Let's Be Fair to Cramer

While my style as a long term investor is very different from that of Jim Cramer, he deserves his due for how he educates the individual investor through his show Mad Money on CNBC and his website TheStreet.com.

Cramer is very passionate about what he does. Witness the "Cramer Meltdown" (click here) on CNBC's Street Signs with Erin Burnette. What you see is a man who cares about the markets and people. Notice his comments that we are spending billions to build homes in Iraq while 100's of thousands of Americans face foreclosure on their homes due to the policies of the past.

Jim Cramer made the cover of the August 20 edition of Barron's. The article questions Cramer's stock picking abilities (click here for the article). I have watched Mad Money on average at least a couple of times a week since the show debuted back in March 2005. To be fair to Cramer, he begins every show with the usual written legal jargon about how investors should use caution in making investments based on recommendations from the show. Cramer goes beyond the legal jargon though and verbally warns watchers not to buy his recommendations in the After Hours market while watching the show. Cramer tells viewers and callers that they need to do their own homework before investing. He waits until his Friday show to make his most speculative recommendations in order that investors have the weekend to do their homework and not rush out and buy the stock. Jim Cramer is also honest about his mistakes. I remember distinctly his reaction and remorse the day after he recommended Dick's Sporting Goods, only to later see the stock plunge.

I have to say that only one time have I ever purchased a stock because Cramer recommended it. I quickly sold the stock for a small profit. I enjoy the excitement of the market. I love to learn about different companies and their prospects. In my area, I really have no one to talk to who shares my passion for stocks. Watching Cramer fills that void for me. I watch Mad Money not for stock picks, but for education, for ideas and for entertainment. Let's face it, Cramer is very entertaining. I believe the entertainment factor is by design. Cramer entertains so he can inform and educate.

I wonder if the Barron's article was the first step in the coming marriage of Dow Jones and Rupert Murdoch to deliver a blow to CNBC as Murdoch's FoxNews plans to introduce its own business network on cable later this year.

As a long term investor I would hope to be more like Warren Buffett than Jim Cramer. That is not to sell Cramer short. I have learned much from him and have spent many hours enjoying Mad Money. Investors should do their own due diligence whether copying Warren Buffett or following recommendations from Jim Cramer, CNBC, the talking heads on FoxNews Saturday Morning Business Block or any other source. The Intelligent Long Term Investor will do just that.