Jim Cramer: You Know You’re A Guru If …
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Remember that comedy routine from Jeff Foxworthy? The one that starts with “you know you’re a redneck if ….”? I’m not that creative to create an entire list, but we can certainly start one about so-called financial gurus and keep adding to it, right? Let’s jump right into it!
You know you’re a guru if … you have your own learning annex seminar. The learning annex boasts speaker line-ups such as Donald Trump, Rich Dad Robert Kiyosaki, Suze Orman, and yes Jim Cramer of CNBC’s Mad Money fame. In this video from this past weekend’s seminar, you’ll see Jim recommend 5 stocks. In classic guru fashion, this is how he announced his recommendations:
“We want to win and there are winnings to be had [...] I need everyone in this audience to buy one share of these 5 stocks I’m about to mention. 1 share! 1 share will do it!”
Many have scrutinized Jim Cramer’s track record of his recommendations and have found it to be nothing special and rather mediocre for a trader with his history. If you actually cared for his five recommendations in the video. They are:
- Goldman Sachs
- New York Stock Exchange
- Mastercard
- Toyota Motors
- Sears Holdings
I’m not attacking his recommendations, but I deplore the presentation. Snakes-oil salesman do that, I expect more from Jim Cramer. First of all, buying one share is ludicrous, what about the commissions involved? No true financial adviser looking out for your interest would recommend such a course of action. You can make the argument to make these transactions through ShareBuilder. But let’s face it, this dramatical presentation has no place in a serious environment of discussion.
Predictably, Jim Cramer pulls out the cliché argument of “buying one share of Berkshire Hathaway” as the selling point for buying into Sears. Jim, if the comparison holds up and you are so comfortable that buying one share of Berkshire at $180 would result in it going to over $3000 today, you’d be recommending people to buy as much Sears share as possible. Asking them to buy just ONE share is preying on their mindset of investing being EASY to do.
View the entire video and tell me you don’t shudder!
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One Response to “Jim Cramer: You Know You’re A Guru If …”
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Jason Coleman Says:
November 24th, 2006 at 7:03 pmI haven’t checked out the video yet (will do), but I’ve heard Cramer use the “buy just one share” line before. While this is pretty silly advice usually, I like the point that he is trying to make:
Some people will shy away from buying stocks with high share prices (like those in his list, GOOG, etc) and will instead buy shares of a lower-priced competitor (though that stock may not be as good) because they like the feel of having a lot of shares. In reality, we shouldn’t let the $ of the stock price affect our buying decisions. Toyota is a better buy than Ford, even if you’ll only end up with 1/12th as many shares or whatever.
I think Cramer often has trouble with his delivery and tends to make things sound easier than they are. Which is probably what’s happening in this video clip.
