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Confessions of a Street Addict (Paperback)
by James J. Cramer
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Hedge fund, Wall Street, Investment banking, Stock market |
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| MSL Pointer Review:
Compelling, personal and obviously belonging to the same league as Liar's Poker, this book is easily one of the best about the Wall Street. |
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Author: James J. Cramer
Publisher: Simon & Schuster
Pub. in: June, 2003
ISBN: 0743224884
Pages: 352
Measurements: 8.6 x 5.4 x 0.9 inches
Origin of product: USA
Order code: BA00099
Other information: Reprint edition
ISBN-13: 978-0743224888
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- Awards & Credential -
National Bestseller (in North America) |
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- MSL Picks -
Jim Cramer falls into the catagory of he who would walk over his own mother for an extra eighth of a point. Yet this personal portrayal of his own full blown neurosis accompanied by his self effacing, almost day-to-day story makes this one of the best books of its kind I've ever read. If you've ever been a trader and been leveraged on the wrong side of a hopeless down market, you'll get to relive your emotions from that hopefully forgotten time. I know that I did, and it wasn't comfortable. But, as egotistical and looney as Cramer is, you can't shortchange his obvious talent.
One of the most compelling segments in the book is where his wife comes back to trade for a day in a horrible W-shaped market where Cramer is about to lose everything (this would make a great movie by the way.) However, in reading it and projecting myself into the situation I must say that she had to be more lucky than good - and she's really, really good. What a story!
It's a fast, riveting, read filled with Wall Street jargon and arcane financial terms. But again, to the trading cogniscenti (?), it's a priceless story. If you're not a Street type you'll just get yourself in trouble should you try to copy he or she, but there's one thing that shines through from here. That is that all good partners cover their other partners' blind spots. To digress, chemistry is often one of the main reasons that pop music groups are popular beyond their good material. However, when they break up and go solo they rarely achieve the kind of success they've enjoyed as a group. It's like McCartney shaping Lennon's raw talent, so evident in his songs, but if Lennon went at it alone he all to often ended up with the Plastic Yoko Ono band banging garbage can lids together. Take Hall and Oates? Who was Oates? But, Hall by himself wasn't the same without the little guy in the background. Nor was Don Henley without the Eagles, nor Lindsey Buckingham without Fleetwood Mac.
Cramer's wife, the acknowledged trading goddess, covered his blind spots and helped polish him into the talent he was. This is a great read and vastly informative, and if you've ever wondered how hedge funds operate on Wall Street, it's terrific. And, it never lets up.
(From quoting Eugene Jewett, USA)
Target readers:
Investment banking professionals, finance majors, investment consultants, MBAs, anyone else who is interested in Wall Street and in investing in stock market.
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Confessions of a Wall Street Analyst : A True Story of Inside Information and Corruption in the Stock Market
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James J. Cramer is co-founder of TheStreet.com. In 1987 he founded Cramer Berkowitz, a private hedge fund that he ran until 2000. Cramer is the co-host of Kudlow & Cramer on CNBC. He is the host of Real Money, a nationally syndicated radio show, "Bottom Line" columnist for New York magazine, markets commentator for TheStreet.com, and author of You Got Screwed! Mr. Cramer and his family live in Summit, New Jersey.
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From Publisher
Everyone on Wall Street knows Jim Cramer, and Cramer knows Wall Street better than anyone. In the most candid and outrageous look at Wall Street since Liar's Poker, Cramer, co-founder of TheStreet.com, radio and television commentator, and for years a premier money manager, takes readers on the wild ride that is Wall Street - revealing how the game is played, who breaks the rules, and who gets hurt.
Confessions of a Street Addict takes us from Cramer's roots in the middle-class Philadelphia suburbs to Harvard, where he began managing money, and then to Goldman Sachs, where he went into business with his wife - Karen, the "Trading Goddess" - as his partner. He brilliantly describes the life of a money manager: the frenetic pace, the constant pressure to outperform the market and other fund managers, and the sharklike attacks fund managers make as they circle a fund perceived to be in trouble.
Throughout the book Cramer is characteristically outspoken, offering his hard-won insights about the market and everyone in it, himself included. There has never been a more eloquent market insider than Cramer, nor a more high-octane book about Wall Street.
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Chapter 16: Crisis in 1998: The Trading Goddess Returns
October 8, judging from the closing levels of the major averages, seemed like a pretty unspectacular day. The Dow Jones Average shed 9 points, around .1 percent to close at 7731.91. The Nazzdogs took it a little worse, losing 3 percent, or 43 points. Thirty-year bonds dropped about a point and a half, bringing their yields to 5 percent on the nose. The dollar got clocked, giving up a big chunk of that year's gains.
But these numbers masked the most important day of the last decade of investing, because on October 8, the bear market of 1998, the vicious, gut-wrenching, horrid decline that had taken stocks well past their two- and three-year lows, and brought some averages down to as low as 40 percent off their highs, came to an end. On October 8, a dreary, chilly rainy Thursday in New York, a day so out-of-kilter that even the Dow Jones Averages didn't trade at the opening (that was the day that Travelers switched into Citigroup, causing a confusing delay that kept people in the dark about the true prices of the averages until a half hour into trading), the stock market bottomed.
At eighteen minutes after 12:00 P.M.
I ought to know. I caused it. At 12:18 P.M. I capitulated. I couldn't take it anymore. I gave up both literally, at my fund, and virtually, on my Web site, TheStreet.com, where I penned a piece entitled "Get Out Now." And the prop wash from that article marked the low point in the most vicious bear market of the last century.
I didn't set out to capitulate that day. My spirits had been buoyed by the return of my wife to my trading desk after an absence of four years, and she had generated the first trading profits we had made in weeks and weeks and weeks. The day before had been our first outperformance day versus the NASQAQ in many months. I came in that Thursday thinking we were going to be cool, despite a breathtaking combination of $100 million in losses and $100 million in pending redemptions that had reduced my $325 million hedge fund that I had run successfully for a decade to a pitiful $100 million fund that was down 35 percent and in danger of going under if it didn't raise millions upon millions in cash.
I came in that day as one of the last of the bulls. I thought the market had gone down so much that it had to be near a bottom. I thought, even though we hadn't sold much of anything, we could make it, somehow, without selling and without capitulating. I thought we would be able to ride out the once-in-a-hundred-years storm that had decked so many hedge funds, and do so without having to bolt from the stock market and sell into the abyss, into the cataclysm of the market's mean, miserable maw. I came in thinking that, like Shackleton's crew in Endurance, we may not get to the South Pole, but we were going to come out unscathed and looking great and that a floor on the market was truly at hand. It had to bottom. It just had to.
I was wrong. By a minute. And by a mile. This is the story of how that bottom got formed over my own panic and my own personal crescendo of pain.
The day didn't start out ugly; the ugliness from the day before never ended. When I arrived at a quarter to four in the morning, booted up my Bloomberg and my ILX and hit my European trading wires, I saw that the bottom had fallen out of the Nikkei, as the Japanese benchmark lost 799.55 points, or 5.8 percent, wiping out a promising 6 percent gain from the night before. For weeks on end our market had been gyrating lower, but the possibility that Japan, long mired in recession, might be finally getting its house in order offered hope to some funds looking to that nation to help end the international financial crisis that had started more than a year before in tiny Thailand and had since engulfed all of Asia, Latin America, Russia, and with Long-Term Capital's demise, this country too. I had begun to put money in Japan. A small position in Mitsubishi Bank of Tokyo I had put in late last month to play the world's best acting bourse was now even smaller as of last night. I didn't even bother to get a closing quote. I knew it would be down substantially. Sayonara capital! The Japanese market was never to recover from the decline and still hovers lower than that sell-off today. If the world's other bourses were going to bail me out that day - something I desperately needed - it wasn't going to start in Japan.
Germany had given up 4.5 percent overnight, erasing the remnants of its once monumental gains for the year. I had been looking to Germany as another source of a turnaround. Nope, not today.
But the true slap in the face came from Britain, where the Footsie - the FTSE - plunged 196 points, or 4.1 percent, crashing through the seemingly impregnable 5,000 barrier, despite a rate cut by the Bank of England that very morning. Too little, too late, the market said. I had told my wife that I thought the British might cut rates, that the worries we had were spilling over there. Britain had been one of the remaining pillars in why I wanted to stay bullish. Rate cuts mean everything to me. When they happen, I want to buy, not sell, and I told her that when she came in at 8:30 she would most likely be greeted with a rally caused by the U.K. cut. We had gotten the interest rate reduction, and all that happened was an acceleration of sales overseas. That wasn't part of the plan.
The moment my machines glowed on after boot-up, on that drizzling depressing morning, the S&P 500 futures told the full story: down 24 points, a huge discount to where they were the night before. That's "down limit," a term borrowed from the commodity markets indicating that things had fallen as far as they could legally go at that moment until the index itself that the future was based on began trading. It was the most I had ever seen, a crevasse that made you tremble as you peered for a bottom. And that wasn't the worst of it. The dollar, the strongest currency in the world the week before, had started skidding suddenly with value vaporizing as if it had tripped an invisible claymore mine. Until the decline in the buck, bonds had marched seemingly inexorably toward 4 percent. Now they had whiplashed traders and were headed back full throttle to the 5 percent benchmark. As someone conditioned by sixteen years of trading that any declines in bonds and currencies were bad news for stocks, this reversal seemed outright lethal for our portfolio. Dollar, bonds, stocks, all going the wrong way at once - at warp speed! "Can't anybody here play this game?" I asked the empty trading room. I couldn't believe that in this environment we were going to have to redeem our departing partners' cash. I couldn't believe that I actually thought we would have an up day in which we could do our selling in tranquility, and not chaos.
The contrarian in me might have wanted to make a judgment that things were finally so ugly that you had to step up to the plate and start buying, that the market would open so low that prices would finally reach some sort of equilibrium. But just about anybody with a cast iron constitution would be shattered early on by what brokers were saying around the Street. And, after the beating I had taken, I had a more nervous stomach than just about anybody in the game that morning. I had steeled myself for days on end about why all the bears would be wrong and why this market had to bounce. I had written endlessly that we were on the verge of a bottom and those who got out now would be known as quitters, fools, and phonies when the market roared back. I was polishing the bull's horns daily. Yet when faced with bright red stimuli this gray morning, I felt myself wavering and for once I couldn't stop the feeling. Not with that redemption deadline beckoning.
As my traders and assistants filed in I learned one piece of bad news about the market after another. First, Prudential, the giant brokerage, pronounced the market inherently unstable and ready to go much much lower. Ralph Acampora, the firm's chief technician, had cemented his reputation as an astute market caller earlier that summer when he pronounced the bull dead, expecting the stock market to decline some 2,000 points. Now we were at his price target. I got all excited for a moment when Sal asked me if I wanted to hear Ralph's new comments. I figured this could be it, the first man willing to stand up to the selling onslaught. His hands were clean. He could say that the market had reached his downside target and was ready to roar right back. I half expected him to do so. It would have been a master stroke. And it might bail me out of my redemption deadline without much bloodshed.
Nope, nothing came easy that year. In the heat of battle price targets have a way of getting adjusted, and this morning, looking at the futures and the action overseas, it was time for Acampora to take that target down. Once a raging bull, Acampora was this very morning trying to stake out a role as Giant Smokey in the brutal bear market of '98. He announced to his sales force that his Dow target, which had been 7,000, was now going to be 6,735. Those, like me, who thought that we would now bounce from Acampora's floor, saw the floor pulled out from underneath us. And this from someone with high-stakes credibility forged during years of bullishness ahead of this sell-off. The futures would have sagged visibly after such a call, if they hadn't fallen as far as they could legally go before he made his call. Who knew where the real market was.
Goldman Sachs's Abby Joseph Cohen spoke too. As if I hadn't learned my lesson yet, when Rich, my Goldman broker, buzzed me to say that Abby was coming on the squawk box (the P.A.) at Goldman, my heart paced rapidly and a grin broke through my indelible frown. Ah-hah, I said to Jeff, whom I had barely acknowledged that morning because he too had believed my thesis that we could be in for some lift, "Abby's going to put a stop to this decline right now, stop it in its tracks."
What a clown you can look like in this business, within seconds! My smile turned to anger and I mashed my phone into the side of my personal computer when Rich said, "It's not good, Jim."
Cohen had stayed bullish throughout the painful summer, not wavering for an instant from her Supertanker America thesis that our nation would pull the rest of the world through this financial crisis. Every time she spoke, she turned around the futures, or broke the nasty selling waves, as she explained why panicking was wrong and we were in a rip-roaring bull market. She was my bullish soul-mate, someone who made me feel comfortable holding onto the horns while others fled for the Kodiak dens. Unlike Acampora, Cohen is no technician. Her work is based on the future earnings power of the market as a whole. As long as she stuck by her theory that corporate profits would be bountiful, she would stay bullish.
On this particular morning, when I was in need of Abby's most bullish of Supertanker America calls, she made an adjustment to her corporate earnings view. An adjustment down. She took her S&P projections for the following year down a tad, just enough to cause another landslide. In a market that had come to see this frumpy curly-haired nerd as a double-hulled supertanker herself, this change jolted those whom Cohen had steered through choppy waters before. It seemed like a warning that the biggest ship of all, the U.S. market, was just as vulnerable to the financial storm as any leaky rowboat. No supertanker, just a Cunard liner headed for an iceberg.
Cries of "Cohen's getting off" echoed through trading desks worldwide. No matter that she didn't predict a decline in equities, just a decline in earnings, the move seemed like a prelude to the most important bull-to-bear switch this market had seen since once perma-bull Elaine Garzarelli yelled crash from her Lehman perch on the eve of 1987's one-day decline of 508 points. You had to get in ahead of a guru switch, not after it. While the futures couldn't trade lower, I heard brokers tell me that they had merchandise for sale off Cohen's call that was 5 and 6 points below where stocks traded before last night's bell. In another frame of mind I would have noticed that you get that kind of capitulation only at important moments in stock history. This time I just cursed myself that I would soon have to join the sellers because we had to wire out $106 million to my departing partners. I was formulating a way to capitulate with dignity, something that is akin to trying to arrange the egg on your face so it looks less scrambled and more sunny-side-up.
If anyone didn't yet recognize the sinking fortunes of financial companies, Citigroup picked this day to announce a staggering loss, even worse than had been anticipated during a previous intraquarter profit warning. The newly created institution fessed up that it had a Long-Term Capital-like global arbitrage unit that had racked up $300 million in losses previously known to the top brass. The Street buzzed that the isolated collapse of Long-Term Capital must not have been as isolated as we thought. Who else had to take a charge? If Sandy Weill took a charge, someone else had to be hurting, hurting far more than Sandy. He's good! Who else had to fess up about this leveraged lunacy? We had been battling with the financials for months on end. Fortunately my wife had us short Citigroup just the day before, as a hedge to all the other banks and savings and loans we owned.
Unfortunately, it was only 50,000 shares short. Not much protection there when you are long about 15 million shares of less-well-run financial concerns.
Those looking for hope from the tech sector, which, until this day, had been holding up somewhat better than the rest of the market - save Cisco, which was still reeling from that Cowen downgrade two days before - had their hopes crushed right up front too. The Washington Post reported that morning that the Justice Department had more ambitious goals than just to rein in Microsoft's Internet plans. The stock of Mr. Softee, which had stayed strong throughout this period of turmoil, was indicated down 2 or 3 points at the get-go. We had owned 100,000 Microsoft going into that morning as well as 750 Microsoft calls. Supertanker Microsoft. It was our largest nonfinancial position. We looked to be in the hole for 500 Gs for that one position alone. It was offered down 6 points on the article. You could buy millions of shares there. And there were no takers.
Those who had been playing the Net couldn't even count on a rally, as Yahoo!, which at that time was known only as a search engine company, had just beaten the earnings estimates by a whopping 6 cents the night before. This was the first pure Net company to turn a real profit. It was amazing to this Netizen, a blow-away achievement. I figured a profitable Yahoo! could withstand any selling onslaught. Nah, it was looking down a dozen points! It hovered at close to $100 a share. It had been at $125 at one point the day before. The judgment of the Street spoke loudly: upside surprises don't matter when you are faced with thermonuclear meltdown.
Need more negative input? Merrill chose this day to downgrade the airlines, despite a 40 percent decline from the top already this year, based on worries of an economic slowdown. This group, under pressure for weeks, looked set to roll over again. The cell phone stocks, another set of darlings for this entire bull market since 1990, got axed from Merrill's recommendation list that morning as well. It downgraded both Ericsson and Nokia, and the latter was already down 8 in Finland. Merrill said Nokia, the bellwether for the industry, had slowing sales. Huh? I made the Merrill broker put the phone to the speaker. I couldn't believe what I was hearing. I loved these stocks. These companies were doing fantastically right now. Where did this analyst get this info?
We dodged the airline bullet, but the Nokia downgrade caught us like a dumdum right in the temple. We owned 59,000 Nokia. "Why do we own Nokia?" Jeff asked before he even said hello when he staggered in at 5:45 A.M.
"We owned Nokia," I said, "because as of yesterday sales are smoking. We just got that update."
Jeff glowered. "Merrill says they aren't."
I said, "That's news to me."
Jeff, increasingly frustrated by any attempts we made to make money on the long side, said, "So what, Merrill says they're not." I wanted to buy. Jeff reminded me that at 1:00 P.M. that afternoon we would have to send out a huge chunk of our fund and it wasn't the right time to buy. No buying allowed.
As each broker came in the news got worse and worse. J. P. Morgan, out of nowhere, suddenly came out with a call that because of the credit crunch we were going to go into a mild recession in 1999. Until that morning people had been expecting a robust economy next year. Now we're talking about a recession. "They have to talk about a recession today?" I asked Jeff.
"No time like the present," he deadpanned.
For years, ever since Bill Clinton had brought my old boss Bob Rubin to Washington, we looked to the nation's capital for good news for the economy. On October 8, though, for only the third time in history, the House of Representatives was set to vote on impeachment hearings and the Democrats, sensing that things had gone badly awry, seemed resigned to go along with Republicans' call for a full-blown proceeding. Throughout the morning there would be speeches from politicians from both parties pointing out that no man was beyond the law, not even the president. All morning, any time the market looked like it wanted to rally, a Republican would come on the tube and talk about grave times for the republic.
It was into this cauldron of gloom that my wife bounded in, about 8:30, brandishing some Martha by Mail catalogues, a couple of pieces of fresh fruit, and a completely unnecessary, I thought, in my paranoid fashion, mocking smile. "Hey, chum, looking glum," she said to me. I told her that the world looked like it had caved in overnight and we were already losing millions...
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Karen Corn (MSL quote), USA
<2006-12-25 00:00>
My husband and I took turns reading this book aloud to each other, which meant we spent basically a day in front of a roaring fireplace, snowed in and riveted by the memoirs of a guy who defied normal human behavior.
First off, how many kids start off in life fascinated by the financial section of the newspaper, let alone making pretty shrewd jusdgments of which stocks would be wise investments? How many try to get their fellow students to play "the stock market game" (he didn't succeed in getting them to do so in spite of his game attempts). How many grow up and get a Harvard law degree and chuck it to work on Wall Street, grueling by most people's standards, high stress, high risk, etc?
What struck me about this book were several things:
1. Cramer is a far different person within the confines of a book than he may appear on tv. Yeah, he admits to craxy behavior, workaholism, talking business while on vacation and even during the delivery of one child...but at least he isn't there shouting and sweating and leaving the impression he is about to have a heart attack, right there, on air. Yes, he admits to having tantrums, trashing keyboards, throwing bottled water at people, etc. But hey, he is at least admitting this!
2. His wife is the woman behind hin and perhaps the major reason for his success, since she pulled him out of a major tailspin..according to his account. Either he is a very savvy husband or he is wise enough to give credit where it is due.
3. He finally wakes up and realizes the costs of his behavior, after alienating a good friend (they make peace afterwards), talking business during a funeral, etc.
If you are buying this book to learn the details of trading and Cramer's "method" you'll have to read between the lines. But this didn't matter to us. Take one excellent writer, some superb anecdotes, tons of humor and some moments that give a whole new meaning to the words "risk tolerance"...and you have a wonderful book, perfect for even those who think they'd never want to read about a guy in the financial/ hedge fund business.
And yes, we have started perusing the financial sections of the papers more closely. So there's that, too. |
G. Shikodra (MSL quote), Canada
<2006-12-25 00:00>
I'm not mad about Jim Cramer and I guess I'll never be. His brash, arrogant, loudmouth way of commenting on different business or even political issues on tv, whether it's on "Mad money", "Kudlow and Cramer", "Squawk Box", "Good morning, America" or any other television show he's ever been on can get on my nerves sometimes. As a matter of fact, it's not so much his comments rather than his behaviour, his body language and his way of making a point that grate on me.
But he is one of the very few investors/traders that I have ever heard say "I was wrong about this stock or this company, and I don't have any problems admitting it", and I give him credit for that. The guy seems, if not honest, at least sincere to me. And I guess brashness, arrogance, sincerity, his loud mouth and the fact that he craves public attention make of Jim Cramer a highly colourful, flamboyant character. I'm always interested in what he has to say, even if I don't agree with him: sometimes, when he's on tv, the guy can be downright funny in his own way!
And so, not very enthusiastically I picked up this book and began reading it on a rainy weekend. Contrary to some of the readers who have posted reviews here at Amazon.com, I didn't really expect to learn any valuable trading methods or technical stuff, since the book's title is "Confessions" and not "Methods". No, as a matter of fact, when I think about it, I did learn something original. Cramer's idea of visiting department stores to find the next big thing and asking the right questions to the store clerks was very amusing to me.
This turned out to be a very honest, sincere and interesting book indeed. I was amazed by a few things in particular though:
1-Dedication, hard work and brains do pay in life. But that's not always enough. Sometimes you have to be lucky too. And Cramer was lucky, and he still is. His luck is called Karen Backfisch, and he is honest and humble enough to admit it. I mean, how many times did she bail the guy out? Reading the "Crisis in 1998" chapter, I almost felt I personally lived every infinitesimal instant of that crazy October 8, 1998 with Mr Cramer. Where would he be now, had the trading goddess not returned to the desk just for that day? "Hey, chum, looking glum!"... Sometimes all you need is a divine intervention.
2-I would have never thought a guy so successful in making money for himself and others could be so naive and blind as a bat in his relationships with business partners or close friends. That Ravi Desai story is quite revealing in this regard. It lead to Cramer's falling out with the guy who started it all for him, Marty Perez, and that too is unbelievable. Once again, his wife seemed to understand relationships and sense betrayal and disloyalty much better than he did.
3-I simply couldn't believe how unhappy and miserable this man was. I mean the guy almost had no life, he was constantly yelling and screaming, smashing cell phones and keyboards, calling people names; he misses his sister's marriage and talks about call positions on the phone while his mother lies dead in front of him...How miserable can you be? I think Howard Kurtz resumes it very well in his book: "It's amazing that a man so wealthy and successful can still be so manic and miserable!"
4-Again, I wasn't disappointed by the lack of trading methods or technical issues in this book. One little remark though: I thought cutting your losses short and being ok with some losses from time to time were "generally accepted trading principles" in the trading/speculating/investing world. Well, oddly enough, these two don't seem to be Cramer's principles. The guy takes losses personally, small and big ones, and he seems driven by emotions almost all the time. I thought that was something every trader tries to avoid. But then again, I guess that's ok. Mr Cramer has made millions over the years, so he must have had a bunch of other golden rules.
Many people couldn't wait (and I guess they still can't) to see Jim Cramer go to jail. Good Lord, people, you only have to blame yourself if you did poorly in the market during the last years. Cramer was pumping stocks he owned on various shows? He wrote "it's time to dump everything" in his recent column? He said he loved this company and hated that other stock during his last appearance on tv? So what, quit listening to him and start thinking independently! What do you think the analysts at Goldman, Merrill, Fidelity or Schwab have been doing over the years? Their buy/hold/sell recommandations can move the market, but sometimes the stocks don't go in the direction they expected or predicted them to go. Should they go to jail too? |
Tom Mongle (MSL quote), USA
<2006-12-25 00:00>
James J. Cramer (Cramer & Berkowitz, TheStreet.com, CNBC's Kudlow & Cramer) takes you to a stock market trader's hell and back in "Confessions of a Street Addict." The analogy of investing being a war zone was coined at least 70 years ago with Gerald Loeb's "The Battle For Investment Survival" (1935). And you can't make it through the pages of this book without realizing what a battlefield it is. No book comes closer to approximating the giddy highs or heart-wrenching lows that trading puts a person through. The glory of victory and the agony of defeat are never more real as Cramer bares the trader's soul.
The book reads almost like an adventure novel - ricocheting from one crisis to another, each scene set up with hero and villain, with Cramer not always coming out on top. He starts you off with his basic biography, of being a teenage stock picker (paper trader), of his march through journalism (which shows in his writing), of Harvard Law, and eventually to Wall Street's most intense stage of conflict - the hedge fund.
The beauty of this book is that you get the fly-in-the-brain's view of how traders think (or don't think when their emotions get the best of them), how Wall Street really works, and how it all congeals together to produce the daily statistics. You are there as Cramer learns the ropes from his wife-to-be, The Trading Goddess, Karen Backfish. You sweat with him as he does deals, takes chances, high-fives victories, and crashes so low with failures he could probably seep out under the door unnoticed. A lot of the things you learn run counter to what the official Wall Street line wants you to know - the inside story of the blow-up of LTCM, and how analysts, brokers, and fund managers continually jostle each other for positions of power and influence, and profit.
The most interesting part of the book is being there as the Internet springs to life in the mid 90s - the wild enthusiasm and the unbelievable cluelessness that much of the Internet was built upon. But it was built, and it was built by the types of people Cramer came in contact with regularly - half geniuses, half dreamers, and half con men. And you're right - most of the time, it didn't add up.
Cramer, in addition to being a market manic, had a populist's belief that the little guys should have the same access to what the big guys had, and that the technology was now here to make it possible. TheStreet.com was the result. It's still here - one of the survivors, as is Cramer.
A lot of the book is a sad commentary on how far an addiction can twist your life around. Cramer chastises himself for talking stocks beside his mother's deathbed, his tumultuous relationship with his benefactor Marty Peretz, the destruction of computers and equipment and abuse of employees when the market went against him, and how he deserted his family for the sake of "the game." He simply couldn't stand to lose. In the end, he had enough common sense (though he makes it clear that his wife was always the steady rock in their relationship) to quit while he was ahead.
I particularly enjoyed Cramer's honesty at the extremes, (the emotional soul-wrenching limit) especially the bottom in 1998 (when he caved in - "sell everything, the market's gonna' crash - it's the end of the world"), and at the top in 2000 (when he publicly announced Internet stocks would live forever), and Cramer's final tantrum with the market on 22 Nov 00 when he met his match in a long Brocade position (I quit!). Each time, Cramer was so sure he was right, nobody or thing could dissuade him of his fallibility. But each time, it was his wife (1998), or reality (2000), or, finally, his own cathartic understanding of himself that led him back to humility... and humanity.
Given his personality, one must believe that if he had taken up stamp collecting, little would have changed, and it would be the philatelic world which would have had to live through Cramer's manias. Summing up his career, Cramer quotes his wife's 1998 pronouncement as they recovered from nearly panicking out at the bottom: "It's better to be lucky than to be good." However, with the success Backfish and Cramer had, I expect their luck was more of the variety of being smart enough to be at the right place at the right time than that of a pure roll of the dice. Good traders aren't just lucky, they're good. And Cramer was good, even if he was an addict.
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James Garrett (MSL quote), USA
<2006-12-25 00:00>
James J. Cramer, opinionated and bellicose founder of the Street.com and hedge fund manager distills his fire-breathing personality and stock-market enthusiasm and serves it up in this riveting and compulsively readable tell-all of Cramer's life and times on Wall Street.
Cramer rips through his early life as a young Pennsylvania kid fascinated with stocks, zips through his years as an undergrad and burgeoning journalist at Harvard, shoots through his days as a rookie reporter at the L. A. Herald Examiner and his nights sleeping in a battered Ford Fairmont - and by page 14, we're already knee-deep in Cramer's passion, the stock market.
Cramer writes engagingly and keeps up a roaring pace, and reading his material is like being ensconced inside the guy's feverish, always calculating head. It's about as close as most will come to having a seat at a hedge-fund trading desk, and whether you're just interested in the Market or have years of experience, you'll find Confessions a tasty and addicting read.
The writing is amazingly candid, and the most refreshing thing about "Confessions", apart from the fact that it's rippingly good fun and fine writing, is Cramer's honesty. For all his bluster and arrogance, and for all his consumptive attention to outperforming the indexes and his rivals (and for better than 13 years, his hedge fund Cramer Berkowitz did just that) Cramer is willing to accept the lion's share of the blame here. Who threw bottled water and telephones at the heads of his henchmen on bad trading days? Who pancicked and wrote a capitulatory "get out NOW!" article on TheStreet.com on October 8th, 1998, just as the worst had occurred and the markets were beginning the roaring rally that would not end until 2000? Who, surprisingly, had abolutely no clue what was going on in the company he had poured his name and his money into, and didn't have any kind of feel for the circus of the coming IPO?
Cramer, Cramer, and Cramer. There are really three Jim Cramers in "Confessions": Cramer the trader, Cramer the stock-market commentator and journalist, and Cramer the dot-com businessman and New Economy darling. Guess which "Cramer" gets him in the most trouble?
But let's cut to the chase: Confessions of a Street Addict is loads of fun and a wild perch to look out on what has been a real revolution in the financial markets; Cramer's honesty, experience, wide-ranging connections and candor make this the funniest and most introspective book on Wall Street since Mike Lewis wrote "Liar's Poker" - and hey, Lewis even has a cameo role in Confessions, in which he's credited with coming up with the name "TheStreet" for the company that became TheStreet.com.
That's just one character in a roster that looks like Who's Who of Wall Street, 1982-2003: Cramer meets up, socializes, trades and schemes with Robert Rubin, Roger Ailes, Joe "The Big Kahuna" Kernan, David "The Brain" Faber, and Mark Haynes.
He crosses swords with Barron's Alan Abelson and Money's Frank Lalli, and engages in the time-honored Wall Street passtime of making fun of the corrupt Dan Dorfmann. During his Harvard Law years, he works as a research grunt for high-powered defense attorney Alan Dershowitz, putting together briefs on the Klaus von Bulow case (and, apparently, played by "some Indian guy" in the movie "Reversal of Fortune"). He gets interviewed by Oliver Stone's research henchmen when he's a salesman at Goldman Sachs, and, according to Cramer, serves as Stone's inspiration for getting Buddy Fox in to meet Gordon Gekko in "Wall Street". He even opens his uber-restrictive hedge fund up for redemptions when a major client, Elliot Spitzer (then running for Attorney General of New York), asks to withdraw some funds to fuel his campaign, and suffers a nearly disastrous run on the fund that almost swamped him.
But the real attraction of "Confessions" is the way Cramer weaves his life and career into the seminal events that have defined modern Wall Street and moved us through a financial revolution, and we get a trench-level tour of the really seismic events: the 1987 Black Monday crash, buying into the 1991 Iraqi war, the implosion of Long Term Capital Management, the Asian Contagion and Russian collapse that nearly ended a 16-year old Bull Market, and the stock bubble that defined the twilight years of the "New" Economy.
Having read Confessions, I thank God for a man like Jim Cramer: it shows me our hard-charging capitalist system is still working if it can produce a man like him. Cramer's chief virtue is that he says what's on his mind, an attribute, noble as it is, that got him in trouble in the SmartMoney event that he chronicles. In a way, Cramer is like Wall Street's answer to G. Gordon Liddy, a man who says and does what he pleases, and damn the torpedoes.
And Cramer is, was, and always will be a tireless and funny stock promoter, and his enthusiasm is infectious: if you aren't already gunning for equities and watching that ticker, you will be after you read this book - just be careful to take the lessons herein to heart.
Confessions of a Street Addict is a high-octane shot of raw adrenaline and compulsively addicting, and provides a 20 year ride inside the mind of a premier hedge fund manager - for that alone, it's worth the price of admission.
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