From the Jim Cramer Mad Money Wikipedia entry:
“The majority of the hour features the flamboyant, colorful Cramer shouting, leaping, and gesticulating around the set and at the camera, all while providing his viewers with investment advice. Arguably, this format skews the show more towards being entertainment rather than a source of financial information. Many financial professionals attest to Cramer’s skill at picking stocks and explaining principles of sound investment; the individual investors who call into the show also seem to hold Cramer’s advice in high regard. Cramer himself says that the goal of his show is to entertain the viewer and provide the viewer with good, sound investment advice. Cramer is usually standing up with the fisheye lens Steadicam close to his face, zooming in and out, all the while providing his stock picks and his reasoning (with his voice inflection known to suddenly change from calm to shouting). Cramer also throws various objects on the set (papers, pencils, etc.) and even smashed up a model plane when explaining his thoughts on Boeing stock; on another episode he used a telephone receiver to destroy a computer keyboard.”
I know some very smart people who refuse to say anything untoward about Cramer’s show. They always say it is just entertainment and never get close to any criticism. But is it just entertainment? Do people really just watch because it is fun and wacky? I maintain people watch because at the root of the show they feel they are getting some investment value from it. The show’s comedy works because it is assumed the underlying foundation of the investing advice offered is sound. Is it? The basic premise of the show is “stock tips work”. Do stock tips work? Would this show have excelled in 1999? You bet. Would this show have excelled in late 2000? I don’t think so. What does that say about the audience mindset giving Cramer such great ratings?
I wish Cramer all the success, but I just have an odd feeling about so many new people adopting bad habits in their understanding of the markets and trading.