For Jim Cramer it has paid big to be himself which resulted in having great success including having his TV show called Mad Money that's been running since 2005. Before that he had a previous show called Larry and Kudlow offering their take on what's going on with financial news related to the stock market. He's a regular host on the morning show Squawk on the Street just before the stock market opens for trading and he offers his takes on the current financial news, and he does it with such a great engagement to it where he really lets his personality just be out there.
He's a loud expressive guy that has these funny moments and can be over the top but in a very enjoyable way, showing a side that can make you envision just hanging it with him. He does such a great job taking his job seriously but does so in a very fun and entertaining way and calls himself out on some of his blunders doing an excellent job of not taking himself too seriously. It is possible to be good at what you do and have fun while doing it.
In the financial industry it can be cutthroat where a wrong decision could mean the end of your job possibly even the end of your career but he's able to poke fun at himself where he embraces that there will be bad investment decisions that he and others make which are inevitable, they're just a part of being in the industry. That relates to life in general, we will all make bad decisions which are just unavoidable.
He emphasizes that you just must learn from them to succeed in making money. The way he's able to break down what's going on with financial conditions and can relay that based on certain companies and dives into the details of it where it is informative and engaging that gets you to want to know more. He is able to break down all the jargon to make it very simple and clear. Because of this he does such a great job of empowering others that they can manage their money successfully and he provides clear tools that are helpful to do it successfully.
Empowering others
His approach of educating the viewers is very enlightening and commendable because he tears down the big scary things by providing great perspective and context to what’s going on where it keeps you invested instead of pulling out your money and running for the hills. It's human nature when scary things happen to panic to just be in survival mode, take what you have and salvage it. And in the stock market part of investing is that there's going to be downturns, there's going to be rough periods days, weeks, months, maybe even a year where things are just looking bleak, and he provides great guidance during times like this.
Stock prices and the indices are subject to the market and can lose value ranging from a couple of percentage points to half or more of its value, possibly all of its value. For those in the industry they understand that it’s to be expected, it’s just they don't know when. Before and during times like this Jim provides great guidance from a psychological standpoint that panic is never going to make you money so when investors see that their stock prices have plummeted by 40%, Jim emphasizes to people that's not the time to sell. You don't want to sell at low prices, which could be at the bottom.
If it's a great company with great fundamentals, then eventually the stock price is going to recover. But if it’s an average company with average fundamentals or below average, then it may not recover at those original levels but he will state that even at those low prices that's not the time to sell. Eventually there's going to be a better time to do so to minimize the losses.
The education that he provides, and all that valuable information, equips the average person to have their money work for them. He prepares them mentally and emotionally that there's going to be rough periods and you got to be able to see it through because if not there can be the potential to miss out on significant gains and that's missing out on significant wealth creation.
It’s estimated that the yearly stock market gains come from just a few days a year where typically the 10 worst days of performance are followed by the 8 best days of performance. It’s extremely hard to time the market, knowing when to get out and back in because many of unknowns. So trying to be cute moving in and out could prove very costly.
One thing to note is that back in 1980 the Dow Jones industrial average, which is the 30 most mature, well established run companies was valued at 891 whereas today the Dow Jones is now priced at 34,948. That is a 3,922% increase in value which includes the stock market crash in 1987, the dot com bubble in early 2000, the 2008 financial crisis and the 2020 market crash when much of the world was locked down.
Jim’s adversity
Jim Cramer was interested in finance from a young age and would stay up to date on what’s going on. Even when he was in college his answering machine was greeted by his top stocks that he liked and that would change based on the market conditions. At one point when Jim was living on his own all his things were stolen from his apartment including his checking account information which was drained and was left with just his car. He lived out of his car for 9 months and whatever money he could save he would invest in the Fidelity Magellan Fund every month. Many times, it would be $100 at a time. This just disproves that your willingness and determination to do what you're aiming for can be done even if it's in small incremental steps.
It may not payoff off in the short-term but with enough consistent effort it can and Jim credits much of his success to investing at a young age. Eventually he was able to work his way out of this situation and got into Harvard where he became the editor in chief of the school's newspaper. He graduated and became a journalist but eventually went back to Harvard for law school. He still found his way back to finances providing investment advice to others. His first client was a Harvard Law faculty member that gave him $500,000 to invest which he performed well at and that landed him a job with Goldman Sachs, a premier investment bank.
Then a few years later he opened up his own hedge fund which took a lot out of him, waking up at 2:45 in the morning and in the office by 4 where he would examine all the stocks he picked that performed poorly. While running his hedge fund he and a partner of his started a financial analysis website providing tips and insights on what they thought of the market and while initially it did not take off it eventually become a valuable resource for people who manage their own money to see what the Wall Street pros where doing.
Eventually he closed the hedge fund and led him to hosting shows. In the hour-long show that he has Mad Money he adds that flair to it where while other shows give their take on what's going on, what to focus on, he would make it a little bit more animated with some of his antics. His mission is to help investors make money, to inform them what makes a stock good which is based on how well the company is run.
Investing is not easy, but it is possible by doing bottom-up fundamentals research and staying informed about the company through quarterly earnings call and news. Through the adversity he’s faced, he wants to use that so others can learn. He’s lost tremendous amounts of money and that’s what made him better at his job. Many people who invest in the market now will lose money, but they won’t lose if they are invested in real companies that make money and return it to the shareholders.
Let your personality thrive
Jim just being himself has paid off tremendously. The adversity that he has faced has helped him learn valuable lessons that have served him well. Part of the reason why he's also named the show mad money is because of his emotions getting the best of him and he's learned from it. Ironically he was nicknamed him Jimmy chill because he can fly off the handle at times and this is nice to see because many of us have probably felt that way where we just throw a fit, it makes him relatable, makes him more human where the viewers can see a millionaire lose his cool and know that how we behave is not that different.
What makes the difference is not reacting to the emotion and instead having the composure to figure out what is the next best step. Sometimes what you come to find out is that letting things play out is what is best or responding effectively is best but rarely does acting on your emotion payoff. Most of the time it will prove costly, it can help you survive but not thrive. Sometimes a great company can lose 50% or more of its value but if the necessary work was done to evaluate a great company it will recover and have massive gains. Amazon lost more than 90% of its value during the dot com collapse but its stock performance since it became public has been 178,141%.
Jim shows how to navigate the market, and this can translate to life in general. We know that we all will experience adversity and getting in the right frame of mind will help overcome it. That panic is not going to serve you for the better and if you have prepared yourself well, you can ride out the rough periods. Through his unique personality and allowing himself to just be who he is it really educated many average investors in a way that is understandable where maybe other financial anchors or host might lose many viewers’ attention on specific details to what is going on.
Jim Cramer provides this great way of bridging the knowledge that he has in a very digestible way. So when he talks about specific things that is related to a certain company or the macroeconomic environment instead of just assuming that the viewer knows what he's talking about he'll further explain certain things that might be confusing or complex or off putting to where the viewers can say OK now I understand what he's talking about. Because of this it allows a great fundamental grasp of what's going on. Essentially what this does is it closes the gap from the lack of understanding from those not in the financial industry to those that are, and it becomes less daunting and more about OK I get what this person is talking about.
Final thoughts
What Jim shows us is that it just pays so much to be your full self. To not conform based on what others are doing. While many people might see him as off putting or too much because of his big personality, others look up to him because he does make investing advice a lot more accessible and feel like they're not being talked down to but instead having a partnership.
Be an asset to yourself, by being yourself. There will always be people who will find something wrong with you no matter what you do so you might as well live how you see fit. Tune out those toxic people from your life and focus on being your full self. It will ruffle some feathers but at least you are not walking on eggshells. Jim Cramer is a great example that letting your personality show is a great thing that can uplift others, where others can relate better. Avoid stifling yourself because it will cost you.
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