Costly Advice

I spend a lot of time harping on about the cluelessness of the "experts" who've consistently misled the public or completely missed the boat about the worst financial crisis since the Great Depression (which has been correctly anticipated at Financial Armageddon and in my book of the same name since early last year).

That isn't to say that I haven't made plenty of mistakes and bad calls through the years -- I have. But at least I've tried to learn from them and am aware that even after having been around the traps for a while, I still have plenty to learn. Indeed, when contacts ask me what I think about the stock market, for example, I often preface my response -- which is nothing more than an honest guess -- with the assertion that I could be wrong.

However, there are many others running around nowadays who seem to deny the reality of their own fallibility or who sputter self-serving or ignorant nonsense that can cost naive readers and listeners a bundle of money if the "advice" they are offering is taken at face value.

In fairness, some would say that those who act on the words of others without doing their own due diligence deserve what they get. However, I believe the mainstream media shares part of the blame because they do little to dissuade their audience from believing that those being quoted or referenced have been properly vetted.

More often than not, it seems, the "validation" process is something of a sham. What forms the basis of the designation as a recognized "expert" are self-reported "facts," corporate affiliations, academic "credentials," and --especially -- the ability to communicate well.

Unfortunately, that means at least some of those who get a lot of ink or airtime -- and attract the most consistent attention from those who are paid to report on what is going on -- don't necessarily reach that point because of the inherent value of what they have to say. Instead, they are providing entertainment or some kind of psychological assuagement.

Based on the following overview from Gawker, "Jim Cramer's Erratic Year," one can guess how I feel about the supposed credibility and near hero-worship afforded to one particular financial expert:

Jim Cramer has changed his mind! Just last week, you may recall, the shouty CNBC stock picker appeared close to tears as he begged Americans to pull all the cash they'd need for the next five years out of the crippled stock market. Well, whatever, that was last week. Now he says that we've already reached "the beginning of the end of the crisis." That sure was fast! This, of course, is in line with his (physical and intellectual) penchant for wild gesticulation. Let's take a brief look back at Mr. Cramer's unpredictable recent past, shall we?

• August, 2007: God damn Bernanke! Alan Greenspan! They have no idea how bad things are. No idea! (Wild rage).
• September, 2007: "The only thing I have is my authenticity."
• January, 2008: Cramer predicts Mike Bloomberg might buy the New York Times. Not yet!
• January, 2008: Cramer bet that financial stocks would outperform other sectors in 07. Lost bet.
• February, 2008: Barron's points out that Cramer's stock picks suck, factually speaking. Barron's reporters are banned from CNBC.
• March, 2008: Cramer nearly cries on TV because he was surprised Eliot Spitzer likes sex so much.
• March, 2008: Cramer tries to save Bear Stearns. Turns out he's not that influential.
• September, 2008: Jim Cramer was totally right in his initial crazy rant against Bernanke! Unfortunately he screamed so many things subsequently that everyone had forgotten about it by the time the markets crashed.
• October, 2008: But um, Cramer also recommended Wachovia stock as a "safe haven" for investors. That was very, very wrong.
• October, 2008: He got so upset he said f*ck it, just put all your money under the mattress!
• October, 2008: Okay, back to normal!

Comments

[Don]

I always enjoyed Cramer until the Bear Stearns fiasco. That's when I knew that he was up to no good, for the public at large.

Now I just watch, to see where he leads his bleeding flock.

[darkcloud]

thank God you posted this info. i saw cramer last night all hoyty toyty over the short sellers causing this mess and being put out of business. honest to God, is it me or does this man seem bipolar and inconsistent with taking his medicine?

what does it say that anyone who watches this man as a personal advice guru accepts him as credible and stable? the vix on him must be 110 percent.

thanks again for speaking out against this mad - by his own gimmick - "expert".

[Ray]

I never listen to Cramer. I've seen him countless times switch on his advice and even worse give bad advice! The sad thing is too may people follow him and get hurt because it. I've been following Trade With Pros over at www.tradewithpros.com and have been very happy. Even with the falling market/economy their picks have consistently outperformed all the markets.

The TWP advice is so much better. A lot of people are making good money based on their advice. Best of all they have nothing to hide, every month they post up their stats for all their options and stocks for low, medium and high risk picks.

[roger]

Cramer:"attracts the most consistent attention"
THAT IS HIS GAME and it works on the dummies! Lets face it Americans
love the clownish act,any body with with intellect discussing serious
matter with a serious attitude bores them.Anywhere you travel in this
world Americans are regarded as big children nice people but not fully
grown up.