Oops - CNBC's Cramer Said 'Don't Move' From Bear a Week Before Collapse

[ingac70]

After it was announced March 16 that J.P. Morgan Chase & Co. (NYSE:JPM) was purchasing Bear Stearns Cos. (NYSE:BSC) for $2 a share, the stock plummeted over 80 percent at the open of trading on March 17.

But, on March 11, Cramer told an e-mailer not to sell the beleaguered investment bank’s stock on his show’s Web site:

“Dear Jim: Should I be worried about Bear Stearns in terms of liquidity and get my money out of there? --Peter

Cramer says: “No! No! No! Bear Stearns is not in trouble. If anything, they’re more likely to be taken over. Don’t move your money from Bear.” On Jan. 17, 2007, Bear was trading at its high of $171.51 a share. Since then, it has been racked by the mortgage turmoil. On March 11, when Cramer posted the e-mail and his response, the stock closed at $62.97. As of 10:00 a.m. on March 17, the stock was trading at $3.72 a share

http://www.businessandmedia.org/articles/2008/20080317110946.aspx

[Horse with no Name]

1. He is a paid corporate shill

protecting his employers ass-ets.

[AlCzervik]

2. does anyone actually watch his show and...do they take his advice?

between the sound effects and the redbull induced tourette's i cannot for the life understand why anyone watched this fool except for the trainwreck factor.

[JenniferJuniper]

3. He should be taken off the air immediately

[soothsayer]

7. caveat emptor

[insleeforprez]

4. A. the stock market is a guessing game, often

Cramer was wrong, it happens.

and B. You saw this on the Daily Show. Admit it! lol.

[ingac70]

Cramer is almost always wrong...

Its been shown that doing the opposite of what he says can earn you big bucks.

[Quantess]

Hasn't it already been shown that

Chimpanzees throwing darts have given better advice than Cramer?

[Captain Angry]

6. There are numerous studies.

They generally show a random selection of stocks produce a better return than a person selecting stock carefully.

This is because most stockpickers self eliminate stocks based on pricing or lack of knowledge of the firm. The darts method includes them.

There are thousands of people out there picking stocks for funds and portfolios. If you have a good strategy and stick to it, you will generally produce a good return.

Remember, if the market goes down 10% but you only lose 5%, you're still ahead.

[Supersedeas]

15. and yet he has cable advertisers and the chimpanzees have zoo food

[Captain Angry]

5. The video is in the political videos forum.

He's in entertainment. So, he will be fine. I'm sure there are disclaimers before and after that show telling people to consult with a financial adviser before making decisions, so he's got an out there too.

If you've ever seen infomercials where the host is WAY too energetic for the product being pushed, you know where the Cramer mentality came from.

[CoffeeCat]

8. How in the world can we believe any of these guys?

These guys are paid to convince all of us to keep our money in the markets, to
stave off further economic losses.

The only person I really trust, when it comes to finances is Bob Brinker---and Warren
Buffet seems legit, but he hasn't said much lately.

These hottie financial talking heads are part of the corporate elite, and they've all
got tons of money in the markets. I don't think most people get that most of the
talking heads on television are millionaires. Everyone around them, including their
bosses and themselves would be going against their personal interests if said anything
but "Buy! Buy! Buy" and "Hold!".

No one knows where the bottom of this market is.

I'm no economist, but it appears that our economy has not fully absorbed the immediate
losses of the housing bubble and the ancillary economic damage that will happen as a
result of many middle- and upper-income earners living in their parent's houses or
starting over in apartments.

So many sectors will be affected. Furthermore, the dollar is in a free fall, gas and
grocery prices are leaving people with less disposable income, and people are maxed out
on credit cards. Furthermore, banks are not lending money. What happens when the full
brunt is experienced?

It's not going to be pretty and it is IS going to be devastating. Most importantly,
we are not there yet!

We're in the free fall. It has not stopped yet. That is obvious.

We've got to think for ourselves on this one. Sally's "Happy Dollar Chat" won't save us and
she's probably lying or wrong.

People online must band together and discuss this stuff. As I said, I'm no expert, but I know that
the corporate, millionaire talking heads aren't the ones to whom we should be getting financial
advice! That's for darn sure.

[Warpy]

9. Now you all know why I tune out great financial experts

in favor of listening to my own gut. My gut has never let me down. These old boys would let me down constantly were I ever dumb enough to take any of their advice.

[sharesunited]

10. I think you misunderstood Cramer.

The caller had an account at Bear Stearns. Cramer encouraged him not to withdraw his funds from the account, because it is insured by the SIPC, and because Cramer did not want to cause a run on funds at Bear Stearns.

Nevertheless, it was a run on funds which abruptly brought the firm down.

[dkf]

11. Thank you. The OP has it all wrong.

[BlooInBloo]

13. Thank you guys for clarifying what "Bear Stearns is not in trouble" means...

... Dunno where we'd be without geniuses like you.

[Celebration]

12. Correct

He didn't say keep the stock. He said KEEP YOUR ACCOUNT THERE. It was responsible advice for a reporter. Accounts are protected (although the failure of your brokerage could be a huge pain for the personal account).

[On the Road]

14. Thank You --

In all this discussion I had no idea. Makes much more sense. And it shows why simply letting Bear Stearns go bankrupt was not a good idea.