Jim Cramer Sputters On The Daily Show

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The entire Jim Cramer interview with Jon Stewart last night are now up on TheDailyShow.com. It’s split up into a few parts, here is the first one:

It was kind of fun to see Cramer squirm a little bit (deny everything!), but I think most experienced investors would find very little surprising out of it. Making fun of CNBC and Cramer is like shooting fish in a barrel. Cramer should have known they would dig up this video of him mocking the SEC. I’m surprised he showed up at all. He definitely took one for the CNBC team.

Even Stewart admits Cramer isn’t the real problem, which is that the purpose of 99% of the financial industry is not to make you rich. It’s too extract money from you, while you think they might make you rich. From brokers to hedge funds to bloated 401(k) plans. Cramer was worth millions before starting Mad Money, guess where that money came from? And CNBC is part of that machine. Hopefully more people realized it after tonight.

CNBC is financial porn. It’s air-brushed to look better than reality, and is scripted for your entertainment. Do people really want to watch responsible reporting on CNBC? Invest in index funds. Don’t trade too much. Don’t look at the Dow ticker every five minutes. I’m not so sure that would sell. Still, will TDS kill Mad Money like they nuked Crossfire? That would be impressive.

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  1. Mr Plasectomy says

    I am surprised he had the cohunes to even show up, that is impressive given he had to have know he would be eaten alive. I tried to watch his show a couple years ago, it was entertaining, but I didn’t enjoy being yelled at.

    His time has to be up. You can’t take this kind of ridicule in the media about financial matters, have proof in video of things you said and come out ok given the global economy.

  2. If you watch part 2 you’ll hear this exchange…

    Stewart – “Look, we’re both snake oil salesman to a certain extent.”
    Cramer – “I’m not disagreeing.”
    Stewart – “Though we do label the show as snake oil here.”

    I think Cramer just showed his hand there. He knows picking stocks is like throwing darts. He’s just doing it anyway to make money.

  3. Mat – In fact, Stewart points out that Cramer knows this better than any of us!

  4. Comedy Central is going to post additional minutes from the interview online today; it ran something like 8 minutes over.

  5. I haven’t watched the daily show (or much tv for that matter) in a while. But that stuff was comedic gold! Thanks for posting it…

  6. As they say in show biz, there is no such thing as bad publicity… Michael Jackson had his concerts in London sold out in little over four hours Friday… remember his press? Jon gave him a challenge to rise above his bells and whistles and be better than that ‘Fast Money’ guy persona. Cramer said he’d try. Cramer is laughing all the way to the bank… his show received more national publicity during this past week than ever and you can bet CNBC is going to take this to the bank. Cramer had guest spots all over TV this week… Today, Martha Stewart… yeah, I am sure

  7. I thought Cramer handled himself fairly well, actually. I’m not a fan of his, but at least he showed up and I thought handled the questions decently.

    To say that all of CNBC is financial porn is stupid. There are documentaries that are excellent and informative. There are many networks/cable channels that I would say more resemble porn than CNBC.

  8. hedge funds do make money u know, serious money at that (clients and themselves), and considering index performance of the last decade, dart throwing wouldnt have been much worse.

  9. That was Stewart at this best!! I am glad somebody is taking these networks to task. Watching CNBC/CNN has become torture,they just have pretty bobble heads talking all kinds on nonsense, and I am sure when they watch it themselves they probably giggle.

    These newshows have taken journalism to new lows…the argument that they have to do news 18 hrs a day–to that I quote Stewart “maybe you should cut it down’. I would much rather have these so-called “news show” show us infomercials that the junk that they shows on a hourly basis.

  10. Christine says

    That was the most beautiful piece of television I’ve ever seen. Stewart just might be the most articulate man people are listening to today. I respect Cramer more now if for no other reason than he was willing to participate in the discussion.

  11. Eh, whatever all around. Cramer made some mistakes. He’s bound to and certianly wasn’t alone on this one. Stewart’s really being a bit of a dick about the whole thing though. I don’t think he said a single thing during this segment that was becoming of a show host. Stewart can be very funny but this wasn’t his best moment either. I’m sure if his job entailed more than making fun of everyone and had to come up with his own ideas he might not be so quick to throw stones.

    As for CNBC as financial porn – it is a bit. But the market doesn’t exist in a vacuum. Discussing politics, economies, taxes, earnings, etc needs to be done. Can you actually imagine a world without these networks where 60 trillian dollars is just in index funds? And what would determine the prices of the underlying stocks?

    I think people need to accept both networks/programs for what they are.

  12. OH geez. This is pathetic. Cramer is great. He fun to watch, energetic, has sound fundamentals on stop losses, setting goals, investing in his books. His show is E N T E R T A I N M E N T. Period.

    Cramer is right about buy and hold. That’s for lazy morons.

  13. It’s funny TV, but I still enjoy Cramers books and TV show. He’s always been very bullish just like some people are always positive. You need to keep in mind his background as a hedge fund manager. Many of the funds including mutual funds have charters that require 90% of the assets to be invested in stocks at any given moment. So they do have to keep picking stocks, Cramers tactic is to diversify across 4-5 different sectors the invest in the top 1-2 strongest leaders in those sectors. Then keep some money looking for the home runs. That is what he’s doing in the “Lighting Round”. People call in with a stock and he gives his opinion of that stocks strength in it’s sector or if the sector as a whole is to be avoided. All of this is opinion of course, no one know the future.

  14. “Invest in index funds. Don’t trade too much. Don’t look at the Dow ticker every five minutes. ”

    If people weren’t making money “trading too much” and “looking at the Dow ticker every five minutes” then people wouldn’t do it. If your tolerance for risk is low and you don’t have the resources to “trade too much” then don’t do those things. There are more ways than 1 to make and lose money in the stock market and neither way is more right than the other…just different.

    That being said. I’m definitely not a person that trades daily or looks at the market every 5 minutes by any means (I have a day job). I just don’t like to knock what others are doing just because I don’t do it their way. As long as what they do is legal and works for them, let them have at it.

  15. You must remember, Cramer has been on the show before. He knew exacly what he was doing. It’s more of confession for him. Now he can say he is being honest and coming clean…

  16. I feel that Cramer did a lousy job and looked extremely weak on the show. I’m sorry but Rick Santelli had a very good point, now I’m not saying to blame the innocent, ignorant people that got snickered into buying a home they could not afford and put in an ARM but I would bet that is a small percentage of the population affected. When you go to buy a home you know whether or not you can afford it. Who doesn’t ask questions when signing 50 pages of your life away, how bout blaming the Clinton administration for forcing homeownership on everyone. If I were Cramer I would have defended myself and my show, I mean really, stock picking is half due diligence and half luck. It is gambling on a more sophisticated level. If I were Cramer I would have pointed out all the other intilligent investors that made mistakes, Warren Buffet lost how much? If stock picking were easy and there was not a certain degree of luck then everyone that can read a balance sheet would be rich! The market is a constant moving, evolving, multiple moving part machine with a lot of variables affecting it. Anyone who buys or sells based on a TV show should not be using their serious long term savings money for this. Like Cramer said, a serious show would not get much viewership, I guess that’s why Louis Rukeyser was on public tv. I miss the Rukeyser show.

  17. Hi Jonathan, as a long-time reader I’ve noticed your blog getting increasingly political these days, and I’ve increasingly started to tune out. Perhaps your blog is more political because finance in general has become so politically charged these days.

    Anyway, I read your blog because I want unique ideas on how to save and invest money. If I wanted to hear about the Jon Stewart vs. Jim Cramer stupidity I’d turn on cable news or any of the other zillion political blogs. Clearly, you can do whatever you want with your blog, but I just thought I’d speak out as a reader (i.e., customer) that you are potentially losing.

  18. Banditfist says

    Would still love to see Santelli get on to defend himself. Rick tells the truth and is the complete opposite of the cheerleaders/mouthbreathers on the rest of the shows. Stewart is missing the whole point of what Rick was talking about. It is about the moral hazard of bailing out those people who got in over their heads. Why should the rest of us not get a reduced mortgage? Why is it that someone has to be late on their payments facing foreclosure before they get help? You help those people out, then why doesn’t EVERYONE just stop paying their mortgage so they can get help too? That is the moral hazard that Rick is talking about.

    Carmer does whatever he can to get his shows ratings up. He is smart in that regard. He is for entertainment, not advice.

  19. I have to agree with Christine. Stewart was surprisingly articulate and did a fine job of application when he mentioned his mother’s retirement. Cramer was completely the opposite being inarticulate and void of perspective. He kept repeating over and over that he would “try.” I would have expected more from someone who graduated magna cum laude from Harvard.

  20. Stewart owned CNBC more that Cramer, unfortunately for Jim he became the front man for CNBC over the course of the week. Cramer was the only person on CNBC I saw warning the Fed of the potential storm that was coming back in 07, and had you listened to him in October when he was the only one to tell people to pull any money out of the market if they need it in the next 5 years you would have saved yourself 25%.

    The bottom line is Cramer consistently tells viewers and readers of his book that you should not own stocks if you can’t spend an hour a week researching the stocks you are going to own. He also consistently mans up and admits when he has suggested a stock that went the wrong way.

    Cramer should and could have done a much better job defending himself, such as when Jon mentioned his Mother had been duped into believing buy and hold was the best strategy. Read “Real Money” and Cramer specifically tells you that you will never beat the market following the buy and hold strategy.

  21. Unfortunately, the ‘moral hazard’ argument for homeowners doesn’t work well when you consider the large bailouts that Wall Street is getting–the same Wall Street firms who have far less excuses for not knowing better (if no one was buying these silly CDOs and private label mortgage backed securities, these shaky homeowners wouldn’t have qualified for a loan). It’s the cascade effect of rising foreclosure rates that impact ALL of us–so stemming foreclosures is truly the best option for ALL of us. To put it in simple terms, it might cost you $1,000 in taxes to pay for a bailout of homeowners (where it’s reasonably justified and supportable), but if you don’t, you could be looking at another $50,000 in lost equity on your home due a continued escalation of foreclosures. Which would you prefer? I don’t like it either, but the other option is worse.

  22. i don’t get why cnbc is being singled out, with all the other financial news channels on the air. cnbc is a “news” channel period. cnbc report news and does not giving investment advice. cnbc has guests on with varying opinions that do give investment advice. and its up to the viewers to proceed at their own risk. jon stewart obviously is part of the “loony left” from hollywood who knows nothing about economics or investing. and yes jim cramer was weak, anyone else would have torn stewart a new blowhole.

  23. Its funny to see everybody ganging up on Cramer now. Back in the Fall of 2007, he went on air (in a now famous rant about the ineptitude of Bernake and the FED) and pretty much foreshadowed that something very bad was about to happen to the Markets – which is exactly what happened.

    Fast forward to October 2008, the Dow has already dropped to 9500, and all financial media are proclaiming “now is the best time to buy stocks”. In fact, even Warren Buffet writes an article on how we should all be buying stocks at that time.

    Camer on the other hand, goes on air, and sticks his neck out, telling the public to take EVERYTHING out of the market [SELL EVERYTHING] (if there is any chance they might need the money in the next 5 years)….Fast forward to today and we see that the DOW is now just over 7000….Now remind me again why we are supposed to bashing Cramer?

  24. stewart is a big obama supporter, and cramer has been bashing obama, period. stewart originally went after rick santelli, but santelli blew him off.

  25. As far as just passively investing in index funds go this is the type of period where you can be screwed by doing that. If you’re invested in an index fund you are down close to 50% since Oct 2007 when the Dow was over 14,000. I am down much less than that in my portfolio where I invest in individual stocks of companies I understand and like. I have actively gotten out of things as well when I saw more downside. Second if you’re sitting in an index fund and down 50%, odds are you are not going to make that money back for years. The markets will rebound but the Dow getting back to 14,000 just isn’t possible for years given the trillions left that still need to be written off on corporate (mostly banks) balance sheets. However just like any market, many stocks will do better, many will do worse. This past week when the markets rallied about 10%, most of the more active followed stocks rose a lot more. If you were fortunate enough to buy the banks last week, you would have made between 50%-80% on those positions this week. The people that make back their losses and/or make a lot of money when the market rebounds will be those in individual stocks, not index funds. Index funds were created as a tool for the average joe who doesn’t know what to do. They cost next to nothing to run which is why even with low fees they are great money makers. I work on the buy-side, I know. And the beauty of them is they provide a constant stream of money to Wall Street that is predictable as to where it is going to go. People always ask me for stock tips/investment advice as well, I usually just say buy index funds. The reason people give you this advice is because its easy to give and everyone in the market knows that when you give people specific investment advice on stocks or strategies they will come crying if they lose money. Saying “invest in an index fund” is just a simple way to say, “you don’t know what you’re doing, and I’m not going to waste time trying to teach you and being blamed if you don’t make money”.

  26. Advn2rgirl says

    D’ja catch the part in the uncut interview in which Cramer says he voted for Obama? I really think your “Oh, he criticized the President!” conspiracy theory sort of stumbles there, buddy.

    I was amazed that he came on the show prepared to continue to lie. He said he hadn’t done what Stewart had him on tape saying it was fun and profitable to do. Why don’t these guys remember that everything you say in front of a television camera may come back to bite you one day?

    I almost felt bad for him, then I remembered that he brought this on himself.

  27. I have watched Cramer several times on tv. It should be obvious to anyone that he is an entertainer and should be ignored for his stock picks. He actually gives some decent advice once in a while on investing as a whole. His stock picks are lousy because he does very little or no research for the lightning round. That being said I think that Cramer took Stewart’s hits mostly in stride and should be commended for that. On the other hand, I am sick of the media as a whole. Some major network should post the video on http://www.crisisofcredit.com/ to inform people of what really happened. I think that video is somewhat biased (like most everythnig else) since it doesn’t mention some important aspects (ie. how the gov’t led by Clinton “made” banks give subprime loans). I also like how Stewart pointed out how there are 2 aspects of investing. One is having part ownership in a company and sharing in the profits (ie. getting dividends). The other is just one giant disgusting gamble (trading daily and shorting).

  28. WOW. That is a lot of squirming. I have never liked CNBC and Jim Cramer because they don’t focus on the economic truth. They focus on what people want to hear, which changes from day to day and overtime you can see how wrong they have been, time and time again. If you want to be completely broke, follow their investment advise.

    CNBC is much more about panding to their advertizers and the latest news, then long-term investment advise.

  29. hey mr. stock picker, there exists study after study that shows the active stock picker does NOT beat a well allocated asset allocation strategy. it just doesn’t. you mayuy get lucky sometimes but you won’t year after year.

  30. cramer did vote for obama, but criticizes obama daily.

  31. Index investors need to know that active trading creates positive externalities in the market. Without active traders and hedge funds that quickly assimilates new information into the market and signaling company managers of stockholders’ reaction to market news, passive investing is going to get you very far. Imagine if 100% of the market is held by passive traders, companies won’t bother to create any stockholder value. So to all of the passive investors out there, stop being contemptuous toward active investors or even try to convert them. Instead we should all thank them.

  32. It’s really sad that the anchor of the fake news is the one that most often points out the fallacies and real failures of our government. I’ve seen Jon Stewart out-issue virtually every guest that comes on his show. He’s just as comfortable discussing the silliness of reality tv as he is debating why Mike Huckabee’s anti-gay stances are disingenuous as a Christian.

  33. Jim,

    How untrue! Active investors don’t make companies create shareholder value. A strong corporate governance creates shareholder value. If not, how do private companies cretae value? Why would there by any Private Equity investment at all?

    What you are saying does not make sense. In Germany companies are owned mostly by other companies and still create shareholder value. In Japan, there is plenty of cross ownership and companies still create value. Value creation is not related to active traders… and I am not certain that we should thank them at all. A more detailed analyses of the benefits (liquidity mostly) and pitfallas (volatility mostly) of active traiding needs to be done before we can thank anyones. Personaly, I think that the costs outweigh the benefits, but that is another topic 😉

  34. Funny how Stewart only became concerned about CNBC after two of its hosts badmouthed his Messiah.

  35. Investors trying to make investment decisions based on a TV show is ludicrous, sure the hosts may make some sound overall investment tips/advice however no matter which side you are on, the media is a business trying to get as many views as they can to boost their revenue, they do not care about the financial well being of individual investors. Obviously companies like CNBC and the like need to make a show ‘entertaining’ for people to watch. If you talk to most people about investing they think it’s boring, but if you can hype them up and get them excited then they’ll watch the show.
    Likewise I would like to see Stewart take on the responsibility of trying to give investment advice or stock picks, it’s easy for him to ridicule another show because he has no responsibility he is merely a comedian. I am not trying to sympathize with Cramer or CNBC in any way, I believe that investors need to be aware that these TV shows are solely for entertainment purposes. If investors want to know what to do with their money then they should figure it out themselves. The problem that we face is that no one is prepared to learn what they need to, they just want the easy fix and neglect to educate themselves in finances. They either seek investment advice from TV shows, or give their money to called “professionals” and wonder why they lose half of their money. For the majority of it, large corporations do not care for the small investor they are only worried about their bottom line.

  36. This “author” is a world-wide joke, if he is such a good hedge fund manager what is he doing hosting a monologue show and pumping out books? Personification of greed, yep. Anyway I am up 6 percent over the past 18 months even though I had 50 percent of my portfolio in equities. I traded corporate bonds no thanks to Jimbo, who is a speculator and a day trader. The market is meant to take the retail “investor” for a ride, its craps game and the house usually wins my friends. I am a professional bonds trader and I dont listen to amateurish advice from self proclaimed experts who dont even know how to use a computer! I feel sorry for the audience this babbling brook has garnered, but you know what they say, “there is one born every minute and two to take him”, and Jim is one of those “two”. Jim most likely has an arrangement with the NYSE and he gets kickbacks for increased trading volume, as the senseless morons who watch his show rush to their computers to execute a trade. He is all about trading volume!

  37. Jim Cramer’s Getting Back to Even (Hardcover)
    This “author” is a world-wide joke, if he is such a good hedge fund manager what is he doing hosting a monologue show and pumping out books? Personification of greed, yep. This is a large book with little content. Cramer’s books are like a Betamax, you gotta ask yourself, “They still make you”?

    Anyway I am up 6 percent since the Dow dropped from 13,000 early last year on a large portfolio, even though I had 50 percent of my portfolio in equities. I make about 7 grand a month on my portfolio. Comprendez-vous? In the time the market has lost 30 percent I am up 6 percent, that is a 36 point out-peformance, comprendez-vous? Most of you have nothing saved and if you did make money it was on a pathetic little pittance. You see my pappy didnt raise no turnip farmer! I traded corporate bonds no thanks to Jimbo, who is a speculator and a day trader. The market is meant to take the retail “investor” for a ride, its craps game and the house usually wins my friends. Perhaps I havent made myself perfectly clear, while yall lost I won.

    I am a professional bonds trader and I dont listen to amateurish advice from self proclaimed experts who dont even know how to use a computer!
    I feel sorry for the audience this babbling brook has garnered, but you know what they say, “there is one born every minute and two to take him”, and Jim is one of those “two”. Jim most likely has an arrangement with the NYSE and he gets kickbacks for increased trading volume, as the senseless morons who watch his show flock to their computers like parrots to execute a trade. He is all about trading volume!

    The book is for dumb college kids groomed from his tv show, kids with dumb money and even dumber parents. Perhaps I havent made myself perfectly clear, that 6 percent rise over 18 months is on a mid 6 figure portfolio and that doesnt include commas or decimal points– its difficult to move a large portfolio in percentage terms but most of you wouldnt know that since the average person between the ages of 35-45 has less than 40 grand saved. Trolls are invited to comment. YOU STILL DONT GET IT DO YOU??

    Stock picking is for monkeys, professionals use etf’s now instead of taking on company risk. Yall in the stone age. What are yall talking about, my grammar is impeccable! I know the truth hurts but face facts, chances are you lost half your life savings and are now turning in desperation to “priests” like Cramer for help. To quote Lee van Cleef in the Good Bad and Ugly, “I wish you luck”. Hey thats something Cramer would say!

    Well now its clear why yall lost half your money in the market, yall ripe for the taking! Cramer exploits people who cannot think for themselves, people who are incapable of independent thought. He has raped your mind! Flock to his stock picks and lose the other half of whats left of your savings. WC Fields was right, there is a sucker born every minute and all of them are here at the Cramer page!

    I own HAO China small cap, its the future. The US has shown itself decadent and immoral, the system is corrupted beyond repair, our “leaders”, the CEO’s are criminals who are out for themselves and will stop at nothing to increase their personal wealth at the expense of the entire world.

    When the former CEO of Pfizer paid 60 billion dollars to acquire Pharmacia he was given a 20 million dollar signing bonus. Though legal, I find it criminal, sorry, I have mid 6 figures but I wont put more than 5 percent of my portfolio in US equities. Our country is too corrupt. I prefer junk bonds, they have superior performance to US blue chip stocks. If you invest in the US you will lose as you have lost the past 10 years. The fact is most of you are broke, and if you did make a little it was on a small 10 grand portfolio, not a real retirement portfolio of a half million dollars. Yall lost. Losers dont know when to quit (sell their stocks), thats why they lose. Yall have a bright future ahead of you.

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