September 06, 2005|By Matea Gold | Matea Gold,LOS ANGELES TIMES
After retiring from his hedge fund in 2001, he landed a regular gig on CNBC, where he offered economic analysis on the more buttoned-down Kudlow & Cramer. Susan Krakower, the channel's interim head of prime-time programming, said she saw his potential but thought he was miscast. When Cramer told her that he had a nationally syndicated radio show that provided lively stock tips, she sent over a camera crew to film the program.
After watching the footage, "I was like, `Out of my way,'" Krakower said. "I knew organically, innately that this was a hit. But he had to be put in the right environment and he had to be opened up."
In January, he left Kudlow & Cramer, which has continued without him, to develop his new show.
Mad Money often seems like a relic from the flush 1980s, when greed was in. "Let's try to make some money!" Cramer declares at the beginning of each show.
Veteran's warnings
And yet, he frequently offers the kind of cautionary warnings you'd expect from a veteran of the dot.com bubble burst. The show opens with a lengthy disclaimer and he often tempers his advice with caveats about the need to have a balanced portfolio.
"You can't just buy stocks 'cause I like them," he said last month in the exasperated tone of a tired parent.
Still, the formula works because of his relentless, high-adrenaline enthusiasm that hooks traders. When he gets excited - which is most of the time - his voice screeches until he's almost unintelligible and he resembles the plastic bulls he constantly throws at the camera: red-faced, glowering and snorting. (When he's not on air, Cramer constantly guzzles herbal tea to try to fend off laryngitis.)
Steven Brill, who worked with Cramer at Brill's magazine American Lawyer, said that despite the frenzied quality of Mad Money, it serves a serious purpose.
`Honest information'
"If the goal of journalism is to impart honest information from people who know something, it's clearly doing that," Brill said. "It's almost taking the style and pyrotechnics of Nancy Grace and applying it to somebody who has a 180 IQ."
It's clear that Cramer's not embarrassed by gimmicks. On one recent night, he smashed a series of home appliances. On another, he gnawed on steaks from Applebee's and Ruth's Chris Steak House to demonstrate the difference between the chain restaurants. And when he taped in front of a studio audience for the first time in late July, Cramer came out onto the set wearing a straitjacket, escorted by two men in white coats.
"Welcome to CRAMERICAAAA!" he hollered, wrestling out of his confinement.
"Boo-yah! Boo-yah!" chanted the audience, offering what has become the trademark greeting on Mad Money. (It was started by one of Cramer's radio listeners in New Orleans, who uttered it in thanks for the money he made from a stock tip.) The crowd of mostly twenty- and thirtysomethings beamed as they pumped their fists in the air. When they had a chance to ask him a question, they gushed.
"You're a true rock star!" said a man from Florida.
But not everyone remains an ardent fan. When a stock he picks drops - as did Dick's Sporting Goods, which went down 19 percent after he touted it Aug. 15 - many are unforgiving. The Yahoo Finance message boards are filled with furious complaints about Cramer, sprinkled with unprintable epithets.
For his part, he said he feels terrible when people tell him they lost money because of his picks.
"But you can't stop people from being reckless," he said.
The retired money manager said his major picks on the show have done "extremely well." According to a compilation provided by CNBC, the 21 "picks of the week" Cramer has made since April rose an average of 6.24 percent - about double the rise in the blue-chip Standard & Poor's 500 index and slightly less than the small-stock S&P 600 index during that same period.
Learned a lesson
Analysts noted that to get that return, investors would have had to buy the stock at the price it was when Cramer mentioned it - an easier prospect for professional traders than amateurs.
"While the casual investor is still trying to open his online account, these guys have been in and out of stocks five times," Southward said.
Not all who lost money off his tips are embittered. Nutley, N.J., resident Douglas Roberts said he was out a few thousand dollars after buying one of Cramer's picks last month but doesn't blame the Mad Money host.
"I learned a quick lesson: There's no substitute for your own research," said the 44- year-old, a controller at a jewelry company.
And Roberts said he still tunes into Cramer's show several times a week, even though he doesn't believe he'll be able to make substantial profit from it.
"It's just good TV."
The Los Angeles Times is a Tribune Publishing newspaper.
