Investing, Reviews 
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Trading With the Enemy

Trading With the EnemyTrading With The Enemy: Seduction and Betrayal on Jim Cramer’s Wall Street, written by Nicholas Maier, relives Nick’s experience working for Jim Cramer at his hedge fund, Cramer & Company, from 1994 to 1998. I picked up the book because it details the inner workings of Jim Cramer’s hedge fund and I always enjoy these “inside look” type books and this one did not disappoint. If you’re familiar with Jim Cramer or his hot show Mad Money, you’ll know that he always seems to be a madman on television. The intensity he shows on that show is a mere fraction of how intense he can get when real money is on the line and you never see the mean streak on television. In the book, Jim throws monitors, screams at brokers, and basically is insane while managing hundreds of millions of dollars and managing it quite well. Don’t screw up because you’ll might not even live to regret it.

The book will reveal a lot of insights on the inner workings of Wall Street (Cramer & Company pay six cents a share traded, way more than a private investor, but there is a reason for that – “you get what you pay for”), what it takes to be a power player in the markets, and why Jim Cramer acts the way he does. It’s really an eye opening learning experience, to be perfectly honest, because it’s amazing how much information is passed around before they hit “official news.”

How much of it is embellished? I have no idea, it was published in 2002 before Mad Money premiered but after Jim Cramer made a huge name for himself, and the author acknowledges that many are reading it just to learn about Jim Cramer. I bet some of it is since he quotes things from memory, so take that with a James Frey grain of salt, maybe a little smaller grain though. Still, a fun read if you have a lazy Sunday afternoon free.

Amazon doesn’t have any more copies but they do have a summary and some reviews available, your best bet is to try to find it in your local library.


 Investing, Personal Finance 
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Jim Cramer’s 25 Rules of Investing (Rules 21 – 25)

This is the home stretch, the final five rules of investing are here for your general consumption. If you’re interested and haven’t read reviews on Jim Cramer’s “new” book “Real Money: Sane Investing in an Insane World,” be sure to check out some of the reviews to see if this book is for you. While the past few articles and this one are summaries of these rules, the book goes into greater detail and may be worth checking out. Now… onto the final five rules:


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 Investing, Personal Finance 
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Jim Cramer’s 25 Rules of Investing (Rules 16 – 20)

This is part four of five on alleged “25 rules of investing” that Jim Cramer has listed on his site, TheStreet.com, plus my own commentary. The first five were basically cute little catch phrases on some common-sense rules. Rules six through ten were a little more insightful, speaking to more subtle ideas such as not buying a crappy stock because you think it’ll be acquired (because it probably won’t). The early to mid-teens touched on some rules for the more experienced investor or someone who just needs a little prodding to ensure they’re looking at everything objectively. Let’s see what the next five yield…


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 Investing, Personal Finance 
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Jim Cramer’s 25 Rules of Investing (Rules 11 – 15)

This is part three of five on alleged “25 rules of investing” that Jim Cramer has listed on his site, TheStreet.com, plus my own commentary. The first five were basically cute little catch phrases on some common-sense rules. Rules six through ten were a little more insightful, speaking to more subtle ideas such as not buying a crappy stock because you think it’ll be acquired (because it probably won’t). Well, let’s take a look at the next five…


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 Investing, Personal Finance 
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Jim Cramer’s 25 Rules of Investing (Rules 6 – 10)

I started this look at Jim Cramer’s 25 Rules of Investing with the first five rules a little while back. The first five didn’t bring anything new to the table but did remind me of some good adages to remember. Let’s check out the next five rules, rules 5 – 10, and see if they will yield more enlightening investment advice.


(Click to continue reading…)


 Investing 
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Jim Cramer’s Mad Money – Lightning Round Legit?

If you’ve seen Mad Money, you know he has a lightning round where he just takes a ton of phone calls where it’s basically a free for all where he gives his buy/hold/sell advice (with brief reasoning and alternatives if he hates the stock) on the ticker. How is he doing it? They screen the calls of course so his screen probably pops up with some summary information but is he getting some “extra” help on those screens? It can’t be possible that he comes up with advice on fly does it? Let’s think about it a little bit…

I think he’s legit and here are the reasons why:
1) Sometimes he blows people off with basically no info (“I can’t say anything bad about…”). So you figure he doesn’t know about Company XYZ, he’ll figure out some clever and witty phrase and blow you off.
2) A lot of the advice he does give on some obscure stock is sector advice. He’s hot on energy but not on coal. Bring some obscure coal company, as someone did tonight, and he’ll tell you that coal sucks and sell the stock.
3) Always advises profit-taking, “ringing the register” if you will, regardless of the company. A woman mentioned a stock that had gained like 24% and he told her to take the cash! Who cares what the company does… take the cash!
4) When he does know the company, he gives legit advice.
5) He does pause from time to time, maybe a fraction of a second, and “appears” to think. I don’t see him faking thinking… seriously… why would he?
6) He talks quickly and does try to get as many calls as possible. If he was BSing, he’d probably waffle a little, kill some time, etc.

Remember, like every other pundit and every other show about stocks, you have to do your homework. So far, Cramer looks legit and I enjoy watching his show. It’s entertainment after all right?

Anyone ever call in and get on the air? I think the probability is low you called and happen to read my blog but if you did, please please please leave a comment! :)

Update: The other day, Jim Cramer commented on a company before a caller mentioned the company name. (5/4/05)


 Investing 
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Jim Cramer’s 25 Rules of Investing (First Five Rules)

Okay, first I watched Jim Cramer’s Mad Money show (and let you all know what I thought), which led me following his column on TheStreet.com about his 25 Rules of Investing. He has a new book too called Real Money: Sane Investing in an Insane World and as a bonus to readers he’s listing 25 rules on the site. I like his hard hitting, no BS attitude and I’ll give you my summary and impression of his self-proclaimed twenty five rules. Can 25 rules really capture every rule of investing? No, definitely not. But I want to read what this dude has to say…

Rule 1 – Pigs Get Slaughtered
How can you not like that title? This quote summarizes the entire rule: “Bulls make money, bears make money, pigs get slaughtered.” When the market goes up, people make money. When the market goes down, people make money. It’s when people get greedy that they get slaughtered. Making money is good but don’t get so greedy that you’re holding the bag when the bubble bursts.

Rule 2 – It’s OK to Pay the Taxes
This is a great, short post, about how you shouldn’t hold onto a stock just because you don’t want to pay short term capital gains. Some stocks are meant to be held short term and you buy them on that notion. “… no taxes are due when you sell at a loss.”

Rule 3 – Don’t Buy All at Once
Jim Cramer supports a concept known as “dollar-cost averaging” which has recently come under fire from various sources. This is one of those long debated concepts of buying over time and I don’t know what is right, honestly. If the stock goes down, you average out your price to get the lowest than if you had blown it all in one shot. If it goes up, you could’ve made more by purchasing it in one fell swoop. Cramer says it’s the way to go and honestly, there is probably not right answer. (like the little loophole I left myself in case someone does a mathematical analysis proving dollar cost averaging’s correct)

Rule 4 – Buy Damaged Stocks, Not Damaged Companies
Ever see someone readjust (ie. lower) profit expectations for the year or missing analyst estimates for a prior quarter and see their stock hammered? That’s a damaged stock. An accounting scandal cause the damage? That’s a damaged company. Take advantage of the overreaction, that’s what this rule means. I’m a huge fan of this rule and if you’ve seen Merck or Pfizer lately, you’d be a huge fan too if you were able to take advantage.

Rule 5 – Diversify to Control Risk
“If you control the downside, the upside will take care of itself.” Diversify across different sectors to manage risk. Don’t put all your eggs in one basket. This rule everyone pretty much understands.

Well that’s the first five. As of right now, 18 of the 25 rules have been written so you can check them out if you want to by visiting this page. Thus far nothing incredibly ground-breaking in terms of rules, nothing you probably haven’t heard before, but you probably got a kick, as I did, out of how he said it. Pigs get slaughtered is a great way to say “don’t be greedy,” don’t you agree? Disagree with some of these rules or how I feel about them? Let me know.

For the next five rules, read this article.


 Investing 
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Jim Cramer’s Mad Money

I watched Jim Cramer’s Mad Money (on CNBC) tonight because I have heard the buzz (especially around his new book, Real Money: Sane Investing in an Insane World) and I’ve seen this guy’s ad on Yahoo! Finance more times than I can count. I have to say I might watch this guy more often because he gets to the point, gets to it quickly, and doesn’t waste my time. He also won’t let guests get away with spinning some crap and he’ll confront them, something I really appreciate.

One example of how bold he is when he talked to the CEO of Skyworks Solutions. He asked specifically for the CEO to address the rumors that Motorola had been canceling orders from them. It looked like the CEO was waffling a little, avoiding the question, telling Cramer the positives and all that crap… Cramer nodded and what not. Then, Cramer didn’t let him off the hook and asked him the question again. Then they discussed the balance sheet and Cramer thanked the CEO for appearing. He then gave a recommendation as follows: he’d take a little bit and keep an eye on it because when it did go up, it’d go like a spring. But, it wouldn’t do anything for three months. Not a glowing reco for someone who just appeared on his show, that’s good. It adds a little credibility at least in my mind.

I like the apparent honesty and how this guy doesn’t waffle. He says that he likes a company or he doesn’t, he says what he’d do… he doesn’t mess around. His straight up attitude is something I appreciate and I’ll be checking out this program more often. If nothing else, he’ll shed some light on some companies and industries I hadn’t even thought about… and that’s a good thing.

Updated: After watching the show more, and still enjoying it, I was getting skeptical of the lightning round … so I thought about it. Read the post titled Jim Cramer’s Mad Money – Lightning Round Legit? and let me know what YOU think.

And incidentally, to clear up any confusion… I am not Jim Cramer.

If you’re interested in some other of my Jim Cramer related articles, click here.

Other Jim Cramer Books:

Confessions of a Street Addict
Confessions of a Street Addict ($17.16, Hardcover)
You Got Screwed! Why Wall Street Tanked and How You Can Prosper
You Got Screwed! Why Wall Street Tanked and How You Can Prosper ($13.60)
Jim Cramers Real Money: Sane Investing in an Insane World
Jim Cramer’s Real Money: Sane Investing in an Insane World ($17.16)

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