Make us your home page

Q&A: The mad man of money, Jim Cramer, says jump into stocks, carefully

Jim Cramer of CNBC’s Mad Money hosts the Business of Sport Forum last month in New York City. He doesn’t expect the current stock market year to match last year’s climb. “We could be up about half of what we were last year,” he says.

Associated Press

Jim Cramer of CNBC’s Mad Money hosts the Business of Sport Forum last month in New York City. He doesn’t expect the current stock market year to match last year’s climb. “We could be up about half of what we were last year,” he says.

Living up to his "Mad Money" moniker, Jim Cramer has made a living the last eight years talking about stocks. As the flamboyant, crazily enthusiastic stock picker on CNBC, he dishes up daily pronouncements of what's good, what's hot, what's not. With two Harvard degrees, the 58-year-old investor-turned-TV-host is bright, opinionated, animated. He peppers his daily, hourlong cable TV show with rapid-fire chatter about stock companies and interviews with CEOs. A former newspaper reporter, he ran a successful hedge fund that boasted annual profits of 24 percent before he shut it down in 2001, largely for stress-related reasons. In a new book, Jim Cramer's Get Rich Carefully, his first book in five years, Cramer isn't shying away from any of the topics that have repeatedly put him in the critics' dunk tank. Here are some excerpts from a recent interview.

Last year was off the charts for the stock market. Are we in for another blockbuster year in 2014?

No. I've been saying that we could be up about half of what we were last year. We've had a very big move. If the economy doesn't pick up from here, we will not be able to make a lot of headway. It's got to continue, and it's not clear to me that it will. It should. We're on the right course.

In your book, you vividly describe the financial meltdown that drove many out of the stock market. You criticize Wall Street's "machine-gun bandits," whose reliance on high-frequency trading can distort the market, as well as the "wealth-destroying flash crashes, flash freezes and Facebook fiascoes" that have shaken investor confidence. Despite all that, you're still encouraging Americans to embrace the stock market?

Carefully. Your first $10,000 should be in an index fund, so you're diversified. Only after that should you be investing in a portfolio of your own. Index funds are great because of their low fees. The book is how you can invest wisely if you spend the time. If you try to do it quickly, you'll lose money.

You took a lot of heat in 2009 for calling President Barack Obama "the greatest destroyer of wealth" you'd ever seen. Yet the opening of your new book repeatedly castigates politicians of both parties for "bankrupting us slowly." I take it you're not backing off your contention that government and political leaders aren't helping individual investors?

The president came in with very little understanding of how the stock market worked. I felt he had it wrong with a failed stimulus plan to try and get the country back economically. I felt job creation was the No. 1 priority. … Most of what we've seen in terms of the recovery is from Ben Bernanke. The Federal Reserve has been fabulous. The Democrats and Republicans are the economy's worst enemy because they have no ability to see through partisanship.

You emphasize your investing mistakes, such as being too emotionally invested in a stock, which can blind investors to knowing when it's time to buy or sell. Specifically, you cite your love affairs with Apple and Chipotle.

You just fall in love with a stock and that's a terrible thing. If I can't tell people I've made mistakes and learned from them, I'm not doing my job. I've made good calls and bad calls. The good picks take care of themselves. The bad picks … if you don't study and learn from the mistakes, they can overwhelm the good ideas.

Some of your critics say you're an experienced insider exhorting mere mortals into buying/selling stocks in ways that can be dangerous, if not downright destructive, to their financial wellbeing. Are you encouraging day trading or reckless investing?

Day trading is the biggest sucker game in the world. I hate day trading. I want people to have a five- to seven-year horizon on investing, showing great discipline. … It's a sobering time. But there's a longer-term approach that you can profit from. You have to do some homework and not do it blindly.

In the book, you mention how your daughters' insights have influenced some of your stock picks, such as Apple. How often do you glean ideas on investments through younger eyes?

A tremendous amount. I've taught in high schools and (appeared) at 17 colleges. You sit and listen to what (young people) think is going to happen, what devices they use, how they view the world. It has been very valuable. My daughters are 19 and 22. They got me into Dominos, Facebook, Yahoo, Google, Netflix — all very powerful trends that my kids turned me on to.

What are some of your must-follow stock categories?

Social, mobile and cloud companies (Facebook, Google, LinkedIn); biotech (Celgene, Gilead, Regeneron); healthy foods (Whole Foods, Panera, Chipotle); value retailers (T.J. Maxx, Priceline); energy (Schlumberger, Anadarko).

Q&A: The mad man of money, Jim Cramer, says jump into stocks, carefully 02/14/14 [Last modified: Friday, February 14, 2014 4:50pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Tribune News Service.

Join the discussion: Click to view comments, add yours

  1. A meatless burger that tastes like meat? Ciccio Restaurants will serve the Impossible Burger.

    Food & Dining

    TAMPA — The most red-hot hamburger in the nation right now contains no meat.

    Luis Flores, executive chef at Ciccio Restaurant Group, prepares an Impossible Burger at Epicurean Hotel's Food Theatre. Impossible Burger is a plant-based burger that will launch on Sept. 27, 2017 in all the Ciccio Restaurant Group locations, except for Fresh Kitchen. "This burger caters to the carnivorous, not just the vegetarians" said Jeff Gigante, co-founder at Ciccio Restaurant Group. ALESSANDRA DA PRA  |   Times
  2. Construction starts on USF medical school, the first piece of Tampa's Water Street project


    TAMPA — Dozens of workers in hard hats and boots were busy at work at the corner of South Meridian Avenue and Channelside Drive Wednesday morning, signaling the start of construction on the University of South Florida's new Morsani College of Medicine and Heart Institute.

    Construction is underway for the new Morsani College of Medicine and USF Health Heart Institute in downtown Tampa. This view is from atop Amalie Arena, where local officials gathered Wednesday to celebrate the first piece of what will be the new Water Street District. The USF building is expected to open in late 2019. [ALESSANDRA DA PRA  |   Times]
  3. Tampa Bay among top 25 metro areas with fastest growing economies

    Economic Development

    Tampa Bay had the 24th fastest growing economy among 382 metro areas in the country for 2016. According to an analysis by the U.S. Bureau of Economic Analysis, Tampa Bay's gross domestic product, or GDP, increased 4.2 percent from 2015 to 2016 to hit $126.2 billion.

    Tampa Bay had the 24th fastest growing economy in the country for 2016. Rentals were one of the areas that contributed to Tampa Bay's GDP growth. Pictured is attorney David Eaton in front of his rental home. 
  4. Tampa Bay cools down to more moderate home price increases

    Real Estate

    The increase in home prices throughout much of the Tampa Bay area is definitely slowing from the torrid rate a year ago.

    This home close to Bayshore Boulevard in Tampa sold for $3.055 million in August, making it Hillsborough County's top sale of the month. [Courtesy of Bredt Cobitz]
  5. With successful jewelry line, Durant High alum Carley Ochs enjoys 'incredible ride'



    As a child Carley Ochs played dress up, draped in her grandmother's furs.

    Founder Carley Ochs poses for a portrait in her Ford Bronco at the Bourbon & Boweties warehouse in Brandon, Fla. on September 19, 2017. Ochs is a Durant High and Florida State University graduate.