Cramer's clairvoyant "Rant" 11 years ago

[marko]

Yes - he was ridiculed for maybe a year.

...until the rest of the financial community went "hmmmmm....".

 

[NYEXPAT]

I got out way too early! I remember seeing the writing on the wall in 2003 and made a decision to liquidate everything and move overseas. It was July 2004 before I was able sell my condo which was increasing in price monthly, in 3 years it had doubled in price! I ended up leaving about 100K on the table but I could sleep at night. I bought a condo in Peru in 2005-06 and when the financial crisis hit it tripled in value between 2009 and 2011. I still have it but it has not appreciated more in the last few years. Luckily,
I chose one of the few countries that was not affected as our INTL Debts were so low.

 

[Luvdogs]

Ha! He mentioned Washington Mutual. I thought I was getting a deal when I bought it at $10. It quickly plummeted and I bailed at $1.50 before it went belly-up.

 

[YVRRocketSurgery]

I originally found Cramer entertaining but got tired of his shtick. Part of it was due to the Jon Stewart critique of Cramer sticking with Bear while it headed towards 0. On the other hand, I also started getting tired of Jon Stewart's shtick too.

 

[marko]

I originally found Cramer entertaining but got tired of his shtick. Part of it was due to the Jon Stewart critique of Cramer sticking with Bear while it headed towards 0. On the other hand, I also started getting tired of Jon Stewart's shtick too.

Bear aside, if I was looking for insights into the stock market's inner workings, I think I'd lean toward Cramer more than Jon Stewart. Not quite sure what makes Stewart an expert.

 

[kcowan]

I originally found Cramer entertaining but got tired of his shtick.

Boo-yah!

 

[JoeWras]

The schtick is tiring yet I still turn him on occasionally. I don't like his fast talking mostly because I listen on the radio vs watching, and he is hard to understand.

That said, he recently has been reiterating very sound advice on a regular basis. He insists that people start with an index fund first, before individual stocks. The stocks stuff is "Mad Money" after all. He also reiterates that if you don't want to do a little homework on stocks, just stick with index funds.

Now, I wish my niece's nephew would have heard this. He just told me he's going to make it big with bitcoin. Great.

 

[YVRRocketSurgery]

Stewart is obviously not a financial expert but his critique was about the financial news industry, specifically CNBC, along with segments of Cramer, where the much of the coverage was many times overly optimistic when things were going downhill and thus misleading to the general public.
Nowadays, I view so much of this as just financial pr0n and noise but kind of fun to chat about.

 

[Running_Man]

Stewart is obviously not a financial expert but his critique was about the financial news industry, specifically CNBC, along with segments of Cramer, where the much of the coverage was many times overly optimistic when things were going downhill and thus misleading to the general public.
Nowadays, I view so much of this as just financial pr0n and noise but kind of fun to chat about.

Framing that one rant as Jim Cramer being prescient is ludicrous, this is a reframing of one day's Jim Cramer of what he actually believed as is the idea that CNBC somehow should know what is going to happen in the market and should be explaining that to it's viewers. Obviously Stewart also knows nothing of what CNBC was reporting, throughout the entire period, CNBC had people on that were optimistic and people on that were very pessimistic and the entire case and what would happen was laid out multiple times. People actively chose to ignore the negative calls. Cramer was saying Bear Stearns was a good stock throughout the banking debacle and said don't sell Bear Stearns the day before it went belly up. It eventually was sold for $10 which was 75% lower than the price on the day he stated it and later defended this (see second video) as "I was right when I said keep your money in Bear"

He pushed GE throughout the entire episode right up to 2017@ 22, when he finally admitted it was the worst investing mistake of his life and sold.

The overriding view was also home here, if you were negative in 2007 the overwhelming response was so negative- not to the market but to any poster that it was an unbelievable chorus of jeers from these boards. The top posters on this site in 2007 in August were posting that the banks were historically CHEAP and should be bought. One of my favorite posts of all times is when a poster here wrote in early October 2007 as the stock market was making a new high, about stocks, I only wish I had more money so I could invest more! The infamous WHEEEH!!!! thread To which I responded, "that is when tops are created, when people who want to buy have no more money to buy". That comment was heavily criticized and resulted in several public "you are now ignored" for your negative comments.

People do not want to admit any more that market go up and down, oh they'll state as much but if they actually go down, then public outcry is someone is to blame and should be imprisoned. In general the mantra of stocks go up in the long run, means the majority of people will invest in a diverse basket of stocks that should consistently go up in price to adequately fund the retirement of all investors in the market. Anything that impedes that should mean prison for someone......

 

[Running_Man]

Stewart is obviously not a financial expert but his critique was about the financial news industry, specifically CNBC, along with segments of Cramer, where the much of the coverage was many times overly optimistic when things were going downhill and thus misleading to the general public.
Nowadays, I view so much of this as just financial pr0n and noise but kind of fun to chat about.

Framing that one rant as Jim Cramer being prescient is ludicrous, this is a reframing of one day's Jim Cramer of what he actually believed as is the idea that CNBC somehow should know what is going to happen in the market and should be explaining that to it's viewers. Obviously Stewart also knows nothing of what CNBC was reporting, throughout the entire period, CNBC had people on that were optimistic and people on that were very pessimistic and the entire case and what would happen was laid out multiple times. People actively chose to ignore the negative calls. Cramer was saying Bear Stearns was fine throughout the debacle and said to hold Bear Stearns the day before it went belly up. It eventually was sold for $10 which was 75% lower than the price on the day he stated it and later defended this (see second video) as I was right when I said keep your money in Bear - implying he was talking about funds invested in other stocks and that he wasn't actually talking about Bear Stearns as an investment but as a Vanguard type institution, which he clearly was not and the question was actually about the stock, not to mention that he clearly did not know as is implied in the 2007 video what the hell was going on

He pushed GE throughout the entire episode right up to 2017@ 22, when he finally admitted it was the worst investing mistake of his life and sold.

The overriding view was also home here, if you were negative in 2007 the overwhelming response was so negative to any poster that it was an unbelievable chorus of jeer from posters. The top posters on this site in 2007 in August were posting that the banks were historically CHEAP and should be bought. One of my favorite posts of all times is when a poster here wrote in early October 2007 as the stock market was making a new high, about stocks, I only wish I had more money so I could invest more! The infamous WHEEEH!!!! thread To which I responded, "that is when tops are created, when people who want to buy have no more money to buy". That comment was heavily criticized and resulted in several public "you are now ignored" for your negative comments.

People do not want to admit any more that market go up and down, oh they'll state as much but if they actually go down, then public outcry is someone is to blame and should be imprisoned. In general the mantra of stocks go up in the long run, means the majority of people will invest in a diverse basket of stocks that should consistently go up in price to adequately fund the retirement of all investors in the market.

 

[bobandsherry]

Several years ago, Cramer pushed hard on WFC, many times recommending them over JPM. Well we see how well that's played out. When oil took a dip several years back he continued to voice that the drop was poised to recover in a traditional V, highly recommending SLB as a buy. Then as that didn't happen he said it would be a U, well it's been a U in the making over several years. SLB continued to drop and now only getting back to levels when he recommended buying. As i tracked his progress I found he was no better than just random buy and sell plays.

 

[aja8888]

Several years ago, Cramer pushed hard on WFC, many times recommending them over JPM. Well we see how well that's played out. When oil took a dip several years back he continued to voice that the drop was poised to recover in a traditional V, highly recommending SLB as a buy. Then as that didn't happen he said it would be a U, well it's been a U in the making over several years. SLB continued to drop and now only getting back to levels when he recommended buying. As i tracked his progress I found he was no better than just random buy and sell plays.

WFC's internal problem with illegal activities (account manipulation, insurance fraud, etc) was not known outside of the company. Even Buffet was fooled.

 

[audreyh1]

Framing that one rant as Jim Cramer being prescient is ludicrous,...

What was prescient was his assertion that the Fed was blind to what was going on.

Too bad that he didn’t also understand that Bear Stearns was in deep doodoo instead of taking their CEOs claims to the contrary.

 

[Running_Man]

What was prescient was his assertion that the Fed was blind to what was going on.

Too bad that he didn’t also understand that Bear Stearns was in deep doodoo instead of taking their CEOs claims to the contrary.

Shortly after his assertion, a Bear Stearns fund went belly up and they declared a loss for the first time in their history. What Cramer was attempting to do was get the FED to cut rates for the benefit of his friends so they could get out of their synthetic bond positions and create a market for them. People were just begin to realize there was no actual value, Cramer was attempting to get the FED to keep that information from being realized. He had no idea of what the impact of the actual positions they were holding would do if marked to actual worth, if Cramer had his way subprime loans would have been further manipulated to maintain their worth. In what way would that have been helpful?

 

[marko]

What was prescient was his assertion that the Fed was blind to what was going on.

Too bad that he didn’t also understand that Bear Stearns was in deep doodoo instead of taking their CEOs claims to the contrary.

Perhaps the whole mess was so, so complex that few could've predicted everything of what was to come next.
Those few that did kept quiet and worked the situation to their advantage.

I'm generally a fan of Cramer. He's helped me make (and avoid losing) money over the years. I don't follow him completely as he leans toward trading vs investing but I find his 5 minute monologues enlightening many nights.

 

[kcowan]

What has to say say can be helpful as long as you have an IPS and a clear understanding of what you want. If you are a trader, then his is a high risk input.

 

[haha]

Framing that one rant as Jim Cramer being prescient is ludicrous, this is a reframing of one day's Jim Cramer of what he actually believed as is the idea that CNBC somehow should know what is going to happen in the market and should be explaining that to it's viewers. Obviously Stewart also knows nothing of what CNBC was reporting, throughout the entire period, CNBC had people on that were optimistic and people on that were very pessimistic and the entire case and what would happen was laid out multiple times. People actively chose to ignore the negative calls. Cramer was saying Bear Stearns was a good stock throughout the banking debacle and said don't sell Bear Stearns the day before it went belly up. It eventually was sold for $10 which was 75% lower than the price on the day he stated it and later defended this (see second video) as "I was right when I said keep your money in Bear"

He pushed GE throughout the entire episode right up to 2017@ 22, when he finally admitted it was the worst investing mistake of his life and sold.

The overriding view was also home here, if you were negative in 2007 the overwhelming response was so negative- not to the market but to any poster that it was an unbelievable chorus of jeers from these boards. The top posters on this site in 2007 in August were posting that the banks were historically CHEAP and should be bought. One of my favorite posts of all times is when a poster here wrote in early October 2007 as the stock market was making a new high, about stocks, I only wish I had more money so I could invest more! The infamous WHEEEH!!!! thread To which I responded, "that is when tops are created, when people who want to buy have no more money to buy". That comment was heavily criticized and resulted in several public "you are now ignored" for your negative comments.

People do not want to admit any more that market go up and down, oh they'll state as much but if they actually go down, then public outcry is someone is to blame and should be imprisoned. In general the mantra of stocks go up in the long run, means the majority of people will invest in a diverse basket of stocks that should consistently go up in price to adequately fund the retirement of all investors in the market. Anything that impedes that should mean prison for someone......

This also is how I remember the boards prior to the meltdown. I think it is the same today. When stocks are historically overvalued-for a simple metric, price to sales- people will usually get on the bandwagon. "Stay the course, how will you know wqen to get back in, etc." Even when it is obvious that things are very optimistically valued, it is hard to face taxes and other costs of selling out. And, one is never sure what will happen. Equity and bond markets have been overvalued for a long time now. When you sell you may feel stupid, at least for a while.

Ha

 

[Dawg52]

This also is how I remember the boards prior to the meltdown. I think it is the same today. When stocks are historically overvalued-for a simple metric, price to sales- people will usually get on the bandwagon. "Stay the course, how will you know wqen to get back in, etc." Even when it is obvious that things are very optimistically valued, it is hard to face taxes and other costs of selling out. And, one is never sure what will happen. Equity and bond markets have been overvalued for a long time now. When you sell you may feel stupid, at least for a while.

Ha

You have posted this before. Are you doing anything different this time? Selling and paying taxes?

 

[Markola]

Of course, Cramer’s rant makes us all want to know the answer to “Where in the cycle are we NOW?”

 

[deserat]

My indication that something was wrong was way before that. I had come home from Germany in 2004-5 to CA and was told by my neighbors they had sold their house and bought another one in the next neighborhood over for ~$500K. They had sold their house for ~$300K. He was in construction and she worked in a clinic office of some sort. They did not make large amounts of money. I then decided to refi my house to a ten year loan. The mortgage brokers were falling all over themselves to get me that loan. The notarist came to my house (?) to sign the refit paperwork. First question she asked was how much I was taking out for cash. I said 'Huh?' She said many people took the equity out and bought vacations and cars....I said why would I buy a depreciating asset with a loan on an appreciating asset? I then asked her how many ten year loans she had signed that year....one...mine. I asked how many 15 year loans she had signed...three.

Flash forward to 2007-2008 - I'm on a train and talking with a fellow commuter. She was going through a foreclosure on her house. She had bought a low rate to balloon type mortgage. Essentially, she should not have been given a loan to purchase a house. At the same time, I put my house on the market. We met with the agent and figured out the peak had been reached and the prices were starting to fall. We priced the house along that negative slope and sold it in a week. One year later the house was worth $100K less...about what I had bought it for 8 years earlier.

I remember thinking my neighbor was crazy...but it was CA, and people are crazy especially about real estate. Nevertheless, I realized that loans were being given out willy nilly and that the 0 down, low interest rate and balloon in 3-5 years was not a good idea unless you were *very* disciplined.

Luckily, by that time I had the LBYM habits and was "long on tuna fish and toilet paper" and tried my best to have no debt, even my mortgage. It is amazing how when you train your mind to think that way, you don't even venture into the crazy stuff....and you wonder how people do manage to live like my neighbors and that fellow train commuter. Mindset is such a huge part of this FIRE goal.

 

[NW-Bound]

Of course, Cramer’s rant makes us all want to know the answer to “Where in the cycle are we NOW?”

The market is high now, and will go higher until it crashes.

Bear Stearns' trouble was leaking out to the media in mid 2007 or earlier, but the market kept on rising until early Oct 2007. My own portfolio peaked out in late Oct 2007. So, I thought these were bankers' and houseflippers' trouble, and would not affect me and my stocks.

My indication that something was wrong was way before that...

I knew it was wrong, very wrong. I wished I had kept a copy of a Money Magazine issue (I had some frequent miles that were expiring, and had to exchange them for magazines), which featured a woman in an article as a heroine. She bought homes to flip, and was owning a dozen homes or so and was in the process of closing on more. It looked like the banks required little collateral to approve the loan. It was insane.

An article on Wall St at that time on the housing bubble opened with this statement "It will end in tears".

Again, I never thought it would affect me and my "innocent" stocks. I owned no bank stocks, nor home builder stocks. But I had plenty of raw material stocks. Good thing I unloaded most of them in late 2008, or I would get hurt even worse. Only lost 37% of my stash.

 

[njhowie]

Flash forward to 2007-2008 - I'm on a train and talking with a fellow commuter. She was going through a foreclosure on her house. She had bought a low rate to balloon type mortgage. Essentially, she should not have been given a loan to purchase a house. At the same time, I put my house on the market. We met with the agent and figured out the peak had been reached and the prices were starting to fall. We priced the house along that negative slope and sold it in a week. One year later the house was worth $100K less...about what I had bought it for 8 years earlier.

And today the house is worth $500k more.

 

[haha]

You have posted this before. Are you doing anything different this time? Selling and paying taxes?

I have a few mlps, and to sell these is to really pay tax, including some ordinary income tax.I am hoping for some sort of tax favored takeout, but at this time I am not sure what that might be. If this doesn't happen I will have these in my estate unless laws or the businesses change markedly. On the plus side, the quarterly payouts are pretty good. I am selling some other issues as they become long term. But overall, I hate to sell stable companies that I have held for a long time and pay even the long term capital gains tax on fairly big gains, though nothing like Apple or Amazon. I do intend to figure as closely as I can what my tax might be on these sales under the new law.

Ha

 

[ownyourfuture]

No disrepect to the OP, but I lost all respect for that idiot when I saw him suggesting shoppers go to best buy, pump the salespeople for information on whatever product they were interested in, then order it on amazon.

!@#$ him & all those who would be low enough to do something like that.

*Not a Best Buy employee & hold no shares*

 

[Another Reader]

No disrepect to the OP, but I lost all respect for that idiot when I saw him suggesting shoppers go to best buy, pump the salespeople for information on whatever product they were interested in, then order it on amazon.

!@#$ him & all those who would be low enough to do something like that.

*Not a Best Buy employee & hold no shares*

The funny thing is that the product at Best Buy is likely to be the newest version and less expensive. Amazon is likely to have an old version and charge more. I buy very little at Amazon because I can do better at other places.