March 23, 2007

This whole Jim Cramer thing is really, really interesting.

Now, you can't "foment." That's a violation. You can't create yourself an impression that a stock's down. But you do it anyway, because the SEC doesn't understand it. That's the only sense that I would say this is illegal. But a hedge fund that's not up a lot [this late in the year] really has to do a lot now to save itself. This is different from what I was talking about at the beginning where I was talking about buying the QQQs and stuff. This is actually blatantly illegal. But when you have six days and your company may be in doubt because you're down, I think it's really important to foment—if I were one of these guys—foment an impression that Research in Motion isn't any good. Because Research in Motion is the key today.

  • "The great thing about the market is that it has nothing to do with the actual stocks." I realized this about 20 years ago when I read that the value of derivatives was about four times the value of the underlying stocks. It seems to me like Cramer's telling the truth, but I don't know the U.S. market well enough to say whether he's exaggerating. Anyone who has both the power to move and an interest in moving the market is going to do so, but they're going to do so as unobtrusively as possible.
  • I always felt that Cramer was a fatuous gasbag of dubious skill and sketchy ethics. Now we have proof this is the case :) Really, that whole go go go trade all the time look for the next big stock stock market crap is exactly that for the small investor - crap. It's roulette, pure and simple, and someone else, as Cramer so ably points out (he's not stupid, he's just an asshole and a crook), has their hand on the wheel. HOWEVER, stocks overall have trended upward over time, and are the single best wealth accumulation vehicle you can access IF you aren't stupid or greedy. What makes wealth in the market is TIME. The longer in, the more you make. Then comes taxes and fees - minimize those wherever you can. Then comes diversity and risk tolerance. Pick a level of risk you're comforatble with and stick with it. Buy a diverse portfolio and hold it. Reinvest everything. Dump in money you save up, and for god's sake make sure you are in your company's 401K to the extent that you can be, but ALWAYS to the extent that your company matches. All that is money the gov't doesn't get. It's boring, it doesn't make for compelling TV, but it works.
  • What Cramer said is true. This kind of micro-market manipulation does happen all the time. And the SEC can't stop it. But what he is talking about is the pretty lame manipulation. Sure you can "foment", sure you can try to goose the ask price. But if you're caught in a down market day, the hedge fund will be f*cked. The rubes are those who are putting money into hedge funds in the first place. The money managers are paid for taking maximum risks. If they win, they get a cut of the profit, if they lose, oh well. That means they borrow money to buy stocks, they take huge one-sided bets with derivatives, they dance around regulations. This is a recipe for major disaster. In a prolonged market decline, many of these hedge funds will be bare-assed naked in a blizzard.
  • Yep. You can bet my kids' college funds are NOT in hedge funds. tax-emempt muni bond funds and t-bills. Slow, dumb, boring - and safe.
  • Yeah, horseshit. Born with a silver spoon, get lots of jelly. Born without, you'll be in a jam. Nothing like living in a state where the average yearly income is boosted off the scale by billion-ars like JR Simplot et al. Take out the million-ars, and you have a state that ranks closer to Mississippi than New York. I can remember raising four kids below the poverty level. And MY old man had a government job! Needless to say, the only savings we have from the first 18 years of marriage are in a gallon Gallo jug full of pennies.
  • Eleven Ways to Make Really Big Money. Cramer's getting his on #4 and #8.
  • I'm amazed that Cramer hasn't been investigated already. Every time he hypes a stock that he casually mentions is in his "charitable trust," he's basically manipulating the market to his own benefit. He knows full well that as soon as he mentions a stock, all the day traders who hang on his every word are going to start buying it up, regardless of fundamentals or common sense. The sad part is, the little guy CAN make money in the stock market. Good money. However, you have to do exactly the opposite of what Cramer's touting. Ignore the big-cap names, and don't trade for a quick buck. You'll have better odds at the craps table, (and at least in Vegas they'll comp you a free room if you drop a few grand. Try getting that from your stockbroker.) The key is to look for small-cap names that are generally ignored by the street, do a LOT of careful research, and be patient. It works. Just ask Warren Buffet.
  • I agree with you jaypro22, what you suggest does work. It is a lot of hard analytical slogging though and I'm too lazy so I use the other method which is to buy when markets or particular stocks get hit with a "blood in the streets" episode. This is less work analytically but more work emotionally.
  • *shorts MonkeyFilter*
  • Finally, choreography that I can dance and a guitar solo that I can play!
  • Watching that video was also hard work emotionally.