Flamboyance wins 'Mad Money' host fans; professionals pay him no

0 Comments | Oakland Tribune, Oct 1, 2005 | by Francine Brevetti - STAFF WTRITER

BOOYAH! BOOYAH! Oink. Oink. Now let's smash the keyboard against the desk. Pigs! And this is the way we build our portfolios.

Stock picking guru Jim Cramer of the CNBC show “Mad Money” twirls, whirls, sweats, grunts, gesticulates, admonishes, wheedles and expounds and, yes, even abuses keyboards in mock anger. His voice skips from a warble to a rumble and back again.

In between such bouts of lunacy, he also instructs.

Maybe viewers tune in to Cramer's show for the entertainment. Maybe they watch to get hot stock tips. But if they're really listening, they will find advice about how to buy and, perhaps more important, when to sell.

Locally, Cramer's colleagues in the financial industry give him little credence.

Viewers who call in to the show love him to the extent that his recommendations can move stock prices.

Bloomberg News reported that Cramer's Sept. 19 "stock of the week" pick, Conexant Systems, rose 28 cents, or 17 percent, to $1.91 the next day on the Nasdaq Stock Market -- its biggest jump in 12 months.

During a recent show, Laurette from California calls up Cramer and asks, "How is my favorite guru?"

Cramer lowers his chin to his chest in an aw-shucks show of boyish abashment.

Monday through Friday, some 180,000 viewers in 167,000 U.S. homes are tuned to Mad Money, according to Nielsen Media Research, making the show the seventh-ranked on CNBC. Cramer took CNBC's lowest rated time slot, 6 p.m. eastern time, and made it one of its strongest.

He is a very effective educator, with one qualification: His hilarity and eruptive force, his utter refusal to sound grave and portentous, make it easy for his colleagues to dismiss him.

An informal survey of local financial advisers and independent stockbrokers found that he has almost no credibility among them despite the loyalty of his following.

Redwood City certified financial planner and CPA Lawrence Pon assailed Cramer's "big ego."

Didn't he help discover that planet we just found? He keeps yelling at the TV. I literally can't have him on for more than a minute," Pon said.

"My clients never mention him. They are more likely to talk about Suze Orman, whose advice is more tailored to clients' personal situation, or Bob Brinker, because they like his newsletter," Pon said, referring to other well-known financial advisers.

John McKee, CPA and CFP at Personal Portfolio in Redwood Shores, scoffed: "What he does is showmanship. I have never changed what I do based on him."

Cramer has heard it all before.

"When I started TheStreet.com nine years ago, people told me then that I was loud and in-your-face," he said, referring to the popular online Wall Street news site.

He shrugs it off.

"I had unbelievable credibility as a hedge fund manager (at Cramer Berkowitz), but who cares? If I'm obstreperous, funny, I'm bringing people in, not turning them off. My industry has been operating through mystification and confusion. Fie on us. I'm having a darn good time," Cramer said.

Asked how he feels when told that his recommendations move markets, he said: "It disturbs me that people are not doing their homework, that they are buying after hours and not using any discipline. 'Cramer just recommended this,' so they buy it.

"That hurts my record; they are wrecking the market. There's more money to be made if people just slow down and choose wisely," the stock expert said.

He says he wants to be known for -- in this order -- "entertaining, educating, making money and taking the sting out of those who say I'm just a clown. Most investment shows are really boring."

He does the entertaining part just fine. Sleeves rolled above his elbows, Cramer points into the camera, he waves his arms and shouts or croons instructions to his "home gamers."

He knows exactly which vaudevillian sound effects lever to push for best effect -- from the train wreck to the squawking barnyard noises. He may pulverize a solid object or two in the meantime.

Then there's his joyful exclamation, "Booyah," now a trademark of sorts. It's just his irrepressible enthusiasm.

And he does the educating bit well also, holding forth about diversifying, when to sell and when to determine the tops of a stock price.

"Buy and hold means sticking around for a train crash. Sell is a curse word on Wall Street. The most typical advice is to sell when the train has already left the station," he sputters and goes on to list six good reasons to time the selling of a stock, the first being the appearance of a competitor.

"You gotta be doing homework; watch the demographic trends, home gamers," he groans, nose into the camera. "Where there's an angle, we can cash in. Mortality -- do we think about the afterlife? No, we buy more life insurance. That's what we do!"

He is also concerned about the good of our souls: "You can't be a hog" is a pronouncement accompanied by mechanical sound effects -- "oink! oink!"

Does Cramer's personal style weaken his credibility? The answer would have to be yes. Especially with his competitors who may not listen as well as they might.