In Defense of Jim Cramer

Is there anybody more loved and hated in the stock trading community than Jim Cramer?

I doubt it. The guy is a lightening rod, and deservedly so. He's opinionated and isn't afraid to speak his mind. Anybody who takes that approach is going to make some great and not so great predictions. If he's wrong, I've got no problem with bloggers pointing it out.

Not surprising, there has been some intense Cramer bashing in the blogging community. What concerns me is not just the seething commentary, but the misrepresentation of his commentary. For example, Chris Perruna and Tate Dwinnell (bloggers I respect and enjoy reading) both point to Cramer's bullish October market calls, after the Fed had cut rates, and use it to put down Cramer and pat themselves on the back. This does seem a bit hypocrital since Perruna admits he did not follow his own advice, while Tate's model portfolio is down big this month. Anyway, I digress.

How bad were Jim's market calls? If you actually listen to what he was saying, they were fantastic. In fact, if you read my blog, you'll see that I made a boatload of money using a similar approach. In October, Cramer was talking about what to do *going into the end of the year.* He also said, once you get gains, *take some off the top* to lock in profits. Some specific stocks he mentioned were GOOG, BIDU, AAPL, DE, RIG, along with hot stocks from agriculture and energy sectors. You know what? He was RIGHT. Everyone of these stocks could have yielded nice gains if you bought, took profits as the stocks and sectors went up and sold at the end of December.

I am not saying Cramer is perfect. Nobody is. I can go back and find a lot of bad calls he's made. In fact, I could do that to just about anybody, including the bloggers that criticize Cramer (usually for self serving purposes), and myself. Criticism of public opinions is fine. What's not cool is misrepresenting those opinions and not giving credit where credit is due.

Invest Like a Shark

I am currently reading Invest Like a Shark by James DePorre. For those who don't know, Deporre, otherwise know as Rev Shark, lost his hearing, job and wife before starting to trade with a $30,000 stake and turning it into millions.

Thus far there isn't much that I already don't know. However, from time to time it's worthwhile to review what you know to get the mind focused on what's important. For example, DePorre likens successful small investors to sharks, who patiently wait for an opportune time before striking aggressively. I like the analogy and I am already waiting for better setups.

Click on the picture below to view Rev Shark speaking with Jim Cramer about current market conditions.

Today's Trades: MICC, ISRG and SGR

I bought 300 shares of MICC at $100.63. The stock broke out over resistance on heavy volume after their earnings release. I bought today's pullback to the breakout point.

I sold the remaing 150 shares of ISRG at an average price of $310.15 (entry at $276.44, sold first 150 shares at $278) for a $5,056 gain (+12.1%). This one's my trade of the year.

I sold 300 shares of SGR at $72.04 (entry at $68) for a $1212 gain (+5.6%). I still like this one as a post earnings breakout play. I decided to exit because of the "Cramer pop." Cramer featured the stock on his show "Mad Money" last night. I suspect the stock will come back in a little in the coming days.

MICC Chart:

Links (Multimedia verson)

This week's linkfest is made up of videos and sound clips, so make sure to have your volume turned up.

Trading:

Dave Landry market webcasts.

Podcast interview of super trader Charles Kirk of thekirkreport.com.

Interview with chart pattern pro Thomas Bulkowski.

This week in Barrons.

Revealing interview with Cramer on market manipulation.

AlphaTrends on using MACD

Lectures, Speeches and Interviews:

Richard Dawkins on the delusion of god.



Salman Rushie on Islamic extremists.



Warren Buffet is the anti-trader. Here's when he sells.



Malcolm Gladwell (author of Blink) on variability vs. universals.



Physicist David Deutsch on the survival of our species. Fascinating stuff.

Some Clips

What if a great man of the last century – Gandhi, say – had had access to the communications networks of our age when he made one of his most important speeches?" The result is 'Telecom Italia Gandhi', an astonishing 60-second spot that has just started airing in Italy.



Peter Gabriel - Here Comes The Flood, from the Growing Up Live tour, Milano 2003



For football and 49ers fans, an interview with the genius, Bill Walsh. I recently read his book for pure enjoyment, but found myself constantly taking notes that would relate to trading practice.



Barick Obama's Plans for 2008


Jim Cramer on the Colbert Report, January 2007