Jim Cramer Quotes: Mad Words for Mad Returns
If you watch CNBC, there is a big chance that you’ve seen Jim Cramer and his show, Mad Money. According to him, “our (the show’s) mission is educational, to teach you how to analyze stocks and the market through the prism of events.” That means the former hedge fund manager turned TV-Talking-head often publicly makes good and bad calls on stocks, and that is why he is both loved and hated by many. Fact is, even money managers make mistakes. No one has a perfect track record in the hedge fund business, and despite his imperfections, Jim Cramer still made 24% average annual returns over his 14 years of running Cramer, Berkowitz, & Co., the hedge fund he started in 1987. Quite amazing, huh? So with that, here are ten Jim Cramer quotes to guide you and your investing:
1. “The danger that we have right now are people who get the same information as I do and, therefore, think they’ll reach the same conclusions that haven’t traded as long, don’t have bear claws up and down their backs like I do.” – Experience is still the best teacher. You can follow all the advice and recommendations of experts, but what do you do when things go wrong? You can (and should) have a contingency plan, but if that too fails, never forget to learn from every failure.
2. “I am doing my best to find it. I will find it before the public finds it. I will get out of it before it’s too late. The reason I will do that is because that’s what I’m paid to do.” – He’s referring to a great company. One with a good story that isn’t obvious to the public yet. This is where research and hard work come into play. For investors, this is your number one job, and self discipline is second.
3. “I think that stocks have been this tremendous, tremendous equalizer for people in this country. Guys who can’t make a lot of money at their jobs have been able to make a lot of money in the stock market.” – This shows Cramer’s belief in the amazing potential of stocks. Although this is very encouraging, make sure you know what you are doing by learning and re-learning the stock market investing lessons that we provide for free at WealthLift.com.
4. “I mean homes are very easy to build and buy. But I think that the idea of saving for stocks is a hard thing that people in this country have embraced.” – Cramer believes that stock market investing should come as naturally as saving for a house. This maybe a big shift in mindset, but this is necessary if people want to be able to retire at all.
5. “I mean it’s the most objective industry in the world. If your numbers stink, you’re out. If your numbers are good, you get more money. It’s the most Darwinian, it’s beautiful, it’s brutal, it works.” – There are good and bad hedge funds out there. When investing, make sure you check the historical performance of the fund and the team behind it. But then again, funds that don’t perform well usually don’t last too long.
6. “I have never for a minute felt it was my stock picking abilities. I feel that my stock picking abilities aided – I was able to pick out which are the good stocks in the good market, but I have been blessed with a great market.” – Nothing beats picking good stocks (or funds), but combine that with a good market and what you get is amazing returns.
7. “You have a class of investors and you have a class of speculators. The speculators historically haven’t been big enough to cause the investors to doubt the long-term vision of stock.” – The main difference between investors and speculators is their time horizons. Unlike investors, speculators don’t play for the long-run. In the stock market, the longer you hold good investments, the better your chances of making massive returns.
8. “I think you’ll do as well as most professionals. Most professionals don’t beat the market. Let’s not over-rate my industry. But if you have time, you can be in good mutual funds that have good records.” – You can’t discount the fact that investing in funds can also be very fruitful. Again, check for historical fund performance and peer comparison before going this route.
9. “The people who are buying stocks because they’re going up and they don’t know what they do, deserve to lose money.” – Any investor who doesn’t do his or her research is like a fool and his money… they are soon parted. “Investing” this way goes by another name, and it’s called gambling.
10. “We are all wrong so often that it amazes me that we can have any conviction at all over the direction of things to come. But we must.” – Investing is a numbers game. Have a system that works over time and have the conviction to trust that system no matter what. If that’s how professionals do it, then maybe so should we.
That’s another wrap on our series on investment lessons from investment superstars. You may love him or hate him, but Jim Cramer has the track record to earn him a place among the investing greats.