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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.


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Trading With the Enemy – Using Media to Pump Up Stocks?

I saw an interesting article (technically it’s a book review) on Forbes.com written by Robert Lenzner and Victoria Murphy and wanted to bring it to you folks to see what you thought. It was written three years ago but the book is interesting and the darkness it sheds light on is intriguing.

Basically they reviewed Trading With the Enemy: Seduction and Betrayal on Jim Cramer’s Wall Street by Nicholas Maier, a former employee of Cramer & Company. The book alleges that James Cramer used his own TV appearances and CNBC anchors to pump up stocks that his hedge fund would then dump, taking the gains the security made after the media attention. Maier says that Maria Bartiromo and David Faber were the two unwitting anchors who Cramer used in the scheme and they were eager to break stories, to no fault of their own because they’re reporting news, so the sham was easy to set-up.

A quote from Maier after Cramer went on TV to promote a great long-term investment: “Our real strategy, however, was all about taking profits now. Back at the office, we were supposed to dump stocks after a quick half-point gain. On TV, Jim would tout a stock we owned, but if it moved up, we would sell.” The book keeps on going with other schemes and plots used by Cramer & Co. I mean things like after-market orders on the hot 90s IPOs so they’d stay hot the next day were commonplace according to Maier. Since then, three pages from the book were removed, they accused Cramer of using insider information, and it was republished.

My own take? I’m sure these backroom type deals happen all the time just like I’m sure insider trading on tiny scales happens too. That’s just the nature of the markets and everyone will try to get an edge wherever they can. The SEC just needs to be diligent and make sure the egregious offences are taken care of. If I find this book in a library I’m going to pick it up but I doubt it’s worth buying a book on speculation and unsubstantiated accusations.

Any thoughts?


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