Why I Owe Jim Cramer
A little story about the early part of my journey
In this post I will be sharing some of my initial struggles with investing, hoping to demonstrate that you never know where your lessons or motivations can come from. Of course, however, this is if you are willing to listen to the universe.
I honestly don’t follow Jim Cramer at all these days but occasionally someone will repost something he said in my timeline. For those of you who don’t know who Jim Cramer is, he is infamous for his terrible calls in the market. Cramer gets a ton of hate. The memes, the anti Cramer index, and the re-posts of his when he said to buy a company that went on to underperform are just a few examples of this. In the spirit of this post, I watched an episode of Mad Money but I’m not sure I learned anything, and I may have lost some brain cells. I will, however, forever remember the video from 2007 when the Financial Crisis was just getting started - “It is not time to be an academic. Get on the Bear Sterns call and listen. He HAS NO IDEA HOW BAD IT IS OUT THERE! NO IDEA! NONE! HE’S NUTS! THEY’RE NUTS!!” If nothing else, Cramer is certainly entertaining and animated. lol
Check out the video here. I watched it like 10 times in the last week and I laugh every time.
Here is my story and my experience with Cramer and why I should send him a thank you card. I hope you enjoy it.
Background
I’ve mentioned before that I grew up in a blue-collar household and we didn’t talk about business, politics, economy, or anything related to finance. When I first started out accumulating knowledge around investing and finance, I didn’t have a mentor. I started by fumbling my way through a ton of noise and my initial exposure was so warped. It was during the days right before the Financial Crisis, full of rising commodity prices, emerging markets outperforming, and gold bugs getting a ton of airtime (it was horrible). As the Financial Crisis took hold, I really struggled to understand the interconnectedness of our world. I remember not understanding why a bank in the US would affect the price of Suncor. At the time, I was just a hard worker still progressing through my career, building a family, and trying to figure this adulting thing out. I was way over my skis, if I am being honest, but I would like to think I am, now, less over my skis.
So many mistakes (not lessons because I didn’t learn from them). I underperformed for YEARS. Yes, YEARS. I vividly remember, one afternoon while looking at my portfolio performance, wondering why I even bother doing this on my own when I can just index. As someone of privilege, I didn’t have a ton of struggles growing up and I didn’t have a great template for processing my emotions. That feeling of failure was very rough for me.
I was a bit lost on how to proceed from that point. I remember having a pile of books that I was going to read, and, at the time, I was reading a Jim Cramer book. I don’t remember which one and it doesn’t matter. I was at a specific point in the book where he was giving his hypothetical advice to someone who was trying to invest on their own and struggling. He had said something along the lines of: “Just keep at it. No matter how hard and how bad things have been. Keep an open mind, keep learning, and stay in the game. Find your style, ignore naysayers. You will be happy in a decade from now that you did.” I honestly don’t know if that’s what it said, but that’s what I heard.
I didn’t read any more of the Jim Cramer book from there. Maybe that was a good thing, maybe not.
My Next Steps
I remember making a list of things to do as I worked through my struggles. I was going to give it one last kick at the can before packing it up and just dollar cost averaging into an index. If I didn’t make significant progress in 18 months, I would wind things down. Little did I know, I was essentially making a quit contract with myself. Here is what I came up with:
Start blogging to put my ideas out there to be critiqued.
Join a local investing club to network with people who are smarter than me.
Find a local company and purchase a small number of shares in them to get invited to the AGM for better exposure.
Admitting that I was where I was with my knowledge in Accounting and Business and start from square one with an accounting book.
Read books targeted on what was conducive for my investing style and personality.
Limiting financial TV to less than 1 hour per day.
I worked through this list, checked my ego, and kept grinding. It was not an easy path, but I gradually started to see progress. My performance was still bumpy, but over the following 3 years I outperformed my index. I was still behind where I would have been had I just indexed from the start, but I could see results.
It took another 2 or 3 years before I “caught up” to the index and a couple more before I was significantly ahead of it. The total time was over 5-6 years to “get ahead” of my benchmark. Crazy, right? All the hours of work put in on top of an already busy life. Of course, I am a slow learner so if you are reading this don’t be discouraged.
Closing Thoughts
While I put in the work, stumbling across that part of the book, at that time, shifted me. So, like it or not, I owe at least some of my success to Jim Cramer. You, of course, are welcome to think what you want of him.
Hope you enjoyed this little story. Thanks for reading my work.
Dean
Awesome, great job on persevering!