Jim Cramer

James Joseph "Jim" Cramer (born February 10, 1955) is an American television host of CNBC's Mad Money and a co-founder of TheStreet.com, a former hedge fund manager, and a best-selling author. He is also a regular contributor to New York magazine and an occasional contributor to Time Magazine.

Cramer was born to Polish-American parents in Wyndmoor, Pennsylvania, a suburb of 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. He graduated magna cum laude from Harvard College in 1977 with a B.A. in government.

Career

Investor

Cramer started privately investing in the stock market during his time at law school, using his student loans. Cramer began leaving stock picks on his answering machine, impressing The New Republic owner Martin Peretz, who gave him $500,000 to invest; Cramer earned Peretz $150,000 in two years.

His track record helped Cramer obtain employment in 1984 as a stock broker in Goldman Sachs' Private Wealth Management division. Cramer's success in this position led him to found his own hedge fund, Cramer & Co. (later Cramer, Berkowitz, & Co.), in 1987. The fund operated out of the offices of hedge fund pioneer Michael Steinhardt's Steinhardt, Fine, Berkowitz & Co., and early investors included Eliot Spitzer (a Harvard classmate and one of his oldest friends), Brill, and Peretz.

Cramer's fund had one down year from 1988-2000 while he ran it, in 1998, a year that was disastrous for many in the industry. Cramer, Berkowitz finished down 2-3% and they did not charge a management fee that year to their clients. In 1999 the fund returned 47%; in 2000 28%, beating the S&P 500 by 38 percentage points. Cramer retired from his hedge fund in 2001, finishing with a 24% average annual return over 14 years and having "routinely [taken] home $10 million a year and more." The fund was taken over by his former partner Jeff Berkowitz after Cramer's retirement.

Cramer claimed to be worth $50 to $100 million in October 2005. He no longer owns any stocks of his own other than his stake in TheStreet.com, currently only trading for his charitable trust.

TheStreet.com

In 1996 Cramer co-founded TheStreet.com with The New Republic editor Martin Peretz, one of his hedge fund's original clients. Cramer is currently a market commentator and adviser to the TheStreet.com, as well as its largest shareholder. He also manages a charitable trust stock portfolio which is tied to TheStreet.com through a subscription service called the Action Alerts PLUS Portfolio. Cramer currently works on a new project, MainStreet.com.

Mad Money

The cable television program Mad Money with Jim Cramer began on CNBC in 2005. As mentioned on CNBC's Web site in an article titled, "Mad Money Manifesto" by Jim Cramer, the show's mission statement and Cramer's job is "to help regular people – shareholders at home watching the show – to better understand the market." Mad Money is about education, "this show isn’t about stock picking, as many critics think it is." The show features eight segments: The Lightning Round, Game Plan, Executive Decision , Off the Charts, Sell Block, Sudden Death, Am I Diversified, and Mad Mail.

Other television appearances

Cramer has made appearances on NBC's Today show, NBC Nightly News, Live with Regis and Kelly, ESPN Classic's Cheap Seats, NBC's Late Night With Conan O'Brien, Comedy Central's The Daily Show with Jon Stewart & The Colbert Report, The Tonight Show with Jay Leno, Late Show with David Letterman, ABC's Jimmy Kimmel Live and NBC's The Apprentice (U.S. Season 7) called The Celebrity Apprentice.

Cramer also appears in the 2008 motion picture Iron Man, spoofing Stark Industries on his show Mad Money. He is also expected to appear in the upcoming movie Wall Street 2: Money Never Sleeps.

Performance of stock picks and history of market calls

Cramer is a former hedge fund manager and founder/owner and Senior Partner of Cramer Berkowitz, where Jim reported a compounded "rate of return of 24% after all fees for 15 years" at Cramer Berkowitz. He retired from his hedge fund in 2001, where he finished with a self reported 36% return in 2001.

On August 3, 2007, before the stock market fell and before the recession began, Jim Cramer can be heard in what is now known as the infamous 'Rant Heard Round the World.' Cramer made a passionate plea to Federal Reserve Chairman Ben Bernanke to consider cutting interest rates and, in turn, help the market and the people who are losing their jobs on Wall Street.

On July 8, 2008 Jim brought up the possibility of bank failures. In his article, 'Look At The Facts' Cramer said, "The losses are increasing, the auction-rate preferreds are now biting, the mortgage implode-a-meter now measures how many home-builders are going under." The following day on July 9, 2008, during a segment on Mad Money Cramer again pointed out the forthcoming Financial Collapse. "Most frightening," Cramer said, "is the silence from those in the government who could take action but haven't. If silence means there is no plan, that's trouble for everyone." A few months later on September 15, 2008, the beginning of the market meltdown occurred.

On Hardball with Chris Matthews for September 19, 2008, Cramer suggested, "It's not too late to be on the sideline." On this day the Dow was resting at 11,388. Cramer spoke again on the Today Show on October 6, 2008, suggesting to investors, "Whatever money you need for the next five years, please take it out of the stock market." By February 24, 2009 the Dow was down to 7,351; since Jim Cramer's first warning to investors the DOW plunged some 3,000 points.

Dispute with the White House

On March 2, 2009, Jim Cramer drew the attention of some critics after his evaluation of President Obama’s spending plans and the administration’s handling of the banking crisis. Cramer’s name came up on March 3 during a White House press briefing after Cramer said that Obama was responsible for “the greatest wealth destruction I have seen by a president.” An offended White House shot back. Press Secretary Robert Gibbs said, "I'm not entirely sure what he's pointing to make some of the statements." When pressed further by NBC's Tom Costello, Gibbs said, "If you turn on a certain program it's geared to a very small audience [...] And 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 backup for those are, too."

On March 5, Jim Cramer responded to the White House. He rebuked, "Huh? 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 health care 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."

Cramer questioned criticism he received which he explained makes him "uncomfortable being in the crosshairs of columnists and comedians I enjoy." Cramer asked, "So, why after toiling in the cable wilderness for four years with Mad Money am I the target of the wrath of the Obama clan, and the darling, albeit surely momentary, of the Obama-critics? After all, my criticism of Obama's handling of the economic crisis is a lot less pointed than my withering August 2007 'They Know Nothing' meltdown against Ben Bernanke and the previous administration's handling of the economic crisis."

Criticism

John Stewart

On March 12, 2009, Jim 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." For his part, 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. 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."

Wachovia

On September 15, 2008, Cramer invited the CEO of Wachovia on his show, Mad Money, in order to recommend the stock to potential investors. Cramer agreed with CEO Robert Steel that the company was fundamentally sound and that the ratio of good loans to bad loans was low. Cramer would recommend the stock to his viewers before Citi announced their intentions to acquire Wachovia's banking operations. On Monday, September 29, Wachovia's share prices dropped over 95% in the pre-market and over 80% in market hours following news of a possible Citi acquisition. Prior to this, Cramer had stated, "This is run by Bob Steel. He's as close as we're going to get to a great banker. I think he's going to make this a great company. " Eventually, Wells Fargo would purchase Wachovia for $15.1 billion in an all stock deal leaving Wachovia shareholders with 0.1991 shares of Wells Fargo for every share of Wachovia stock, resulting in a large decline in stockholder value. In 2008, Wachovia shares declined 88 percent.

Frank Rich

Referring to charges leveled against Jim Cramer by The New York Times' Frank Rich on March 8, 2009, Cramer said, "I called out [Paulson and Geithner] for their mistakes, where was Frank Rich praising me on that? Where was that?"

On March 9, 2009, during a segment on Mad Money, Jim Cramer said Frank Rich "chastised me for endorsing Wachovia's stock after then-CEO Bob Steel came onto Mad Money and spoke positively about the bank." After the bank collapsed, Jim Cramer reminded viewers that he takes pride in "the part about accountability," and is the first person to admit when wrong. Cramer mentioned, "Look, I was taken in, the guy pantsed me. I made a mistake. The SEC is investigating Steel's appearance on the show for truthfulness, though. I made a mistake, but they're investigating him to see if he lied. Bigger issue. Sometimes you just get had."

Jim Cramer apologized both on Mad Money and on the Today Show for believing in Steel.

Biographies

• Jim Cramer biography on CNBC.com
• Jim Cramer biography on TheStreet.com

Jim Cramer's Rules for Investing and Trading

• Cramer's Twenty-five Rules for Investing
• Watch and Learn Cramer's Rules to the Game
• 20 Golden Rules for Traders
• Cramer's 20 Rules for Effective Trade Execution
• Cramer's 20 Rules To Stop Losing Money

External Links

• Jim Cramer's Mad Money, Homepage
• TheStreet.com
• Jim Cramer archive blog by Jim Cramer
• Mad Money w/ Jim Cramer MADCAP RECAP
• Stockpickr Stock market social networking site.
• Time's 100 Most Influential People of 2009 - Jim Cramer