Market Talk

I studiously avoid watching Jim Cramer. It’s not that he’s a stupid man, he’s a very smart man. It’s not that he isn’t a successful man, he a very successful. It’s not that he makes bad calls. Well, it’s not solely that he makes bad calls.

It’s that he’s an insufferable jackass.

So last night he’s on his show, trying to convince his viewers not to panic and to stay with stocks, and he rips Kelly Evans over her Ahead of the Tape column yesterday about auto-parts stores. Now, whether or not Kelly’s right or wrong can’t be decided in one day. Whether or not anybody who writes a column or hosts a show for a living can ever be 100% right isn’t the point either.

It’s not the shot at Kelly that got me. It was the shot at his viewers’ intelligence.

So, here’s Cramer, a guy who as you’ll see momentarily has been massively wrong in the past. Not just wrong, but spectacularly, historically wrong, and he’s on cable TV last night telling people to keep buying stocks:

Despite all the worry, staying in stocks has been the right move every step of the way, and not panicking out on the big down days. No one ever made a dime panicking.

Now, he’s right about the panicking bit. He’s also right about the staying in stocks bit…if the world started turning on its axis two years ago. But it didn’t. Stocks have been a bad, bad bet over the past 12 years, and they are very likely to be a bad bet for the next four or five years.

Look, somewhere, there is some genius who got out in October 2007 and got back in in March 2009 and made a killing. But most people “in the market” are just getting jerked around, and Cramer’s one of the hacks pulling the chain.

Here’s what Cramer was telling investors about three and a half years ago, just after the market hit its all-time peak in October of 2007:

Market players should be buying things even though they are overvalued.

I swear to God. Here’s the link to TheStreet.com’s recap. That’s as bad a piece of advice, as poorly timed, as has ever been offered in the history of giving out stock advice. It probably won’t go down as infamously as Irving Fisher’s comment in October 1929 that stocks had reached a “permanently high plateau,” because Cramer talks so much, it’s hard to remember everything he says. But it’s as spectacularly awful as Fisher’s prediction, and both cost anybody who listened dearly.

But it’s not just that he gave out the worst possible advice at the worst possible time, once.

Here’s a video where Cramer, in his own words, calls the subprime market “completely meaningless” – in the summer of 2007. He laughs at it, he makes fun of it, he ridicules it and the people worried about it.

Sound familiar? Sound like what he said in, oh, October of 2007? Or last night?

Keep in mind, too, this is a guy who got skinned alive by a comedian on the Daily Show, and admitted that everything he does on CNBC is wholly for entertainment. This is a guy who admitted that the stock market is rigged (having worked at Goldman, he ought to know.) But he’ll never say anything that frank on CNBC. He’ll never be honest with his viewers, because being honest apparently isn’t how you get viewers on CNBC. That wouldn’t be good for ratings. That wouldn’t be very entertaining.

He knows stocks are overvalued. He knows stocks are rigged. But he still tells people to buy them. That’s why I can’t watch him.

Addendum: There are two more great examples of Cramer’s prescience in Jason Zweig’s 2003 edition of Ben Graham’s “Intelligent Investor.”

1) Feb. 29, 2000: “The Winners of the New World.” Cramer recommends buying only stocks like 724 Solutions, Ariba, Digital Island, Exodus Communications, InfoSpace, Inktomi, etc. etc., each an insanely overvalued dot-com.

2) March 10, 2000 “The Hybirds and the Brand Names Get the Hook.” On the exact day the Nasdaq hit its all-time high and Berkshire Hathaway hit its modern low, Cramer recommends dumping consumer staples, shorting Berkshire and (again) loading up on dot-coms.

His midafternoon segment on CNBC, “Stop Trading With Jim Cramer,” is very aptly named — depending upon what words you emphasize.