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“This show is the way for me to educate, to
entertain, to help people make money, and I think it’s working.
And I’m totally driven by it. It is just a huge amount of fun,”
says Cramer.
Unlike most business shows, where analysts are gun-shy about
pushing stocks, Cramer lays it on the line. He clearly tells you
what stocks he thinks you ought to buy or sell and in the
process serves up a basic economics lesson.
“These two big countries, China and India, they’re finally
acting like capitalists and you got to understand capitalism, my
friends, is about conspicuous consumption,” Cramer told his
viewers recently.
The day 60 Minutes spent at CNBC’s studios, Cramer
and Krakower chose to lead their show with the topic of
diamonds.
“Diamonds! Think about it! Billions of people been gettin’
married without buying diamond rings in that country. They’re
communists. They don’t do that kinda thing. But not now. Now
when people in China or India decide to get hitched they do what
we do. They do what the Europeans do. They buy the darn
diamonds,” Cramer told his audience.
Cramer then pushed the stock of Anglo-American. It’s a British
producer of gold, platinum and diamonds. Since the show, the
stock has gone up over five percent before leveling off.
Cramer’s picks often move the market. But he’s had his share of
clunkers, too. After he recommended Dick’s Sporting Goods, the
stock got slammed, and Cramer was humbled.
“I blew it. I blew the call,” admits Cramer. “And I think you
have to own up to 'em, admit 'em. You can't say, ‘Hey, listen, I
was early on that,' or 'the Dicks, hey, you know, hey, listen,
it's not so bad. It's only down, hey.’ No! It's horrible!”
Cramer made his reputation and fortune as a smart and shrewd
stock market trader. But what distinguishes him now on
television is his nuttiness. He’s the Jerry Lewis of business
show hosts and he will do anything to grab your attention.
“One day you’re gonna wake up and the whole country will be
taken over by India,” Cramer tells his audience.
Cramer says his viewers see the real Jim Cramer on television.
Herb Greenberg, a senior columnist for MarketWatch.com, is a
frequent on-air guest. He and Cramer enjoy duking it out.
Does Greenberg think Cramer is crazy? “I think Jim has great
passion. Is he crazy? I think he's got the craziness that comes
with intelligence and brilliance and creativity,” explains
Greenberg.
Asked how he differs from Cramer, Greenberg says, “We're looking
at the world through two very different sets of eyes. I'm
looking at what can go wrong, Jim's looking at what can go
right. Jim's looking at how you can make money, I'm looking at
how you can avoid losing money. But that's what makes markets.”
There was a time in America when the market was the playground
of only the very rich. That changed in the 1970s, a decade that
marked the beginning of an investing craze. Today, about half of
all Americans are in the stock market.
Jim Cramer was among those who helped make stocks popular. And
despite the recent scandals at Enron and other companies where
executives were accused of corrupting the market, he remains as
bullish as ever.
Cramer acknowledges that he has said there are periods during
which the market is rigged for insiders, yet he advises his
viewers to buy various stocks. How does he reconcile that?
“I think that we are in a period of catharsis now where people
who cook books go to jail for 25 years. And that has changed the
equation and made business more honest then it was. I think the
answer is, is that overall, high quality stocks have
out-performed all other asset classes, whether it be gold,
whether it be real estate, whether it be bonds,” explains
Cramer. “So therefore, you've
got to try to find the high quality ones.
Because the averages are in your favor.”
Cramer started studying stocks in the fourth grade, continued
the habit through high school, got more compulsive about it at
Harvard, and never really stopped.
“I'd go to a ballgame. And it'd be like, ‘Oh, look at that, you
know, there's a Budweiser sign. Bud, you know 42 and
three-quarters, having a hard time going past 43. And you know,
people aren’t drinking beer over there. Take a look it'll be a
hotdog company. I'll be, like, Ballpark Franks, Sara Lee…’ And,
you know, these are things in my head.”
Cramer says he has several thousand stocks in his head, and has
for a long time.
Cramer started out as a newspaper reporter making $15,000 a
year, but before you could say “Warren Buffet” he was running a
hedge fund where he made his fortune.
He got a group of wealthy investors to cough up at least $5
million each and sunk the money, about $450 million, in the
market. Cramer took lots of risks, suffered reverses, and kept
over 20 percent of the profits. A middle-class kid from the
suburbs of Philadelphia, he became one of the most successful
traders on Wall Street.
But success turned Cramer into a monster who screamed and
cursed, smashed telephones and computers and terrorized his
employees.
Cramer agrees he had a violent temper in those days. “Yeah, I
did. Yeah, I'm not going to disagree with that. I mean, I had a
very bad temper.”
What made him so angry? “Because I wanted to achieve. And I felt
that I could master it. And whenever I didn't master it, it was
usually because of a mistake that I made. And I would think that
the mistakes should have been avoided. So I was very hard on
myself,” says Cramer.
On weekends, Cramer retreated to his 65-acre estate in the New
Jersey countryside. It’s the house the hedge fund built, and
it’s where Cramer came to escape. But even here, with his wife
Karen, herself a former stock market trader, and their two
daughters, he couldn’t shake his hedge fund mentality.
He remembers an incident that occurred when he was coaching his
daughter’s soccer team.
“Sure enough, we're down four nothing after the first half. And
I go in. I say, ‘Girls, you are all letting me down.’ And one
girl raises. She says, ‘We all had a sleep over. We were up
really late last night.’ And they all start crying,” recalls
Cramer. “And it's like uh, uh, uh, uh, girls, I'm really sorry.
I didn't mean it. I just…you didn't let me down, you know. It
took me awhile to kinda recognize that you had to…you can't be
like at the hedge fund. I mean, I was so cloistered at the hedge
fund that I didn't even know what it was like to deal with
people.”
It took something his father said to finally bring Cramer to his
senses. “And he just said to me, he says ‘Look, I just know
that, you know, I'm gonna outlive you. I just know that…’ And I
said, ‘Well, dad, I am a very successful hedge fund…’ He says,
‘It doesn't matter. I'm gonna outlive you. I'm gonna outlive
you. You can't go on like this.’”
At age 45, Jim Cramer went to the office and turned his life
around. “I went in after Thanksgiving, and I stood on the desk.
And I said, ‘It's all yours.’ Just, ‘I just never wanna be
bothered again. It's your company.’ And I just gave it up.”
But he didn’t give up his intensity. He just changed his game.
He is said to be worth somewhere between $50 and $100 million.
Except for the stake he has in his Web site, he only plays the
stock market now for his charitable trust, from which he does
not personally profit. Always an optimist, he nevertheless
believes that the real estate bubble is about to burst.
“I think real estate is very similar right now to what the
dotcoms were like in 2000. Everybody thinks you can’t miss with
real estate. Actually I shouldn't say that. In the last five
months, I think it's starting to dawn on people that real estate
can go wrong,” says Cramer.
On weekends, Cramer now assumes the role of gentleman farmer,
feeding his animals, clearing his pumpkin patch and finding time
to relax and unwind. But, come Monday, it’s show time.
Rather asked why Cramer comes in every day like he does, beating
himself up.
“I have a gift, Dan. I have a gift to turn people on to this
stuff, to get them involved… And I love doing it. I love to
teach and educate this stuff. This stuff is for me. This stuff
is really for me. It is the right thing. I cannot believe how
lucky I am, at this age to have come across an unbelievable
thing, which is a show that I run, and I love,” Cramer replied.
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