on November 18, 2002
Cramer is an easy target for criticism, but this simple book has tremendous value.
I took this book with me on a 7 day Caribbean cruise and had a great time reading it under the coconut trees of St. Maarten and Antigua. Being away from CNBC, Wall Street Week, and the constant media attention to the stock market was a welcome reprise.
And so was this book.
At first glance this book may seem a little bit light on information. It's only 117 pages long at a time when we expect about 300 pages from a typical John Wiley-type finance book. But it's not the number of pages that counts, it's the information, personal interpretations by Cramer, and solid financial wisdom that matter.
By the time I actually got around to reading this book (on those great beaches), I must say that I truly enjoyed it!
The book is divided into 3 very distinct parts.
The first part is about how the public got totally used by Enron, Worldcom, and Rhythms Net type scandals. Since all of these events were so recent it doesn't take long before you start recalling all the pieces of information that came out about these cases. Mr. Cramer does a nice job of taking us all back to those days and recapping what went wrong. Each one was revealing in its own unique way. And yes, we got used!
The second part pinpoints the other culprits in the stock market's two and a half year demise (and giant NASDAQ crash!). Cramer reminds as of the all-stocks-all-the-time mentality that came to be at the market's peak. Also the potential danger of executive options, shady accounting, too many one-way mutual funds, and always bullish brokerage firms. And by the way, these culprits are still at today!!!
And finally, there is the last section about what to do. Here is current advice and simple guidelines to avoid getting used again in the future. Some of the gems are:
1) Have some bonds for income
2) Have some cash for annual buying opportunities
3) Buy stocks in incremental "get your feet wet" amounts
4) Buy at least 5 stocks from 5 different industries
5) It's okay to sell
6) Sell some on the way up
7) Sell your losers because bad stocks may not go up at all
8) Know your stocks and how they make money so you have a feeling of their value.
9) Buy index funds for diversification and low expenses
10) Hedge funds are better than mutual funds in concept. Here's something to research more on. Mutual funds are financial products who's time has gone.
For those readers who want an enjoyable read, who watch CNBC, have an interest in tech stocks, and feel like they were used and want to avoid it in the future, here's a book for you. It's a reminder of how to keep your head when things get too crazy on either the upside or downside.
A very timely piece!
P.S.: As a fellow author I can understand Mr. Cramer's disappointment in the reviewing process. Some people think it's a sign of brilliance to degrade intellectual property when it's simply a matter of them just not getting it. My advice to these negative types is to stand aside if you're not going to be fair. Let the reader have a chance to appreciate the author's work....the content and the spirit.
on March 9, 2004
You just gotta love Cramer. Whether he's on his knees confessing to being a stock market addict or crawling across the table, ranting and raving on CNBC, he entertains, invigorates, and educates. But he's also a bull in the china closet - so now, after the 2000-2002 debacle, we get his condemnation of the whole Wall Street scene inscribed with the immortal words, "You Got Screwed," as he picks over the underbelly of the tainted beast. Yes, it's a short book, but that's its selling point: Cramer crams everything into something you can sit down and read in a couple of hours - and actually understand via his take-no-prisoners style. His brash attitude is more of the street fighter than the wood-paneled office executive, and this train wreck of a market comes alive with real personalities backed up against the wall as Cramer blasts them to bits. No words wasted. Just typical Cramer. You either love him or hate him, but you can't ignore him.
First he tells you why the system reeked and rotted, eventually collapsing under the weight of fakery and fraud. Then he ends the book by advising you how to never be caught up in Wall Street's self-serving ever again. And he does a good job of both.
His advice on how to protect yourself in the future is good, basic, Investing 101: "Admit the crash happened and move on, find a trusted financial advisor if you won't or don't want to do the homework yourself (he advises 2 hours a week), investigate and analyze companies prior to putting one red cent into them, forget 'buy and hold,' learn to read balance sheets, put emphasis on dividends, monitor insider and corporate ('buybacks') buying of their own stock, use P/Es to value stocks, always keep cash available, and avoid margin." Good advice from a pro who's seen and done it all.
Now the fun part begins. Mutual funds end up getting the brunt of the Cramer cannonballs. The game they played was "beat the numbers." The financial press loved it because it gave them "the reason" why the market was going up. Made they look smart. Cramer takes apart this silliness, exposing it for what it was - accounting gimmickry, pure and simple. All that the analysts and companies had to do was lowball the upcoming quarter, then "beat the number" by a penny, and we were off to the races. So why was the investing public taken in so thoroughly? "The public thought it knew all it had to know...Democratization (of stocks), however did not bring with it all the skills you needed to make good judgments for the long term. For example, no one provided the tools of how to read a balance sheet or assess cash flows. No one taught people how to spot red flags or how to tell if a company wasn't doing as well as you thought. And no one explained that stocks, particularly tech stocks, were high-risk pieces of paper..." (26)
Moving on to corporate governance, Cramer slams the looting of the treasury via stock options as corporate insiders served themselves a hearty dish of cheap stock, seemingly at no cost to the bottom line. Only later do we now realize that dog won't hunt either.
He indicts the SEC, the accountants, the corporate officers, the boards of directors, the media, the brokerage houses, the analysts, the academics...everybody except those whose money was being looted - the individual investor.
Cramer saves his strongest salvos for his slicing and dicing of Enron. His delivers an indictment of the whole political culture of the 90s with: "...maybe it was just everyone because Enron represented, not a simple fraud like WorldCom, but a wholesale breakdown of every aspect of the legal, accounting, governmental, and regulatory bulwark to keep corporate America honest." Sounds remotely familiar like another entertaining individual of the 90s who took shot at the same targets through humor. The comedian Seinfeld perhaps knew us better than we knew ourselves at the time, as his four scoundrels lied, cheated, scammed, and flimflammed their way through the decade - an era that produced a "something for nothing" attitude that seems to have permeated every facet of our lives, and emptied out our pocketbooks as well.
In the end, Cramer's diatribe is basically an intelligent, heart-felt cry for investor education. Education of investment techniques and strategies, and an understanding of ourselves. Learn that and you won't have to depend on a Cramer or anyone else to manage your finances, plus you won't get screwed by anybody either.
on July 11, 2004
I have undergone usual love-hate type feelings towards Cramer multiple times. It is really diffficult to understand him, especially when he was writing his trading diary on realmoney.
Now that the greatest bear market is (probably) over, and I lost my share of money in it, I understand what Cramer was saying back then. I mean in 2000. In March. In 2001.
This book is small, and I had missed a lot of games that wcom and enron played with unsuspecting people. I was already out of markets as I could not survive earlier waves of selling.
I went back and read Cramer's writings in March, 2000. Most people think he is just a pumper - I was surprised that he repeatedly urged people to get out of markets - "cash is king" was his mantra during the bearish cycle. And he nailed it both, the great bull ride and the bear ride, with almost correct timing.
You can hate him, he did what he had to do at his hedge fund, a lot of what may be immoral - he had to, it his job. But his writing has been on the mark - you can't deny that.
As for the plug, he mentions thestreet.com few times which is a FREE news site. I do not recall him mentioning realmoney.com ever in this book, which is paid content. At the end, he just "mentions" his own investment product "alerts", but that is only if you want to do it with him. His first choice is always a seasoned investment adviser whom you can trust.
I am not his employee, just a general trader. I would now trust Cramer more than any other Wall St analyst or a journalist who doesn't know a thing about the markets.
on November 24, 2002
The title of this very short book should be "You Got Screwed By James Cramer". In this book Cramer pinpoints all the usual suspects except 1 very culpable party - James J. Cramer. No one was more bullish on ultimately worthless technology stocks at the top of the bubble than Cramer. He hyped them repeatedly to subscribers to his website including his infamous "Winners of the New World" speech that has been widely recognized as the most damaging rhetorical chicanery of the entire bubble. While there are literally hundreds of other examples of Cramer hyping tech stocks throughout the end of the bubble and during a huge portion of the decline (he hated them at the recent bottom), it is the "New World" speech that will rank in history with the old "permanent plateau of prosperity" nonsense from the 1920s.
This tome simply reeks of hypocrisy. Yes, Jack Grubman is due for some criticism. But when The Wall Street Journal attempted to subject grubman to some accountability at a time that it might have saved the little guy some money, it was Cramer who came to Grubman's defense and proclaimed him a great moneymaker through his little fiefdom at The Street.com.
That is just one example of Cramer trying to cast himself as the great savior of the individual investor while refusing to even acknowledge his own vast role in destroying the wealth of anyone who paid for his advice over the past few years. It is easy for Cramer to fault Ken Lay after the fact, but harder to confront his own repeated calls for new bull markets that never appeared. It is easy for Cramer to feign indignance over Worldcom, but much harder to admit that his own model portfolios have probably cost people millions. It is easy for Cramer to cast aspersions on the behavior of institutions during the bubble, but harder to face the fact that people who bought his IPO on the first day near $70 might now still be siting with a $3 stock.
This book is 117 pages of after-the-fact finger pointing by a man who has as much to be sorry for as anyone who was in the Wall Street game in the last few years. But to be Cramer is to never say you are sorry, to sublimate your own role in the financial destruction of the individual investor in a fury of cynical indignation and obnoxious bluster.
on October 21, 2003
This is a short book describing some of the reasons why the tech bubble burst, the stock market tanked and how many companies lied, cheated and stole. It is a totally worthless book for any that are already seasoned in the business, however, for the neophyte or unlearned investor that has money on the line already, this book could prove priceless.
Some time back I reviewed a book called "Net Zero", also a book describing how the bubble burst. I wrote in my review that the problem with the book was that it was much to technical for the beginner, i.e. the guy that really needs to read it. So the simple fact that this book is short, basic and too the point, shouldn't be considered a negative unless you already know the information.
If you're considering putting money into the market for the first time, and you don't already understand why the market tanked and how certain parts of the industry are stinking thieves, then you'd be foolish to pass on reading it. It could save you a fortune.
on November 22, 2002
Jim Cramer advice and insight can literally lose you your money within a matter of months. I've never seen anyone, in the history of the stock market, and in part thanks to the internet, with the ability to lose money as quickly as Jim Cramer can. Cramer builds portfolio's then walks away from them after they lose enormous amounts of money. In 2001, Jim Cramer's Action Alert Portfolio lost over 25% within a matter of a few months. Cramer had told his followers that this was the only mid to long term investment portfolio they would EVER need to follow. He walked away from it. He is a charlatan, a snakeoil salesman, and a con artist extraordinaire.
on October 13, 2003
There are quite a few terrible reviews for this book, mainly along the lines of "Gee, we already know this, duh!" But for those of us not watching the MSNBC ticker and dont bet our life savings on whether a share rises or falls, its quite informative.
He details not only the fall of Enron, but how and why the telecoms rose so high and burned out so brightly. He exposes the inner machinations of mutual funds and how the analysts really make their money. He even offers a bit of good advice on not falling into bad companies and avoiding risky investments.
I admit I wish there was more, and, yes, he did reference thestreet.com (his website) a bit more than is prudent but it was all in the spirit of getting the information out. All in all, the promises he made with the title and back cover of the book, he delivered upon. If you are expecting anything more than to know why your portfolio fell apart and a little advice on sewing it back together, check out another book. Otherwise, its worth the read.
on November 21, 2002
Mr. Cramer's writing, both in this short book and on his Web site, TheStreet.com, is such a textbook example of denial and projection that it ought to be used as such in college psychology courses.
At the very top of the technology bubble, Mr. Cramer loudly and repeatedly proclaimed his love of tech stocks that had no earnings and no book value. He urged investors to buy them and forget them.
As the bubble popped, Mr. Cramer repeatedly called stock market bottom after stock market bottom, publicly maligning one analyst who had the foresight to predict that the Nasdaq would one day hit 1,500.
Mr. Cramer's own record as a stock picker speaks for itself. He doesn't make his Action Alert portfolio performance public for a reason: It badly trails many mutual funds. One of his earlier personal portfolios that he touted on his Web site simply disappeared after suffering abismal performance.
Mr. Cramer makes some cogent points in his book. But self-righteousness combined with hypocricy is a toxic mix indeed.
on January 25, 2003
...if you paid for this book, that is. It serves up a lot of dirt on some of the principal culprits in the debacles at Enron, Worldcom etc. and blasts the SEC for its dereliction of duty. Moderately interesting but ancient history, and not germane to the question of how you can rebuild your finances. That question isn't addressed until the last chapter of this slim volume, and then Cramer just rehashes the kind of advice you get in any decent book on investing for beginners. He does make a good point in stressing the importance of when to sell, which is often overlooked in other books. On the whole though, this is a slight and insubstantial book, quite disappointing and not worth the asking price.
on November 30, 2002
The author has been responsible for more capital incineration than other other journalist in the history of Wall Street. I concur that the level of hypocrisy in this book is unmatched.
It is amazing at the level of intellectual dishonesty that Cramer maintains. He claims to be looking out for the little guy and rails about accountability yet he has none. His portfolios speak volumes about his expertise as they are all massively red and hidden from public view. He has started others and then abandoned them when losses were so great they represented a major embarassment to himself and his organization.
The book itself is a poor attempt to generate publicity and at 110 pages lacks any kind of "rigor" as Cramer likes to say.
Highly recommend not buying it or even bothering to check it out at the library.