Jim Cramer: You Know You’re A Guru If …

By Vince on November 21, 2006 at 2:52 am · Filed under Jim Cramer

Remember that comedy routine from Jeff Foxworthy? You know, 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:

  1. Goldman Sachs
  2. New York Stock Exchange
  3. Mastercard
  4. Toyota Motors
  5. 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!

3 Comments »

  1. Flexo Said,

    November 22, 2006 @ 3:37 am

    Why does *he* “need” people to buy those particular stocks? The only reason he would “need” them to is to create a buzz about stocks he perhaps already owns. The “one share” gimmick is ridiculous, as you say, but human psychology fills in the rest: “If Cramer says 1 share of this stock is good, I might as well buy 100 if I can afford it.”

  2. Swintah Said,

    November 24, 2006 @ 1:59 pm

    If you think this sounds shady, check out Enterra(ENT) on Yahoo! (http://finance.yahoo.com/q?s=ENT).

    ENT is financing some current debt with convertables (balance sheet: http://tinyurl.com/yc8k2t). The convertibles are subordinated and unsecured debt - but they could convert to trust units at 9.25 (http://tinyurl.com/ycftql). ENT hit 52 week lows (repeatedly) in early/mid Nov.(14th and before), trading at a low of 6.78 (http://finance.yahoo.com/q/ce?s=ENT). Cramer pumps it (Nov.15) and it shoots up to 10 at close on the 17th. Now, financiers can convert crappy debt to equity at a profit.

    It would be interesting to see what the short interest looked like going in to early Nov.

    Now, wasn’t that “pump” convenient.

    Suspiciously yours,

    Swintah

  3. Zachary Said,

    April 6, 2007 @ 2:01 am

    Cramer is entertaining for sure, but I’m more of a buy-and-hold investor type than a trader.

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