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Jim Cramer

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This article is about the television personality and host of Mad Money. For the champion Scrabble player, see Jim Kramer.
James J. Cramer
Born (1955-02-10) February 10, 1955 (age 69)
Wyndmoor, Pennsylvania, USA
Occupation(s)Television personality
Author

James J. "Jim" Cramer (b. (1955-02-10) February 10, 1955 (age 69), Wyndmoor, Pennsylvania) is an American television personality, former hedge fund manager, and best-selling author.

Cramer is host of CNBC's Mad Money and co-founder of TheStreet.com. According to the January 27, 2006 episode of High Net Worth on CNBC, Cramer has accumulated a net worth of over $100 million. He currently resides in Summit, New Jersey.

Early years

Jim Cramer comes from a Jewish family.[1] He grew up in the town of Wyndmoor, Pennsylvania, outside 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.

Cramer graduated magna cum laude from Harvard College in 1977 where he was also president of the Harvard Crimson. At this point in his life, Cramer was a staunch leftist, naming his plan to revitalize the Crimson after Lenin's "What Is To Be Done?".[2]

Career

Journalist

After college, following a two-month tenure as the key operator at Congressional Quarterly, he worked as a journalist at the Tallahassee Democrat in Tallahassee, Florida. Living almost next door to the Chi Omega sorority house and Florida State University, he was one of the first on the scene after serial killer Ted Bundy attacked four women, killing two of them in 1978.[citation needed] After Tallahassee, he worked at the Los Angeles Herald Examiner as a spot news reporter, covering "basically anyone who died violently in California."[3] While he was covering a shooting in San Diego for the Examiner, a burglar cleaned out both his bungalow in L.A. and his checking account. For the next nine months, he lived mostly out of his car, with a .22 pistol and hatchet for protection.[4]

Following this experience, Cramer moved in with his sister in Greenwich Village[citation needed]. His sister was studying to be a lawyer and encouraged Cramer to become a prosecutor. Cramer helped to found American Lawyer magazine[citation needed] and then decided to go to law school.[5]

More recently, Cramer has been a contributor to New York magazine since 2000.[6] He is also an occasional contributor to Time magazine.[7]

Cramer, Berkowitz, & Co.

Cramer went back to school to get a Juris Doctor degree from Harvard Law School (he met Eliot Spitzer on his first day of law school[8]). After graduating in 1984, Cramer's plans to become a prosecutor were dashed when he was rejected by the Southern District of New York (which at the time was being run by Rudy Giuliani) because his law school grades were not good enough.[9] Instead, Cramer went to work in Goldman Sachs' Sales & Trading department. Cramer proved to be an incredibly successful stock broker, making $700,000 in his first year on the job.[10]

In 1987, Cramer founded his own hedge fund, Cramer & Co. (later Cramer, Berkowitz, & Co.), working out of the offices of hedge fund pioneer Michael Steinhardt's Steinhardt, Fine, Berkowitz & Co. The fund's early investors included Eliot Spitzer (a Harvard classmate), Steven Brill (Cramer's old boss at American Lawyer), and Martin Peretz.[1] A year later, Jim married Karen Backfisch-Olufsen, who was a trader with Steinhardt's firm. Cramer retired from the firm in 2001, which is now being run by his former partner Jeff Berkowitz.

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 later had a falling out with Peretz over business matters.[11] He is currently a market commentator and adviser to the TheStreet.com, as well as its largest shareholder. Cramer also manages a charitable trust stock portfolio which is tied to TheStreet.com through a subscription service called the Action Alerts PLUS Portfolio.

Mad Money

Main article: Mad Money

Cramer now has his own television show on CNBC, Mad Money with Jim Cramer, which features his rapid-fire opinions on stocks suggested by callers. Mad Money is also well known for over-the-top antics such as Cramer throwing chairs, showing his latest book whenever a caller mentions it, humorous sound effects, and for the catch-phrase "Booyah".

File:Mad Money.jpg
Logo for the Mad Money television show.

Cramer frequently takes the show on the road to various U.S. colleges. Mad Money continues to be one of CNBC's most highly rated shows.[12]

Other television and radio shows

After being a frequent guest commentator on CNBC in the late 1990s, Cramer co-hosted CNBC shows America Now and Kudlow & Cramer with Lawrence Kudlow in the early 2000s.

Cramer hosted a one-hour radio show, "Jim Cramer's Real Money," until December 2006. The show was similar to his Mad Money TV show. He also guest hosted in the slot caused by the cancellation of Imus in the Morning (MSNBC and WFAN/Westwood One) in May 2007.

Cameos and Other Appearances

  • 60 Minutes interview

On November 13, 2005, Dan Rather did a sit-down interview with Cramer on 60 Minutes. Among the topics of discussion were Cramer's past at his fund (including footage of Cramer trading during the 90s at his New York offices), his violent temper while at the fund, and what finally led him to come to his senses and "calm down". Footage of Cramer at his family home with his daughters and wife was also included. On November 15, 2005, Jim mentioned on his program that he received hundreds and hundreds of e-mails after his 60 Minutes interview. This report was taped before Cramer's radio show, Smart Money with Jim Cramer moved to WOR and became syndicated under the CBS Radio banner.

  • Arrested Development

In 2005, Cramer appeared as himself in two episodes of the now-defunct FOX TV series Arrested Development. He appeared to first announce that he had upgraded Bluth Company stock to a "Don't Buy" from a "Triple Sell", and then to say that the stock was not a "Don't Buy" anymore, but a "Risky".

Cramer has also made appearances on NBC's Today, 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 Colbert Report, The Tonight Show with Jay Leno, and Jimmy Kimmel Live.

Controversy

Fox News Channel Lawsuit

In 2000, Cramer settled a lawsuit with Fox News Channel in which Fox had claimed Cramer reneged on a deal to produce a show for them. Their conflict began when Fox complained that Cramer promoted TheStreet.com's stock on the air.[13]

Trading With The Enemy

In 2002, Nicholas Maier, a former trader at Cramer's hedge fund, released the book, Trading With The Enemy, about his time at Cramer, Berkowitz & Co. In the book, Maier alleged that Cramer and the hedge fund engaged in illegal trading practices. Maier also stated that Cramer was the subject of an SEC investigation. Cramer denied the allegations and threatened to sue the publisher for libel. The publisher of the book quickly destroyed 4000 copies of the original release, and re-released it after editing out 4 pages that were possibly libelous.[14]

SEC Subpoena

In February 2006, an SEC investigation into allegations of collusion between short-sellers and a stock research firm led to the serving of subpoenas to TheStreet.com and Cramer, as well as journalists for Dow Jones and Marketwatch.com. Cramer disclosed the subpoena on his Mad Money television show, holding it up to the camera with the word "Bull" handwritten on it.[15] Both Cramer and TheStreet.com refused to comply with the SEC's demands for communications between journalists and their sources, and First Amendment advocates publicly criticized the SEC move. Soon after, the SEC later stated it would not enforce the subpoena, and the investigation of the stock research firm was dropped a year later. In April 2006, the SEC announced a new policy on subpoenaing journalists, saying it would avoid issuing subpoenas "that might impair the news gathering and reporting functions." Any subpoena issued to a journalist must now be approved by the SEC's enforcement director.[16]

The allegations had been raised publicly and in a lawsuit against Gradient by Overstock.com chief executive Patrick M. Byrne. In May 2007, it was revealed that the SEC had subpoenaed Byrne in May 2006, in connection with an investigation of the company.[17]

Market Manipulation: TheStreet.com Interview

In March 2007, a December 2006 interview from TheStreet.com's "Wall Street Confidential" webcast stirred controversy after it appeared on YouTube.com. In the video, Cramer described activities used by hedge fund managers to manipulate stock prices; some illegal and some debatably legal.[18] 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, I would create a level of activity beforehand that would 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 claimed that everything he did was legal, but that illegal activity is common in the hedge fund industry. He also stated that some hedge fund managers spread false rumors to drive a stock down: " ...it's important to create a new truth, to develop a fiction."[19] Cramer said one strategy to keep a stock price down is to spread negative rumors to reporters he described as "the Pisanis of the world". "You have to use these guys," said Cramer. He also discussed getting "the bozo reporter from The Wall Street Journal" to publish a negative article.[20] Cramer said this practice, although illegal, is easy to do "because the SEC doesn't understand it."[21] [22]

Criticism

  • In January 2006, Joseph Nocera opined that the "people who are watching [Mad Money] and following [Cramer's] advice are fools." [2]
  • In February 2007, Henry Blodget -- himself indicted for civil securities fraud in 2002 and banned for life from the securities industry -- criticized Cramer for overstating his abilities as a market forecaster, noting that in 2006 Cramer's suggested portfolio lost money "despite nearly every major equity market on earth being up between about 15 percent and 30 percent." [23]
  • In March 2007, a review by CXO Advisory showed that Cramer's stock picks have done slightly better than the market averages.[24]
  • In March 2007, Joseph Parnes, noted short seller featured in Barron's, refuted positions by Cramer on CNBC, and has shown to his audience in his publication Shortex that using positions contrary to Cramer's recommendations is actually more advantageous.

Bibliography

  • Jim Cramer's Mad Money: Watch TV, Get Rich ISBN 1-4165-3790-2
  • Jim Cramer's Real Money: Sane Investing in an Insane World ISBN 0-7432-2489-2
  • Confessions of a Street Addict ISBN 0-7432-2487-6
  • You Got Screwed! Why Wall Street Tanked and How You Can Prosper ISBN 0-7432-4690-X

References

  1. ^ Feinberg, Andrew (2005-10-24). "Cover Boy Cramer". The Money Monster Web Log. The Kiplinger Washington Editors, Inc. Retrieved 2007-06-14. {{cite news}}: Check date values in: |accessdate= and |date= (help)
  2. ^ Tim Russert Show, July 14, 2007.
  3. ^ Tim Russert Show, July 14, 2007.
  4. ^ Cramer, James J. (2002). Confessions of a Street Addict. New York, NY: Simon & Schuster. pp. pp. 4-6. ISBN 0-7432-2487-6. {{cite book}}: |pages= has extra text (help)
  5. ^ Tim Russert Show, July 14, 2007.
  6. ^ ""Archives: James J. Cramer"". nymag.com. Retrieved 2007-04-13.
  7. ^ ""Archives: James J. Cramer"". time.com. Retrieved 2007-04-17.
  8. ^ Tim Russert Show, July 14, 2007.
  9. ^ Tim Russert Show, July 14, 2007.
  10. ^ Tim Russert Show, July 14, 2007.
  11. ^ The Fortune Tellers, p.146, Howard Kurtz, 2000, The Free Press books
  12. ^ Cramer, James J. "Cramer vs. Cramer". New York Magazine. New York Magazine Holdings LLC. Retrieved 2007-08-03.
  13. ^ Associated Press/USA Today (December 4, 2000). "Jim Cramer Quits Hedge Fund".
  14. ^ Joyce, Erin (2002-05-13). "TheStreet.com's Cramer vs. Maier, Round II". internetnews.com. Jupitermedia Corporation. Retrieved 2007-02-18. {{cite news}}: Check date values in: |date= (help)
  15. ^ Matthew Goldstein, TheStreet.com (February 27, 2006). "TheStreet.com, Cramer Get Subpoenas in Gradient Probe".
  16. ^ Marcy Gordon, Associated Press (February 14, 2007). "SEC Ends Probe of Gradient".
  17. ^ New York Post (May 11,2007). "Company Byrne-d on Probe Report". {{cite web}}: Check date values in: |date= (help)
  18. ^ Henry Bloget, Slate (March 22, 2007). "Cramer vs. Cramer: Will his crazy confession destroy his career?".
  19. ^ Thomas Kostigen, MarketWatch.com (March 23, 2007). "Jim Cramer's big mouth: His revelations only confirm what dupes average investors are".
  20. ^ Roddy Boyd, The New York Post (March 21, 2007). "Cramer's Big Mouth: Clip Could Run Afoul of CNBC".
  21. ^ Matt Krantz, USA Today (March 24,2007). "CNBC's Cramer boasts of manipulating markets". {{cite web}}: Check date values in: |date= (help)
  22. ^ Hamilton, Dane (2007-03-20). "Jim Cramer draws fire over manipulation comments". Retrieved 2007-03-20. {{cite web}}: Check date values in: |date= (help)
  23. ^ Blodget, Henry (2007-01-29). "Pay No Attention to That Crazy Man on TV". Slate. The Washington Post Company. Retrieved 2007-02-18. {{cite web}}: Check date values in: |date= (help)
  24. ^ LeCompte, Steve (2007-03-17). "Jim Cramer Deconstructed". Retrieved 2007-03-17. {{cite web}}: Check date values in: |date= (help)
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