The first time I met Cramer was on the set of his show “Mad Money”. The show hadn’t officially launched yet but he wanted to try out the idea of having guests on the dress rehearsals. I was the first guest. I did so poorly he immediately dashed the idea (at least initially) of having guests on the set. I wrote for thestreet.com for years. I sold a company, Stockpickr, to them. I probably did dozens of videos with Jim after that and got to know him quite a bit.
In the meantime, some disclaimers: this article has nothing to do with his stock picks. There’s been plenty of articles about those in either direction. I haven’t watched his show in years. I don’t subscribe to his newsletter or follow his picks and I haven’t read his last book or so.
Second, this is not some “ass-kissing” article. I have nothing to do with thestreet.com. I haven’t spoken to Jim in over two years. I have zero business relationship with Jim or thestreet nor do I intend on having one. If anything, I’m going in the exact opposite direction of writing about stocks.
Ten things I Learned from Jim Cramer
1) Return emails. I’m somehow incapable of doing this. If my own mother sends me an email it might take me six months to return it. I was just a day late even wishing her a Happy Birthday. (which was January 9. I wrote an email on January 10. To my own mother). I’m a horrible communicator. In the fall of 2002 I wrote Jim and gave him 10 ideas for articles he should write. This was during a period (described in an earlier post, or maybe a post I plan to write but haven’t yet) when my only idea for getting out of the gutter I was in was coming up with ideas for other people and sending it to them. I sent out emails to twenty people all with ideas. Some of the article ideas I suggested Jim write were “10 stocks trading below cash” (this was September, 2002 where even TSCM was trading below cash). 10 convert arb opportunities, How to trade gap down opens, etc. (Only one other guy responded to me and I ended up trading for him, starting a career trading for several hedge funds and then starting a fund of funds. Here are 10 things I learned trading for Victor Niederhoffer).
Jim wrote back almost immediately: “You should write these!” And I began writing for thestreet.com then. My first writing gig. I framed the $200 check I got after I wrote my first article for them (the framer said, “are you sure you don’t want to cash this?”). When I sold Stockpickr to thestreet, Jim signed the back of that $200 check.
I need to get better at responding to people who write to me. Jim writes back instantly to just about anyone. I think the key is to even be able to write back and say “Thanks!” just to acknowledge that you read what the person has to say and that you realize he exists. I always feel like I have to write a detailed personal letter whenever I respond to someone. So emails pile up. I just started going through my back-emails. After two hours I got back to January 1 and stopped. For now.
2) Financial Media = Entertainment. Lets not fool ourselves. Jim is first and foremost an entertainer. If you have a TV show where you wear costumes, yell at the screen, throw chairs, and interview guests often in the hope for some laughs then I don’t think anyone would call that anything other than entertainment. Jim has said this repeatedly that he’s an entertainer. 99% of people shouldn’t be buying stocks anyway (this is my opinion) and those that do buy stocks should do their own research. And Jim’s the best entertainer in the financial media business. Really look at his show and watch what he does. he combines education, with interviews, with six or so different voices (he takes voice lessons, or did at least, to be able to do all that he can do with his voice in a show and not go hoarse after a few days), with stock picks in different industries, call-ins, and even magic tricks (the lightning round, more on that later).
I’ve been on TV quite a bit, but Jim is the best by several orders of magnitude. Jim always delivers more value than the simple “buy IBM” that still pervades most financial blogs.
3) Ignore the Haters. I feel like I’ve been brutalized quite a bit. I was bullish in 2008. But stuck to my guns in 2009 and 2010 and had many picks with 100%+ returns. But I really have had a hard time personally dealing with the haters. (See, 7 Reasons to Hate Me). And they came from all corners. People who were your friends one day, turn up anonymously on message boards the next trashing you in every possible way. But Jim’s seen far worse. The front page Barrons article in 2007 was brutal for him. The Jon Stewart escapade where Cramer was like a deer in headlights and didn’t say, “but Jon, at the very bottom, on the Today Show, I told everyone to get out of stocks”. Why didn’t you say that, I IMed him at 3am the next morning and he just wrote back, “who cares.” That might’ve been the last time I IMed with him.
4) Commentary belongs in Financial Journalism. Cramer changed everything when he started thestreet.com and added commentary from professional investors into the mix. The negative argument was then (and still is) that there is a conflict of interest if someone owns a stock to be then talking about it on a platform meant for serious journalism. But that’s bullshit. Who better to write about a company then someone who has serious resources and used those resources to dig under every rock and uncover as much as they can before putting hard-earned money to work. Journalism has changed over the past 15 years to accept this and move the needle even further but at the time it was a contentious issue.
5) Know Everything. I was standing by a TV with Jim once and the ticker was running by at the bottom of the CNBC screen. He started doing a lightning round on every stock going by, telling why each stock was up or down a nickel, a penny, a whatever. He knew every earnings report, every news item that was relevant that day. He doesn’t know every stock (see below) but he does know everything he needs to know for THAT DAY. This doesn’t mean you should know everything about stocks. But whatever field I’ve been in I’ve always tried to know everything about the competition, the technology, the subtleties and the nuances of the field. Jim has dominated financial media for 20 years by doing this. Whenever I’ve invested in a private company, the most important criteria I have is that the CEO has the same kind of database of knowledge in their industry that Jim has in financial media (note: I say “media” and not just “stocks”).
6) Use every moment. If I’m up at 11pm, Jim’s on IM. If I’m up at 3am, Jim’s on IM. He’s in the office at 6. He works until his show, then he networks at dinners, etc. he doesn’t waste a moment. You can’t ask him to lunch or coffee. He’ll ignore you. He only does what he needs to do to make his show better. He’s fully aware that he is competing with everyone else in media. So if he can fit in an extra 10 hours of work a day (which is my guess on how much more he works per day than the average human) then that’s an extra 3600 hours a year he’s working more than you or me. Because he works every weekend. I know this because of all the weekends I’d be getting emails from him asking questions about different stocks he was preparing for his shows that upcoming week. Tim Ferriss is famous for working “The Four Hour Work Week” as exemplified by his blog and book. That’s one lifestyle and many people prefer that. Jim is the opposite. He wants to be better than everyone else in his business and to not relax for 100 hours a week while everyone passes him by. I think he would go crazy if he only worked a four hour week. Jim should write a book “The 120 Hour Work Week”.
7) Improve every day. Jim told me this was the motto of Bill Meehan, thestreet.com columnist who tragically died at the World Trade Center in 9/11. I believe he follows this motto as well. He was constantly reading. Constantly trying to improve his show. For people who don’t believe me watch these videos:
- His 1997 video on PBS
- His initial Mad Money videos versus his shows now
- His first day on MSNBC after Don Imus left and Jim took over the spot for the week versus his third day on the show.
You’ll see the various ways he developed his style and approach and improved in each area.
8) Magic tricks. Its impossible to know every stocks. There are 10,000 public companies out there. And he gets calls and questions about basically all 10,000 of them. But he knows if a company is in the semi-testing space, has a decent chart, and he doesn’t know the company at all, he can always say, “I like the company, love the sector, but you know you have go with the NUMBER ONE player in the space, KLAC!” (I’m making up an example). He always has a way out when he doesn’t know something and it’s a useful technique combined with the database of knowledge he has to fall back on.
9) Self-promotion. Jim’s the king. One time CNBC was trying to get me on the show “On the Money”. I wasn’t returning their calls for weeks. Finally, Jim comes up to me and says, “James, you’re embarrassing me. Why aren’t you even returning their calls.” I mumbled a bit and he said, “listen, you have to promote yourself. Nobody else is going to do it for you. “ I’m still horrible at promoting anything I do (my last book, out in December 2008, was a total flop) but hopefully I’ve learned a thing or two.
10) Bleeding. I’m a big fan of “Confessions of a Street Addict”, his one autobiographical book. I appreciate the rest of his books because I know he’s catering to an audience that is eager to make them bestsellers. But his first book is his best because he bleeds all over the pages. You can’t be a writer if you can’t bleed and Jim is a writer. Chapter 7 he’s practically suicidal when his fund was on the brink and all hell was breaking loose in 1998 (or maybe it was 1997, I forget). Or when he talks about almost going out of business the first few weeks he was in the hedge fund business and down an immediate 9% (he had to give the money back if he went down 10%). Or all the times thestreet.com looked like it was going to go bankrupt when it first started (he’s not the best manager of people by a long shot and it took him awhile to build a steady ship, particularly amidst the turbulence he was experiencing with his partner, Marty Peretz).
This goes back to financial media as entertainment. Nobody’s life is going to get better if you tell them IBM is a better buy right now than MSFT. One goes up 8% versus 7% and it doesn’t make anyone’s life any better. But people look at stories of someone on the brink of suicide, struggling to keep business, marriage, friendships alive while everything looks like its falling apart and you can point to that and say, “yeah, I’ve been there. That’s just like me and he’s as crazy and screwed up as I am.”
We all bleed. We’re all human – painfully so, as much as we all try to hide it in our suits, our cubicles, our genius opinions at parties and in corporate meetings. Watching Jim on “Mad Money” is sometimes like watching an impending train wreck. Jim’s a little crazy, a little off the deep end, but it’s either the kind of crazy we all see a little of in ourselves, or the kind of crazy we all wish we had.