Customer Reviews

Trading With the Enemy: Seduction and Betrayal on Jim Cramer's Wall Street

5 star:		(31)
4 star:		(16)
3 star:		(11)
2 star:		(5)
1 star:		(11)

 

 

Each year, thousands of eager and ambitious young women and men arrive on Wall Street. What we have here is Maier's account of what happened to him after he relocated from Cambridge (MA) in 1994 and went to work for Cramer & Company, a hedge fund. He made a total commitment to advancing his career and eventually was entrusted with managing an investment fund of approximately $50-million. His is an insider's unique and compelling interpretation and evaluation, not only of his own experiences but also of Jim Cramer and the firm he founded and headed. As I began to read this book, I realized that its title lends itself to all manner of interpretation. For example, who is the "enemy"? Those with whom one competes for career advancement, obviously, but also those psychological forces which require trade-offs when ethics are in conflict with expediency. (Pogo once suggested that "we have met the enemy and he is us.") Maier and Cramer worked closely together and then, for various reasons which Maier explain in this book, he left the firm after five years. By then he and Cramer had become enemies and are now involved in litigation.

It is important to keep in mind that personal accounts such this are necessarily selective and subjective. (The same is true of Cramer's Confessions of a Street Addict.) There are specific reasons why this book's subtitle is "Seduction and Betrayal on Jim Cramer's Wall Street." Maier acknowledges that he was seduced by the opportunities he pursued while employed by Cramer & Company. Eventually, he felt betrayed by Cramer and explains why. That relationship reminds of the character Bud Fox played by Charlie Sheen in the film Wall Street. He is dazzled by the business success and lifestyle of Gordon Gecko, the character played by Michael Douglas. Much of what motivated Fox also motivated Meier. Moreover,when the film concludes as Fox and Gecko are headed for federal prison, Fox's opinion of Gecko is strikingly similar to Meier's opinion of Cramer when their five-year association ends in 1995.

It remains for each reader to decide to what extent Meier is responsible for what happened to him, and, to what extent Cramer should be blamed. My own opinion is that neither emerges as an especially sympathetic character by book's end. Both seem to be inevitable products of a materialistic society in which, if "greed is good," wealth and power are even better. But the question remains, "what profit a man...."?

I'm a mortgage trader in a regional investment banking firm so I looked forward to this book about the business even though it deals with the stock side. But many things bother me about the book. The story is of an intelligent guy clearly not qualified for a Wall Street job who gets a job at Cramer's hedge fund referred through one of the large investors. Ok, that could happen. The book does a good job of relating the mundane tasks that beginning traders perform and in that respect, I think the book would be very good for beginning I-bankers. The tasks can be very mundane but no matter how smart you are, the only way you learn is through repetition of doing the tasks daily. The author seems to have a knack for the business and eventually develops to recommending his own stocks.

But the author just can't put up with the belligerent, tyranical Jim Cramer who runs the firm. Well, welcome to investment banking where egos are dominant. Yes, Cramer is the worst variety. And there are stories of illegal or at least unethical trading. But the author just doesn't appear to have the stomach for the business and can't sleep at night and can't put up with the abuse from Cramer so he eventually quits a job that started at less than $25,000 even though it quickly grew to a six figure income.

I don't follow Cramer on CNBC but clearly this book is written to play on his fame. Yes, it is a hatchet job and maybe deserved. But it is very thinly written and focuses on some very petty examples. But did I enjoy it? Yes. I happen to like books about investment banking and this book had those. But I would caution that if you are looking for earth shattering information about a stock icon, it's really not here.

Congratulations to Nicholas Maier for casting as accurate a portrait as possible of everything that was wrong with the high-end of the financial world in the 90's and for having the courage to risk a stadium filled with newfound enemies. If you want a review of the actual content of the book, skip the next paragraph.

That many participants were willing to tolerate ridiculous antics and downright degradation for the sake of pure greed shows how little anyone learned in the 80's. The only difference this time around was the 90's players took note of the Achilles heel of their 80's corporate raider counterparts and didn't flaunt it. Most hedge fund managers are nothing like Jim Cramer as described by Maier, and in fact many are nice, honest, hard-working intelligent people; they don't put on hundreds of trades per day or ceaselessly berate their underlings and have chosen to pursue a career where risk-taking and actual skill can translate into deservedly stratospheric rewards. I know as I used to work for one that operated humanely. The fact remains that Cramers do exist and are not a complete aberration. Trading With The Enemy should be required reading for all undergraduate business majors and MBA's so they can have a taste of the Faustian bargain presented to them in modern day terms that they can relate to.

As a general read, the technical concepts in Trading might be a bit beyond the scope of the average reader. Although Maier goes to great lengths to explain tricks of the trade in layman's terms, I think a lot of the details will be lost on most, save those who have a sophisticated knowledge of the financial markets. Still, the average reader can read in easily understandable detail about the various "standard practices" of the hedge fund world. Beyond that, the colorful portrayal of the trading environment and employees of his firm may be enough to keep people chuckling and entertained through this fast read. At the same time, many non-Wall Streeters may be appalled by the utter depravity of the world described in this book.

For those who like Liar's Poker and Fiasco, you should not miss this book.

For those who have not read the above two great books but are interested in the operation of a real hedge fund (that there's no hedgeing at all but wild speculation using quasi inside information and influence on mass media/large brokers), this book is for you.

For those who appreciate good story writing but are ignorant of the stock market, this book still offers great enjoyment, thanks to the comparative literature background of the author.

Reviews I've read of this book seem to paint it as an all-out assault on Jim Cramer's character. The impression I got was that the author was trying to profit from Cramer's success by releasing a book about him, and that turned me off. I hate when people try to capitalize on others' success by publishing `unauthorized accounts' or `insider's looks' which are often based on very little personal experience and composed almost entirely of hearsay and public rumor, and that kept me from reading this book for quite some time. When I finally decided to read it, though, I discovered that this book is anything BUT a pathetic attempt to discredit Cramer-instead it's a candid look inside Cramer's Wall Street by a man who worked for him for 5 years.

That having been said, there's really very little here about Cramer that isn't public knowledge, especially after his autobiography "Confessions of a Street Addict." Cramer acknowledges that he's egotistical and craves attention, he admits that he sometimes made his money using questionable tactics, and he certainly doesn't try to cover up the fact that he has an awful temper and that he completely lost control of his emotions on a regular basis. In other words, the "Cramer bashing" aspect of this book is pretty minimal, and there's no need for fans of Cramer's TV show or any of his other avenues to `read this book and see what he's REALLY like.' If you can see him chewing on rubber bulls and bears every night on TV and think he's totally right in the head, this book isn't going to enlighten you any.

Maier's book is a great look inside an incredibly successful hedge fund. I found the "typical day" chapter the highlight of the book, where we get an intense look at the frantic buying and selling and relentless playing of the market that is common in many of these funds. It's here that Cramer, even through Maier's tainted view of the man, really shines, as he keeps mental track of several stock positions at once, talks to 3 people and on 2 phones simultaneously and somehow keeps the pulse of the market and calls each and every move before it happens with stunning accuracy.

Maier, of course, is not complimentary in his analysis of Cramer and certainly paints the man in a bad light, but I think there is a good amount of objectivity in his work. He does make some accusations that are probably baseless or based on rumor (I believe Cramer sued him for claiming there would be a second SEC investigation on him), but overall it didn't seem to me like Maier was really calling for Cramer's head. If you're into Jim Cramer or if you're interested in a look inside Wall Street through the medium of a hedge fund, certainly check this book out-it only takes a couple hours to read. If you're thinking its going to "expose" Cramer, though, you'll probably be disappointed. Reading this book along with his own autobiography certainly makes for a fascinating look inside the world of Wall Street.

To say that Jim Cramer is "intense" masks the true nature of this man's character...if what Nicholas Maier tells us is true, the general public should be very worried that people like Cramer are handling billions of dollars of assets and have an important say in the country's financial security. I was literally appalled at the nature of the day trading depicted in the fast-moving world of hedge funds and can think of no reason why the SEC let this continue when they had a chance to stop it. This is the type of emotion, I'd wager, that Maier solicited when he wrote this otherwise fine account of life on Wall Street. "Trading with the Enemy" is a fast-paced and wide-open telling of what it was like to work at Wall Street for Cramer and Co. in the mid 90's under the psychotic oversight of Jim Cramer and a testament to the abuses of money and power that this type of environment sows.

The story starts innocently enough with a young, seemingly un-motivated recent college grad who's interested in the American dream of making it rich in the stock market. Nicholas Maier uses his connections to procure a job at Cramer and Co., then the leading hedge fund on Wall Street. Once in, Maier learns very quickly just how this high octane world operates and starts a 5 year period of constant self-justification working for a maniacal, but otherwise brilliant stock market trader. The reader is led down the path of insider trading and we learn all about the ins and outs of trading thousands of shares of stock for major profit. We also learn that to make this kind of money, it requires an almost insane boss who's insecurities abound as he's able to dismantle the complex world of stock trading and see the market as others don't. Mental and sometimes physical abuses (he has to avoid flying computer monitors on more than one occasion) are the norm that Maier has to endure in this company, but so is the high-energy environment that he craves and becomes addicted to. Slowly, the mental anguish overtakes the addiction and Maier becomes one of the many casualties that Cramer lays waste to in his career. What this results in is an almost unbelievable story of being subjugated to a character that often refuses to take his medication (much needed I might add) and one that assumes the attitude of a general going to war...frought with all the tactics and betrayals that "everything is fair in war" surmises. Cramer knows no bounds (mentally or physically) in getting what he wants and goes berserk at something as comparetively trivial as selling thousands of shares at an eighth of a point lower than he thought.

To compensate, Maier turns to drugs and finally decides that he's had enough...fortunately for us, he majored in Writing and Literature in college and pens a revealing expository that should be required reading for all young brokers. In fact, the only criticism of this work that I can come up with is that the story ends too quickly...we go from hearing about the initial stages of his substance abuse to his walking out the door in only a matter of a few pages. I would have liked him to expand on this a little more.

To be fair, I suppose that one should read Cramer's account of this period ("Confessions of a Street Addict") to get his perspective, but the overwhelming theme won't change I'll bet. For those who want to learn about the inner workings of Wall Street, this book will be a powerful introduction. Fast paced and imminently readable, one comes away from this work with a sort of bitter taste...one that says that it takes this kind of personality (Cramer's) to control the market and to make major money when there could be alternatives that could be equally successful.

I read this book in a day -- I could not put it down. Besides being extremely well written and at times down right hysterical (I had to set it down twice while I could not stop laughing!), it drives home a major point that too many people in the business world have only started thinking about since September 11 -- is it worth it? I hardly knew who Jim Cramer was and it doesn't matter. There are a million other business executives that "model" the kind of behavior Jim Cramer exhibited in this book. I know firsthand after 20+ years in Fortune 500 companies. But why do we sit back and tolerate, promote and enrich people who scream at their secretaries and copier repairmen, turn the air blue with their foul language, entertain themselves by belittling others and value money far above fundamental ethics or concern for fellow human beings? Maier's book is the perfect reading material for those who need a laugh over the ridiculous corporate cultures we've come to rationalize as acceptable -- and who may need the courage to walk away.

I have no idea whether the allegations in the book are true. However, it would explain a lot of things.

Ever since Cramer "retired" from the hedge fund in December 2000, his stock picks have been almost universally wrong. Every stock he recommended seemed to subsequently fall by 50% (Q,CEG,TYC,HAL,MER,EMC to name a few). Every time he screamed about his "naked affection" for the tape, stocks fell. Every time he got bearish and negative, stocks soared. It was uncanny. Cramer tried to revise history, hide his previous stock picks etc. but every new pick was just as bad. Cramer became a national joke. The highly reputable Kiplinger's said taking Cramer seriously was analogous to taking Danny Devito seriously in a slam-dunk competition. Even the NY Post jumped on the Cramer-bashing bandwagon.

All the time, Cramer defended himself by bragging about his hedge-fund track record, allegedly 24%/yr from 1986-2000. Maybe Maier is right about how Cramer achieved that track record because it certainly wasn't his stock picking prowess.

Or maybe the track record is a lie too. The NY Times exposed that Cramer's fund returned a pathetic 2% in 1999, a year when the Nasdaq was up 61% and Cramer was marketing himself as a tech genius. Cramer tried to stop the NY Times from printing the truth but to no avail. Same situation here? I don't know but it couldn't happen to a nicer guy.

If you are not familiar with James Cramer, you will likley find this book to be a short, boring story written by a hack writer desperate for money and/or attention.

However, if you are one of the millions who has lost money taking Cramer's advice and then had to listen as he revised history and bragged about what a great call he made, you will love this book. The author knows what the Cramer-haters want to hear and he gives it to them. It is an awesome skewering of the despicable Cramer.

If you ever wondered why Cramer showed no class when Dave Kansas and Adam Lachinsky left thestreet.com, you'll find out. If you ever wondered why Luskin, Holmes, Wolff et al were fired after disagreeing with Cramer, you'll find out. Not the specifics of these cases, but what type of human garbage Cramer really is.

Whenever you are tempted to take Cramer's advice, just refer back to this book.

I read this book in a single evening. Reading about Jim Cramer can make you sick, but it makes you wish he was your money manager. The author of this book does a very good job creating the visual image of working for the madman himself. Through a myriad of stories, one finds themselves glued to this book to find out what else Cramer did at his job. If you are a Jim Cramer fan, I highly doubt this will book will steer you away from him. The book presses how much Cramer cares about his job and money, and reiterates the fact that he puts endless hours to perform better than most of his peers. If you like Jim Cramer or hate Jim Cramer, I recommend reading this book, because it can certainly make you hate him or like him more.