon Stewart (born Jonathan Stuart Leibowitz; November 28, 1962) is an American comedian, political commentator, and television host. He hosted ''The Daily Show'', a satirical news program on Comedy Central, from 1999 to 2015 and now hosts ''Th ...
on ''The Daily Show
''The Daily Show'' is an American late-night talk and satirical news television program. It airs each Monday through Thursday on Comedy Central with release shortly after on Paramount+. ''The Daily Show'' draws its comedy and satire form from ...
'' in March 2009 (see Jon Stewart–Jim Cramer conflict
On March 12, 2009, television personality Jim Cramer appeared as a guest on ''The Daily Show, The Daily Show with Jon Stewart''. The host of CNBC's ''Mad Money'', Cramer appeared in response to host Jon Stewart's highly publicized week-long critici ...
).[
Cramer also appeared in the 2008 motion picture '']Iron Man
Iron Man is a superhero appearing in American comic books published by Marvel Comics. The character was co-created by writer and editor Stan Lee, developed by scripter Larry Lieber, and designed by artists Don Heck and Jack Kirby. The charact ...
'' 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
Wall Street is an eight-block-long street in the Financial District of Lower Manhattan in New York City. It runs between Broadway in the west to South Street and the East River in the east. The term "Wall Street" has become a metonym for t ...
'' movie by telling the filmmakers how he would get through to Gordon Gekko
Gordon Gekko is a composite character in the 1987 film '' Wall Street'' and its 2010 sequel '' Wall Street: Money Never Sleeps'', both directed by Oliver Stone. Gekko was portrayed by actor Michael Douglas, whose performance in the first fil ...
.
Controversies
Fox News Channel lawsuit
In 2000, Cramer and TheStreet.com
''TheStreet'' is a financial news and financial literacy website. It is a subsidiary of The Arena Group. The company provides both free content and subscription services such as Action Alerts Plus a stock recommendation portfolio co-managed by B ...
settled a lawsuit with Fox News Channel
The Fox News Channel, abbreviated FNC, commonly known as Fox News, and stylized in all caps, is an American multinational conservative cable news television channel based in New York City. It is owned by Fox News Media, which itself is owne ...
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
''TheStreet'' is a financial news and financial literacy website. It is a subsidiary of The Arena Group. The company provides both free content and subscription services such as Action Alerts Plus a stock recommendation portfolio co-managed by B ...
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
Short may refer to:
Places
* Short (crater), a lunar impact crater on the near side of the Moon
* Short, Mississippi, an unincorporated community
* Short, Oklahoma, a census-designated place
People
* Short (surname)
* List of people known as ...
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
Futures may mean:
Finance
*Futures contract, a tradable financial derivatives contract
*Futures exchange, a financial market where futures contracts are traded
* ''Futures'' (magazine), an American finance magazine
Music
* ''Futures'' (album), a ...
." 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
Robert V. Pisani (born 1956) is a correspondent for CNBC.
Career
Pisani has worked for CNBC since 1990. Until 1997, Pisani largely covered the real estate industry and corporate management. Since then, he has reported live from the floor of the N ...
, 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
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
''" 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 claimed to have 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
The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet.
Between 1995 and its peak in March 2000, the Nasdaq Compo ...
. However, this performance has not been independently verified.
In January 2000, close to the peak of the dot-com bubble
The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet.
Between 1995 and its peak in March 2000, the Nasdaq Compo ...
, Cramer recommended investing in technology stocks and suggested a repeat of the stock performance of 1999.
In February 2000, the year in which Cramer claimed to have produced a 36% return, Cramer claimed that there were only 10 stocks he wanted to own and he was buying them every day. These stocks were 724 Solutions, Ariba
SAP Ariba is an American software and information technology services company located in Palo Alto, California. It was acquired by German software maker SAP SE for $4.3 billion in 2012.
Company beginnings
Ariba (now SAP Ariba) was founded in ...
, Digital Island
Digital Island is a business-to-business telecommunications provider based at 8 Nugent Street in Grafton, Auckland, New Zealand
New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two mai ...
, Exodus Communications, InfoSpace
Infospace, Inc. was an American company that offered private label search engine, online directory, and provider of metadata feeds. The company's flagship metasearch site was Dogpile and its other notable consumer brands were WebCrawler and MetaC ...
, Inktomi
Inktomi Corporation was a company that provided software for Internet service providers (ISPs). It was incorporated in Delaware and headquartered in Foster City, California, United States. Customers included Microsoft, HotBot, Amazon.com, eBay, ...
, Mercury Interactive
Mercury Interactive Corporation was an Israeli company acquired by the HP Software Division. Mercury offered software for application management, application delivery, change and configuration management, service-oriented architecture, change r ...
, Sonera
Telia Company AB is a Swedish multinational telecommunications company and mobile network operator present in Sweden, Finland, Norway, Denmark, Estonia, Latvia and Lithuania.
Telia also owns TV4 Media which includes TV4 in Sweden, MTV Oy in F ...
, VeriSign, and Veritas Software
Veritas Technologies LLC. is an American international data management company headquartered in Santa Clara, California. The company has its origins in Tolerant Systems, founded in 1983 and later renamed Veritas Software. It specializes in stora ...
. He also dismissed the investing strategy of Benjamin Graham
Benjamin Graham (; né Grossbaum; May 9, 1894 – September 21, 1976) was a British-born American economist, professor and investor. He is widely known as the "father of value investing", and wrote two of the founding texts in neoclassical inves ...
and David Dodd
David LeFevre Dodd (August 23, 1895 – September 18, 1988) was an American educator, financial analyst, author, economist, and investor. In his student years, Dodd was a ' and colleague of Benjamin Graham at Columbia Business School.
The Wall ...
and claimed that price–earnings ratio
The price-earnings ratio, also known as P/E ratio, P/E, or PER, is the ratio of a company's share (stock) price to the company's earnings per share. The ratio is used for valuing companies and to find out whether they are overvalued or under ...
s did not matter. All 10 of these stock picks fell in value significantly during 2000 as the dot-com bubble
The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet.
Between 1995 and its peak in March 2000, the Nasdaq Compo ...
burst, making the 36% reported return during that year questionable.
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%.
Cramer was criticized for repeatedly giving erroneous advice during the Financial crisis of 2007–2008
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fi ...
. He recommended investing in Bear Stearns
The Bear Stearns Companies, Inc. was a New York-based global investment bank, securities trading and brokerage firm that failed in 2008 as part of the global financial crisis and recession, and was subsequently sold to JPMorgan Chase. The compa ...
, Merrill Lynch
Merrill (officially Merrill Lynch, Pierce, Fenner & Smith Incorporated), previously branded Merrill Lynch, is an American investment management and wealth management division of Bank of America. Along with BofA Securities, the investment bank ...
, Morgan Stanley
Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
, Wachovia, and Lehman Brothers
Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before Bankruptcy of Lehman Brothers, filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Gol ...
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.
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%."
A February 9, 2009, article in ''The Wall Street Journal'' noted that betting against Cramer's Buy recommendations using short-term options
Option or Options may refer to:
Computing
*Option key, a key on Apple computer keyboards
*Option type, a polymorphic data type in programming languages
* Command-line option, an optional parameter to a command
*OPTIONS, an HTTP request method
...
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 named Peter submitted the question "Should I be worried about Bear Stearns
The Bear Stearns Companies, Inc. was a New York-based global investment bank, securities trading and brokerage firm that failed in 2008 as part of the global financial crisis and recession, and was subsequently sold to JPMorgan Chase. The compa ...
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
JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York City and incorporated in Delaware. As of 2022, JPMorgan Chase is the largest bank in the United States, the ...
. On March 17, 2008, Cramer claimed his statements were made in regards to the liquidity of accounts held at Bear Stearns as opposed to the stock. Cramer stated 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
''Mad Money'' is an American finance television program hosted by Jim Cramer that began airing on CNBC on March 14, 2005. Its main focus is investment and speculation, particularly in public company stocks.
Cramer defines "mad money" as th ...
'' and asked me about Citigroup
Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking ...
, 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
Bloomberg News (originally Bloomberg Business News) is an international news agency headquartered in New York City and a division of Bloomberg L.P. Content produced by Bloomberg News is disseminated through Bloomberg Terminals, Bloomberg Televi ...
states 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 March 12, 2009, television personality Jim Cramer appeared as a guest on ''The Daily Show, The Daily Show with Jon Stewart''. The host of CNBC's ''Mad Money'', Cramer appeared in response to host Jon Stewart's highly publicized week-long critici ...
, on ''The Daily Show
''The Daily Show'' is an American late-night talk and satirical news television program. It airs each Monday through Thursday on Comedy Central with release shortly after on Paramount+. ''The Daily Show'' draws its comedy and satire form from ...
'' on March 12, 2009, Cramer admitted he made mistakes on his Bear Stearns calls.[
]
Performance of Action Alerts charitable trust
Cramer claims 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 Russell 2000 Index is a small cap company , small-cap stock market index that makes up the smallest 2,000 stocks in the Russell 3000 Index. It was started by the Frank Russell Company in 1984. The index is maintained by FTSE Russell, a subsi ...
. 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 explains 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 is that it does 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 done 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
The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices. As of D ...
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 time frame. 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 state "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
Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party, Obama was the first African-American president of the U ...
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
The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
, 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
''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...
'' columnist Frank Rich, Cramer said that he does not understand how Obama and his staff plan to raise taxes, institute cap-and-trade limitations, and rework the healthcare system all during a recession. The article says: "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."
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 claimed 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 admitted to Stewart that short-selling was detrimental, stated his opposition to it, and claimed that he had never engaged in it. This contradicts earlier statements in which he described going short while managing a hedge fund. In a December 2006 interview from ]TheStreet.com
''TheStreet'' is a financial news and financial literacy website. It is a subsidiary of The Arena Group. The company provides both free content and subscription services such as Action Alerts Plus a stock recommendation portfolio co-managed by B ...
's "Wall Street Confidential" webcast, Cramer said, "A lot of times when I was short
Short may refer to:
Places
* Short (crater), a lunar impact crater on the near side of the Moon
* Short, Mississippi, an unincorporated community
* Short, Oklahoma, a census-designated place
People
* Short (surname)
* List of people known as ...
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
Futures may mean:
Finance
*Futures contract, a tradable financial derivatives contract
*Futures exchange, a financial market where futures contracts are traded
* ''Futures'' (magazine), an American finance magazine
Music
* ''Futures'' (album), a ...
."[ 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
A diatribe (from the Greek ''διατριβή''), also known less formally as rant, is a lengthy oration, though often reduced to writing, made in criticism of someone or something, often employing humor, sarcasm, and appeals to emotion.
Histo ...
" Cramer made a plea for the Federal Reserve
The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...
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, president, and CEO of the Federal Reserve Bank of Atlanta. "I believe that the correct policy posture is to let the markets work through the changes in risk appetite and pricing that are underway, but the market observations of one of my more strident conversational counterparts—and that is not Jim Cramer aughterare worth sharing." Cramer was vindicated for his negative outlook when the financial crisis of 2007-2008 and the Great Recession
The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...
took hold.
On '' Hardball with Chris Matthews'' on September 19, 2008, Cramer blamed the Federal Reserve for the United States housing bubble.
"Inverse Cramer" ETF
In 2022, in response to a long-running series of unrelated humorous comments on betting against Cramer's stock recommendations, ''The Financial Times'' uncovered SEC filings which revealed that Tuttle Capital Management, the same firm behind an ETF which betted against Cathie Wood's ARK funds, had filed to launch two funds with one labeled "LJIM" and the other "IJIM", representing "Long Cramer" (which would bet with all of Cramer's recommendations) and "Inverse Cramer" (betting against everything that Cramer recommended) respectively. The Inverse Cramer ETF listed in its filings that aside from jokes or obviously meritable investment recommendations, in general, the fund would bet against all of Cramer's recommendations both on ''Mad Money'' and Cramer's Twitter feed, and the fund estimates to have a "high turnover rate". The fund gained additional coverage upon Meta Platforms
Meta Platforms, Inc., (file no. 3835815) trade name, doing business as Meta and formerly named Facebook, Inc., and TheFacebook, Inc., is an American multinational technology conglomerate based in Menlo Park, California. The company owns Facebo ...
' Q3 2022 earnings miss and Cramer's subsequent apology, which outlined another loss for the company and was seen by some that Cramer's apology was seen as a sign to buy Meta stock.
Upon the launch of the fund, prior to Meta's earnings, Cramer responded on Twitter by touting his reputation and claiming the ETF would not last long before stating he wouldn't be making further comments on the company. He apparently reversed this decision, though, and continued to make comments before seemingly reversing course and "welcoming" the fund, though further touting his reputation.
SEC subpoena of journalists in conjunction with its investigation of Gradient Analytics
In February 2006, the U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
served subpoenas requesting information from several journalists, including Cramer, in conjunction with allegations of collusion between short-sellers of Overstock.com
Overstock.com, Inc. is an American internet retailer selling primarily furniture headquartered in Midvale, Utah, near Salt Lake City. Businessman Patrick M. Byrne founded Overstock.com in 1999. The company initially sold exclusively surplus and ...
and Gradient Analytics
Gradient Analytics, Inc., founded in 1996 by Donn Vickrey and Dr. Carr Bettis as Camelback Research Alliance, Inc. and based in Scottsdale, Arizona, was an independent equity research company.Dow Jones Dow Jones is a combination of the names of business partners Charles Dow and Edward Jones.
Dow Jones & Company
Dow, Jones and Charles Bergstresser founded Dow Jones & Company in 1882. That company eventually became a subsidiary of News Corp, and ...
objected to the government's demands for communications between journalists and their sources. SEC Chairman Christopher Cox
Charles Christopher Cox (born October 16, 1952) is an American attorney and politician who served as chair of the U.S. Securities and Exchange Commission, a 17-year Republican member of the United States House of Representatives, and member of t ...
said neither he nor any of the SEC's four other commissioners were aware of the subpoenas, which he called "highly unusual."
Calling House Speaker Nancy Pelosi "Crazy Nancy" during an interview
On September 15, 2020, during a TV interview with US Speaker of the House
The speaker of a deliberative assembly, especially a legislative body, is its presiding officer, or the chair. The title was first used in 1377 in England.
Usage
The title was first recorded in 1377 to describe the role of Thomas de Hungerf ...
Nancy Pelosi
Nancy Patricia Pelosi (; ; born March 26, 1940) is an American politician who has served as Speaker of the United States House of Representatives since 2019 and previously from 2007 to 2011. She has represented in the United States House of ...
, Cramer addressed her as "Crazy Nancy", and then sent several tweets in which he defended his actions. He later apologized for using the phrase, which was also employed frequently by President Donald Trump
Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
Trump graduated from the Wharton School of the University of Pe ...
. During a discussion about the likelihood of a coronavirus relief bill, Cramer expressed doubt over the deal saying, "I mean, what deal can we have, Crazy Nancy?" He then quickly added "I'm sorry, I—that was the president. I have such reverence for the office, I would never use that term." "But you just did," Pelosi replied.
Personal life
From 1988 to 2009, Cramer was married to Karen Backfisch, with whom he had two children. On April 18, 2015, Cramer married Lisa Cadette Detwiler, a real-estate broker, and general manager of The Longshoreman, an Italian bistro/restaurant in the borough of Brooklyn
Brooklyn () is a borough of New York City, coextensive with Kings County, in the U.S. state of New York. Kings County is the most populous county in the State of New York, and the second-most densely populated county in the United States, be ...
in New York City.
In a 2013 interview on '' The Carlos Watson Show'' Cramer stated that he dealt with mental health issues surrounding his anger and his workplace behavior, attributing the problem to his childhood experiences with his father.
Cramer lives in Summit, New Jersey
Summit is a city in Union County, in the U.S. state of New Jersey. The city is located on a ridge in northern- central New Jersey, within the Raritan Valley and Rahway Valley regions in the New York metropolitan area. At the 2010 United Sta ...
.[ He also has a 65-acre estate in the New Jersey countryside][ and a ]summer house
A summer house or summerhouse has traditionally referred to a building or shelter used for relaxation in warm weather. This would often take the form of a small, roofed building on the grounds of a larger one, but could also be built in a garden ...
in Quogue, New York
Quogue () is a village in the Town of Southampton in Suffolk County, on the South Fork of Long Island, in New York, United States. As of the 2010 United States Census, the population was 967, down from 1,018 at the 2000 census.
Geography
Acco ...
, on Long Island
Long Island is a densely populated island in the southeastern region of the U.S. state of New York (state), New York, part of the New York metropolitan area. With over 8 million people, Long Island is the most populous island in the United Sta ...
.
In 2009, Cramer and four other investors purchased the DeBary Inn in Summit, New Jersey
Summit is a city in Union County, in the U.S. state of New Jersey. The city is located on a ridge in northern- central New Jersey, within the Raritan Valley and Rahway Valley regions in the New York metropolitan area. At the 2010 United Sta ...
. He and his wife also own Bar San Miguel, a restaurant and bar serving Mexican cuisine
Mexican cuisine consists of the cooking cuisines and traditions of the modern country of Mexico. Its earliest roots lie in Mesoamerican cuisine. Its ingredients and methods begin with the first agricultural communities such as the Olmec and M ...
in Carroll Gardens, Brooklyn.
Cramer was one of about 200 candidates for the Time 100
''Time'' 100 (often stylized as ''TIME'' 100) is an annual listicle of the 100 most influential people in the world, assembled by the American news magazine ''Time''. First published in 1999 as the result of a debate among American academics, po ...
in 2009.
Cramer loves Philadelphia and has said the key to an economic resurgence of the city is a high-speed rail
High-speed rail (HSR) is a type of rail system that runs significantly faster than traditional rail, using an integrated system of specialised rolling stock and dedicated tracks. While there is no single standard that applies worldwide, lines ...
connection with New York City.
He is a passionate Philadelphia Eagles
The Philadelphia Eagles are a professional American football team based in Philadelphia. The Eagles compete in the National Football League (NFL) as a member club of the league's National Football Conference (NFC) East division. The team plays ...
fan and cried after the team was victorious in Super Bowl LII. He has held season ticket
A season ticket, or season pass, is a ticket that grants privileges over a defined period of time.
History
The ''Oxford English Dictionary'' has illustrative quotations which show the term ''season ticket'' used in the United States in 1820 ...
s for 20 years and has met former Eagles coach Doug Pederson many times.
In December 2021, Cramer announced he tested positive for COVID-19
Coronavirus disease 2019 (COVID-19) is a contagious disease caused by a virus, the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The first known case was COVID-19 pandemic in Hubei, identified in Wuhan, China, in December ...
after attending an event that required PCR testing
The polymerase chain reaction (PCR) is a method widely used to rapidly make millions to billions of copies (complete or partial) of a specific DNA sample, allowing scientists to take a very small sample of DNA and amplify it (or a part of it) ...
. He said his symptoms were mild due to having two injections of the Moderna COVID-19 vaccine and a Moderna booster. His wife was sicker and she received the Johnson & Johnson
Johnson & Johnson (J&J) is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. Its common stock is a component of the Dow Jones Industrial Average and the company i ...
initial dose and the Moderna booster.
Bibliography
* ''Confessions of a Street Addict'' (2002)
* ''You Got Screwed! Why Wall Street Tanked and How You Can Prosper'' (2002)
* ''Jim Cramer's Real Money: Sane Investing in an Insane World'' (2005)
* ''Jim Cramer's Mad Money: Watch TV, Get Rich'' (2006)
* ''Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)'' (2007)
* ''Jim Cramer's Getting Back to Even'' (2009)
* ''Jim Cramer's Get Rich Carefully'' (2013)
See also
* Broadcast journalism
Broadcast journalism is the field of news and journals which are broadcast by electronic methods instead of the older methods, such as printed newspapers and posters. It works on radio (via air, cable, and Internet), television (via air, cable, ...
* List of journalists in New York City
References
External links
*
{{DEFAULTSORT:Cramer, Jim
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