Should You Stay Away From Jim Cramer?
The criticism the CNBC host received for his Bear Stearns call has deeper roots.
March 26, 2008 — -- He might be the most celebrated stock picker on TV, but many say Jim Cramer got it wrong and some have renewed an older criticism of the television host: Small investors who follow Cramer stand to lose big.
Cramer is the host of "Mad Money," a weekday program on CNBC on which the animated hedge fund millionaire darts around his set, shouting investment advice and punctuating market talk with many a jubilant "Boo-yah."
Since the shocking collapse of investment bank Bear Stearns, Cramer has taken serious heat for comments he made on his March 11 show.
He told viewers: "Don't move your money from Bear! That's just being silly! Don't be silly!"
Cramer and CNBC have defended his statements, arguing that Cramer's assertions on the bank were in reference to a viewer's question on Bear Stearns' liquidity, not its stock prices.
CNBC spokesman Brian Steel said that on the Friday before Bear's meltdown, Cramer presciently called the bank's stock worthless. Cramer could not be reached for direct comment.
"I think that anybody who has a fundamental understanding about capital markets knows the distinction between [a] question about stocks and liquidity," Steel said.
Whether Cramer's viewers understood that the host and former hedge fund manager was not talking about Bear Stearns' stocks is unclear. Meanwhile CNBC's defense of Cramer has not insulated its heavily promoted star.
In recent days, finance and news blogs have blasted Cramer, and Comedy Central's news parody "The Daily Show" gave him a not-so-gentle ribbing: "I love the way Jim Cramer breaks down really complex financial issues into ones that are wrong," host Jon Stewart said.
Upping the snark factor was Fox Business News, which took out half-page ads Monday in The New York Times and The Wall Street Journal, comparing Cramer's words to some of the most infamous quotes of the last century, including Neville Chamberlain's famous statement after conceding Czechoslovakia to Adolf Hitler's Germany: "I believe it is peace for our time."
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