mad anthony

Rants, politics, and thoughts on politics, technology, life,
and stuff from a generally politically conservative Baltimoron.

Wednesday, April 12, 2006

Why watching "Mad Money" always seems to make Mad Anthony Madder...

I've been known on occasion to go to the gym. I'm not one of those people who has mastered the art of reading while exersizing - it makes me dizzy, makes my head hurt, and I end up getting sweat all over what I'm reading. But I do need to stare at something so I don't look like I'm gawking at college girls in short shorts, so I find myself looking at the TV's in the gym while I'm on the treadmill or exersize bike.

I'll admit that most of what I like seeing on TV at the gym is the kind of stuff I would never watch at home - crappy MTV shows like Date My Mom or Room Raiders or reruns of Charmed (hey, Alyssa Milano + cutoff shirts = crazy delicious!). But sometimes that won't be on, and I'll find myself watching Jim Cramer's Mad Money on CNBC. And usually what he's saying makes me go "huh?".

For those who aren't familiar, Jim Cramer is a guy who ran Wall Street hedge funds, and founded back when everyone was starting dot-com's. Now he has a TV show where he does stuff like burn dollar bills, cut the heads off plastic bulls, and shout BOOYAH while giving people stock advice.

Now, I'm not a big stock investor. I currently directly own exactly one share of stock, which I bought because an online exchange had a promotion where you could get a free iPod if you opened and account and used it. My retirement is in a Fidelity S&P 500 index fund, which doesn't make a whole lot of return short term - but there are a lot of studies that index funds do better over the long term than any attempts to beat the market. Plus, my employer has a very generous retirement program - if I give 2% of my base pay, they contribute 12% - so I figure any gain on it is gravy as long as I'm getting my employer contribution.

But there are a few things I've seen on his show that have made me go "what?". The first was a while ago, where he was talking about how political risk can be good - you can go in when other people are getting out, and make money. I think he was talking about an Israeli company, but the then said something to the effect that "if I could, I would buy stock in Nigerian companies". I'm not convinced there is much upside on Nigeria, considering their biggest export is 419 scams. Fraud is such a part of life in Nigeria that it's the subject of this hit rap video. It's also a country where the state department has warnings to avoid travel, for reasons including violent crimes committed.. by people in police and military uniforms. Not my idea of a good investment. I guess ol' Jim may have been being sarcastic, but investing in Nigeria isn't something I would even joke about.

But I've also noticed the last couple shows he's been telling people to get out of RIM (the company that makes the technology behind the BlackBerry) and to buy Palm. This always strikes me as funny, because I work in desktop support, and every time I see someone with a Palm, I tell them they should consider buying a BlackBerry instead. I would guess there are probably other corporate environments with similarly-minded IT staffs. Part of the reason the Blackberry has been sucessful is that it interfaces well with existing email software, and has a robust BEZ (Business Enterprise) server that can easily manage the units. Palm, on the other hand, is a dying technology. Their big selling point was PalmOS, but the newest Palms are running Windows Mobile. This is like Apple making their computers run Windows (and before someone tells me that that's what Boot Camp does, it's not the same - a Windows palm only runs windows, while a BootCamp mac boots both Windows and MacOS - and Macs don't ship with Windows nor does Apple support it). Palm has basically become another hardware vendor - a Dell or HP or whatever. RIM is selling technology, Palm is just selling commodity hardware, IMHO.

Now I could be wrong - Cramer makes his RIM recommendation based on low growth prospects from RIM. But I think it's important to look at the technology and products of a company, and I can't see Palm doing much anytime soon.

So what is the point of this rant? Well, apparently, people have looked at Cramer's performance and found out you could do better putting your money in an index fund that invests in mid-cap stocks (which most of his recomendations are). And that doesn't even count the cost of the time spent watching his show or the transaction costs of making several hundred stock trades.

So I guess it's not just me. Booyah!


At 5:57 PM, Blogger Muneer said...


I really like Jim Kramer. Fun show. Interesting guy. Lightning round is the best. Good stuff.

Let's make some money. MAD MONEY!

At 4:58 PM, Blogger Muneer said...

Your comment system lags alot. And the comments always bounce back to my email.

Mabye when you had to redo it (the blog) when you lost your domain, you should of switched to wordpress.


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