Learn from Jim Cramer: Basics of Stock Investments (1)~Who is Jim Cramer?

I regard Mr. Jim Cramer is my memtor in stock investments. As I explained in my profile page, my pen name, Jun Kurema, is named after Jim Cramer (Slightly modified to make it sounds like Japanese name). In the series of articles including this article, I would like to explain who is Jim Cramer and what is his investments theory.

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1. Author of Investment-Themed Books

I first leared about Jim Cramer when I picked up one of this book at a bookstore. Therefore, I’d like to start with inttroducing this books. Eventually, I plan to write a review of each book, but for the time being I just give your the book title and a brief introduction. I listed his books in a order of recommendation, rather than a chronological order.

1.1 Jim Cramer’s Real Money: Sane Investing in an Insane World

Personally, I consider this book as my bible in investments. I would recommend reading this book to all investors who are beginners to investments. The book was translated into Japanese, and I read the Japanese translation first.

When I purchased the Japanese translation of this book at a secondhand bookstore (Bookoff USA), I had already started investing by myself for a few years and had a couple of questions. And my first impression after reading this book was “it contains everything I have always wanted to know.”

The book is full of advice for individual investors from the perspective of Mr. Cramer who used to be a hedge fund manager for a long time.

This book was first published in 2005 which is 15 years ago, and some of the advices were changed over time, and probably because of that, I do not recall that Mr. Crmer mentioned about this book during the “Mad Money” show (I will explain about the “Mad Money” below). Since the basic principle explained in the book still the same, this book is still the Bible for me.

1.2 Jim Cramer’s Get Rich Carefully

This is most recent book written by Jim Cramer. The first edition was publised in 2013. This is Cramer’s second book that were translated to Japanese (unfortunately, I do not have Japanese copy). The book contains full of this latest advise. Since Mr. Cramer explains during the “Mad Money” show that he has no intent to write any new book, we could not expect to see his new book anytime soon.

He is an advocate of “Buy and Homework” approach, rather than traditional “Buy and Hold” approach. And in this book, he explains how to do the homework. In this sense, the contents of this book is pretty practical. Also, one of the chapters are used to explain chart analysis.

Although he is retired a role of a fund manger of a heage fund, he has been running $3 million charitable trust, and in this sence, he is still actively involved in investments. In this book he explains lessons he learned thrhough runing the Charitable Trust which would benefit poeple who are managing thier own portfolio by themselves.

The contents of this book does not have any overlap with “Jim Cramer’s Real Money” which I mentioned above. Therefore, I would like to recomend this book even if you have already read his ” Jim Cramer’s Real Money”.

1.3 Jim Cramer’s Getting Back to Even

This book was published after the Lehman Shock, and it explains “rules for trying to recover from losses”. It was first published in 2009.

In one of the episode of “Mad Money”, when Mr. Cramer was asked about stock option trading from listeners, he explained that over 100 pages of his “Getting Back to Even” book discuss about the option trading . I recently purchased this book as his such remarks sparked my interests to this book.

1.4 Other books

In addition to above, he wrote following four books.

  • Jim Cramer’s Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer) — Published in 2007
  • “Mad Money: Watch TV, Get Rich” — Publishe in 2006
  • “Confessions of a Street Addict” — Published in 2002
  • “You Got Screwed!: Why Wall Street Tanked and How You Can Prosper” — Published in 2002

2. Host of TV Shows

Link to Mr. Craiers’ profile in CNBC’s site. → Jim Cramer Profile

2.1 Mad Money with Jim Cramer

Mr. Cramer is widly known as a host of CNBC’s oneman show “Mad Money with Jim Cramer” (M-F. 6PM ET).

The show is full of information as Mr. Cramer explains the news of the day and its impact on individual stock prices, gives us investment advice, CEO interviews (almost every show), chart analysis, also answers to questions from viewers (about investments and individual stocks), etc.

I love this show for the following reasons:

  • It explains the reason why a price of the particular stock or the market as a whole moved up or down, the possible directions in the future. Therefore, it will be the reasons for remaining calm even when the move of stock price is volatile;
  • Through interviews with CEOs, etc., we can obtain knowledge about companies you we never known before;
  • It sometimes gives us specific stock price we should look for if we are interested buying the particular stock (e.g., “Buy at this price right now!” or “Buy when the price drop to 25 dollars!” and so on). Therefore, it gives us an idea whether the current stock price is cheap or expensive;
  • As explained later, Mr. Cramer runs the charitable trust portfolio, and during the show, he sometimes mentions which stocks his charitable trust owns (whether his charitable trust owns the stock, just bought, or plan to buy, just sold, etc.). Therefore, we can see to what extent Mr. Cramer like a particular stock.

In my site, I have set up a Mad Money forum (basically, I am merely posting links to articles which summaries of his show and contain video clips of the shows, along with ticker symbols mentioned in the show). So, if you are interested, please take a look the forum. If you are only interested in listing the audio, you can enjoy though the Podcast.

2.2  Squawk on the Street

Mr. Cramer is also one of the hosts of CNBC program ,“Squawk on the Street” (Monday – Friday, 9AM-11AM ET). This show is for people who want to know the movement of market conditions before and while the stock markets are open.

I don’t watch this TV program as I am still working dueling 9AM-11AM, but I try to listen to it on a Podcast when I have a time.

3. Founder of the Street.com & Fund Manager of His Charitable Trust

Mr. Cramer runs members-only investment club, “Action Alerts PLUS” (Since this is a paid-service, I am not using it). Also, he writes daily market commentary for TheStreet’s RealMoney premium service.

As mentioned earlier, Mr. Cramer, who runs the $ 3 million charitable trust, said that before buying or selling stock at the charitable trust, he gives an advance notice to members of “Action Alerts PLUS” using a newsletter. This allows members to take action before the charitable trust takes action. By the way, it seems his charitable trust has decided to “donate all profits at the end of the year would be given to charity”. Therefore, I think at the beginning of each year his charitable trust starts at $ 3 million.

Link to Mr. Craimer’s profile in the Street.com site→ Jim Cramer

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アメリカ(ニューヨーク)に住み始めて17年目です。株式投資、インターネット活動を通して自宅で安定収入を得ることを目指しています。 ▶ 詳しいプロフィールはこちらから。
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I am a Japanese, residing in the US. I am trying to find a way to earn stable income at home through investments in stocks or other products as well as some sort of internet business. ▶ More detailed profile can be viewed from here.
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