Why do people listen to Jim Cramer Investing Advice?

Everyday in the office, when mad money comes on it’s my favorite part of the day, mostly because it means I’m about to be able to go home but also because it’s very entertaining.
However, everyday I wonder more and more why on earth someone would actually listen to the advice he gives, nonetheless pay to join the “Jim Cramer Investing Club” (whatever the fuck that is). The best part is the countless times he’s been completely incorrect in hindsight, like when he told everyone not to sell Bear Sterns in ‘07-08 because they’d “be fine”
I might set up a paper trading account and do the opposite of everything he says and see how it goes.

 

To be fair, anyone who sits on TV and talks about stocks all day everyday is going to be wrong a lot. I’m not saying Jim Cramer is Warren Buffet, but the dude gets ripped on a bit too much, and has his fair share of good stock picks as well.

 
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Why do people follow Cathy Wood either? She's more of a joke, in my opinion.

Cramer was at least considered (by some) a bit of a rockstar in the 90s with his HF -- but most of that stopped after he got in trouble.

If I remember correctly, the SEC claimed that he was manipulating stock, because he was pushing stock recommendations (via "SmartMoney" magazine and "TheStreet" which he owned); meanwhile, his HF traded on each position before the stock recommendation was published.

He also (apparently) bragged somewhere about being able to manipulate price by creating hype; and that was apparently noticed, which led to him getting in trouble.

That is the reason (if I remember correctly) that he is not permitted to have a HF anymore, and is restricted to a charitable trust now (e.g. donating to charity).

After he got in trouble, it seems that his performance in picking stock has been almost hesitant/a bit off, which could be relating to some unknown restriction, or trying to avoid some scrutiny, I'm not sure.

To answer the question about why Cramer gets attention:
• Harvard
• Goldman Sachs
• Hedge Fund
• TheStreet
• SmartMoney Magazine
• Radio/TV Shows
• Author of Investing Books, etc.
• Older fan-base who view him as a guru.
• (Check his Wiki for an overview).

While his performance has been lackluster in recent years; he tends to have mostly older fans, who see him as one of the original finance gurus.

I think Cramer getting in trouble back then, really took the wind out of his sails; with deflated performance ever since.

Here is a YouTube video I found of him in 1997, for reference:



Here is a review (2002) of a book that was critical of him, detailing how he ran his HF:

https://www.tradersmagazine.com/news/trading-with-the-enemy-seduction-a…

Investor (30+ years); IB/RE/PE/Corp (MD level); currently, head of boutique private equity firm; principal of family office.
 

Cramer is one of a long line of infotainers, America loves that shit.  He keeps the average dumdum investing and banks love that.

Get busy living
 

You could ask this question about most people that Americans listen to, and the answer would be the same.  People want to be entertained, not informed, and compounding that is that people want their biases confirmed and not challenged.  Jim Cramer looks like someone you should trust (older white guy), sounds like what most Americans are conditioned to think Wall Street traders sound like, and uses a lot of literal bells and whistles in his schtick.  Of course people listen to him!  It's the same reason people tune into Fox for "news" despite the organization being a least a little bit clear about the fact that they don't and won't tell the truth, report the news, or act with integrity.  The people look like newscasters, sound like newscasters, and reinforce the biases of listeners.  So of course people end up treating it as a news source.

 

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