Cramer's letter (June 23rd)

L

Longhorns

Cramer is getting his ass handed to him in some of his "Action Alert" portfolio positions. Today he sent out this letter to the subscribers...

http://www.thestreet.com/tsc/emails/aap_email_letterfromjim.html

Dear Action Alerts PLUS Subscriber:

Boy, has this market been painful. It has been particularly painful for me as a former professional money manager because the trading restrictions that I have accepted to run this service in a way that's fair to you mean that I can't cut my losers and get into better names fast enough to protect the portfolio.

But all through this ugly period, I have made sure to tell you about every trade, every opening I saw that might help you trade better, even though I may not have been able to take advantage of them.

I don't have all the answers, much less a crystal ball. I can't tell you when we'll finally hit bottom. We could be in for a long, tough haul this summer — or beyond, if the inverted yield curve is to be trusted. But I've been in this game long enough to know that no matter how bleak the market looks, there's always a bull market somewhere, and I want to help you find it and profit from it.

Hang tough with me through the turmoil. Together we'll chart a course through this volatile market to the green on the other side. We've already made money together. And with a little time, we'll make even more.

Sincerely,

James J. Cramer






He's probably getting overwhelmed with angry e-mails from the sheep that follow him.

My favorite part is how he blames his "trading restrictions" for not having better performance numbers. Why not just tell the truth...he was buying BOL everyday for weeks as the stock was getting crushed, then finally bailed a few days before it bounced. He's been buying CTXS, NTAP, FWLT, etc. for the last two months while the rest of the world has been selling them. He's a perma bull who is now getting rocked in the first real pullback we've had in over 3 years.
 
those restrictions are bull. as part of it, he could have put in something like:

"if a stock goes down 10% from my entry point, it will be auto-sold".

that would be one way to limit the losses. but cramer "doesn't believe in stops".

and don't forget NT - where he bought lots on the way down - and years ago, CNXT, which he bought from above 10 all the way down to about 1 or 2? then proudly touting the calls of getting a double on those cheapies by selling around 4; ignoring the buys above 10...

the interesting part - his performance over the last few years, since he started, has NOT been markedly better (if at all now) than the s&p. that's 4+ years of mainly a bull market, and he kept pace with the indices. but he used to say on TSCM that 'you' (reader) were a better investor than he was...
 
its easy to make money when everything goes up. this is cramers second time with this problem. he had it in 2000 sell off also.
 
Quote from brokerboy:

its easy to make money when everything goes up. this is cramers second time with this problem. he had it in 2000 sell off also.
More...

I agree that Cramer is a toolbox, but it's been well-documented that he was 100% in cash during the 2000 sell-off.
 
I can't believe he doesn't tell people up front that if the stock goes agaist your position that you should bail. Give them some sort of exit, say 8 or 10% and don't have more than 10% of your entire port in any one position.

I saw his show recently (last week) where he was talking about a stock that he had mentioned and it was down 30% in very little time, 30%, WTF.

He then told his lemmings that they should BUY more of this stock to Average down. He said "I normally don't recommend this but I am very confident in the companys turnaround, they have great Fundamentals. WTF, buy more after it dropped 30%?

I used to be a stockbroker and I always told my clients UPFRONT so I could prepare them what my expectations were for both Gains and Losses. I told them 12% was my boiling point to get out if the stock went against us, we could always reenter. I told them I would give them the lowest cost commission possible if we reentered the same stock.

My clients told me their previous stockbroker NEVER told them to get out, the stock would eventually turn around.

My clients trusted my decision 100%. In fact, they thanked me for getting them out with 8-10% losses. They were relieved that someone told them to bail.

Cramer is losing credibility fast. Some of the things he says blows my mind.
 
More than anything, I feel that the guy is disingenuous. When he was trading at his hedge fund, I'm sure he got short all the time. To now try and be long-only and use his hedge fund mega-status as a pillar of ethos seems not only dishonest, but disingenuous... and I'm really surpsrised he's not called out on this more often.
 
if you want to see something incredible, check out some of cramer's on-air "successes".

one of them was bought out last week, at like 26. and he ran a clip of reco'ing the stock last year at 20 or so.

only problem? the stock went to 28 or 30...then to where cramer reco'd it, maybe lower...and in fact was still there when the buyout happened.

similar thing with CROX; after they beat earnings a couple months ago, he ran his clip from a few months before saying "buy this now" (at 28). the stock was trading that day in AH at about 33 or 34.

the stock gapped to 29 or 30 the next morning before it took a fast train to 20.

that will blow your mind, citing those as the successes...
 
Quote from FaderTraderr:

More than anything, I feel that the guy is disingenuous. When he was trading at his hedge fund, I'm sure he got short all the time. To now try and be long-only and use his hedge fund mega-status as a pillar of ethos seems not only dishonest, but disingenuous... and I'm really surpsrised he's not called out on this more often.
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Cramer said the Lawyers at CNBC do NOT allow him to Call Short Sales because they are Dangerous to the Public and they don't understand it.

Sometimes his callers mention shorts but he doesn't respond.

Very few brokers, investment letters, talk shows, etc... ever talk about shorts.

The reason he has lost everyones money lately is because the markete has been down for 8 weeks and he can ONLY choose Long's, F that!

He has to recommend something or no one would watch.
 
Quote from F-Trader:

Cramer said the Lawyers at CNBC do NOT allow him to Call Short Sales because they are Dangerous to the Public and they don't understand it.

Sometimes his callers mention shorts but he doesn't respond.

Very few brokers, investment letters, talk shows, etc... ever talk about shorts.

The reason he has lost everyones money lately is because the markete has been down for 8 weeks and he can ONLY choose Long's, F that!

He has to recommend something or no one would watch.
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What is so f-ing hard to understand about getting short? God help us all.
 
Have you ever tried to convince someone who is giving YOU their money to invest and tell them you have a stock you Hate and would like to short it.

They have NO fuggin clue. 60% of my clients were Doctors making over $600,000 year and they couldn't grasp Short selling.

They don't understand how you can Sell a stock without Owning it First.

I had very few clients who wanted to Short sell. The ones I convinced Always wanted to Short, LOL.

Mac
 
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