Fox News Channel lawsuit In 2000, Cramer and
TheStreet settled a lawsuit with
Fox News Channel in which Fox had claimed Cramer had reneged on a deal to produce a show for Fox and Cramer had counter-sued. The conflict began when Fox complained that Cramer promoted
TheStreet stock on its network without giving advance notice to the program's producer.
Cramer's investments Performance As manager of his hedge fund, Cramer said he realized a "rate of return of 24% after all fees for 15 years," until he retired from the hedge fund in 2001. He self-reported a 36% return in 2000, at the peak of the
dot-com bubble. In January 2000, close to the peak of the dot-com bubble, Cramer recommended investing in technology stocks, and suggested a repeat of the stock performance of 1999. In February 2000, the year in which Cramer said he produced a 36% return, Cramer said that there were only 10 stocks he wanted to own, and he was buying them every day. These stocks were 724 Solutions,
Ariba,
Digital Island,
Exodus Communications,
InfoSpace,
Inktomi,
Mercury Interactive,
Sonera,
VeriSign, and
Veritas Software. He also dismissed the investing strategy of
Benjamin Graham and
David Dodd, and said that
price–earnings ratios did not matter. An August 20, 2007, article in ''
Barron's'' stated that "his picks haven't beaten the market. Over the past two years, viewers holding Cramer's stocks would be up 12% while the Dow rose 22% and the S&P 500 16%." Cramer was criticized for repeatedly giving erroneous advice during the
2008 financial crisis. He recommended investing in
Bear Stearns,
Merrill Lynch,
Morgan Stanley,
Wachovia, and
Lehman Brothers before the stocks fell in value significantly and several went out of business. On August 8, 2008, before the climax of the 2008 financial crisis, Cramer recommended investing in bank stocks. On October 6, 2008, on
Today, when the
S&P 500 Index was valued at 1,056, Cramer suggested to investors, "Whatever money you need for the next five years, please take it out of the stock market." Five months later, the market bottomed at 666, a 36.9% decline. A February 9, 2009, article in
The Wall Street Journal said that trading against Cramer's Buy recommendations using short-term
options had historically yielded 25% in a month. On February 8, 2023, Cramer recommended viewers buy
Silicon Valley Bank stock just a month before
its collapse. On March 10, he praised
First Republic Bank as a "very good bank" in a
Twitter post. First Republic's stock dropped by more than 80% in the days following Cramer's tweet and on May 1, it also collapsed, becoming the third and final bank to fail in the
2023 banking crisis.
Performance of Action Alerts charitable trust Cramer says that, between 2002 and May 2009, the performance of his
"Action Alerts PLUS" charitable trust outpaced the
S&P 500 Index and the
Russell 2000 Index. The charitable trust realized a return of 31.75%, the S&P 500 had a return of 18.75%, and the Russell 2000 had a return of 22.51%. On an annual basis, the trust outperformed the S&P 500 by 7.35%, and the Russell 2000 Index by 3.33%. Paul Bolster said that Cramer beats the market in part because of the excess risk in his picks. "If we adjust for his market risk, we come up with an excess return that is essentially zero", Bolster said, adding that "zero", in this case, means his returns are roughly in line with the risk he's taking on. Another criticism of Actions Alerts Plus was that it did not compare itself to indexes that include dividend reinvestment (as the SEC requires for stock-oriented mutual funds). According to Kiplinger's article "One recent [Action Alerts PLUS] and included a chart, under the headline "Action Alert PLUS is CRUSHING the S&P 500", showing that the picks returned about 39% from the portfolio's inception through last March 31, compared with 15.5% for the S&P 500 over the same nine-year, three-month period. But the S&P figure did not include reinvested dividends. With them, the S&P 500 returned 38.3%." A study by Wharton researchers Jonathan Hartley and Matthew Olson found that in the timeframe of August 2001 to March 2016, Cramer's charitable trust underperformed the S&P 500 primarily as a result of underexposure to market returns in years after the
2008 financial crisis. As of March 31, 2016, Cramer's trust since inception had a cumulative return of 64.5%, whereas the S&P 500 fewer dividends returned 70% during the same timeframe. Wharton finance professor
Robert Stambaugh said he didn't think the findings showed significant underperformance or outperformance when adjusting for a variety of factors, but did say "It's a commendable attempt to dig more deeply into the style that underlies Cramer's stock picks."
"Market manipulation" In a December 2006 interview, Cramer described activities used by hedge fund managers to manipulate stock prices—some of debatable legality and others illegal. He described how he could push stocks higher or lower with as little as $5 million in capital when he was running his hedge fund. Cramer said, "A lot of times when I was
short at my hedge fund ... When I was positioned short—meaning I needed it down—I would create a level of activity beforehand that could drive the
futures." He also encouraged hedge funds to engage in this type of activity because it is "a very quick way to make money." Cramer stated that everything he did was legal, but that illegal activity is common in the hedge fund industry as well. He also stated that some hedge fund managers spread false rumors to drive a stock down: "What's important when you are in that hedge-fund mode is to not do anything remotely truthful because the truth is so against your view, that it's important to create a new truth, to develop a fiction." Cramer described a variety of tactics that hedge fund managers use to affect a stock's price. Cramer said that one strategy to keep a stock price down is to spread false rumors to reporters he described as "the Pisanis of the world", in reference to CNBC correspondent
Bob Pisani, whom Cramer insinuated was able to be manipulated, saying "You have to use these guys." He also discussed giving information to "the bozo reporter from
The Wall Street Journal" to get an article published. Cramer said this practice, although illegal, is easy to do "because the
SEC doesn't understand it." During the interview, Cramer referred to himself as a "banking-class hero".
Recommendation regarding Bear Stearns (March 2008) On the March 11, 2008, episode of Cramer's show
Mad Money, a viewer submitted the question "Should I be worried about Bear Stearns in terms of
liquidity and get my money out of there?" Cramer responded "No! No! No! Bear Stearns is not in trouble. If anything, they're more likely to be
taken over. Don't move your money from Bear." On March 14, 2008, the stock lost more than half of its value on news of a Fed bailout and $2/share takeover by
JPMorgan Chase. On March 17, 2008, Cramer said his statements were made in regards to the liquidity of accounts held at Bear Stearns as opposed to the stock. Cramer said he was not recommending the common stock, but allaying concerns about the account holder's liquidity held in a Bear Stearns brokerage account. Cramer later wrote about the incident: "I did tell an emailer that his deposit in his account at Bear Stearns was safe, but through a clever sound bite,
(Jon) Stewart, and subsequently
(Frank) Rich—neither of whom have bothered to listen to the context of the pulled quote—pass off the notion of account safety as an out-and-out buy recommendation. The absurdity astounds me. If you called
Mad Money and asked me about
Citigroup, I would tell you that the common stock might be worthless, but I would never tell you to pull your money out of the bank because I was worried about its solvency. Your money is safe in Citi as I said it was in Bear. The fact that I was right rankles me even more." An article by author
Michael Lewis for
Bloomberg News said that
TheStreet listed Bear Stearns as a "Buy" at $62 per share on March 11, 2008, which was the same day as the caller's question and a day before the collapse of Bear Stearns. During the
Jon Stewart–Jim Cramer conflict, on
The Daily Show on March 12, 2009, Cramer admitted he made mistakes on his Bear Stearns calls.
Criticism of Barack Obama's policies (March 2009) On March 2, 2009, Cramer said that then President
Barack Obama was on a "radical agenda", and said that was responsible for "the greatest wealth destruction I have seen by a president". In response to a reporter's question, Press Secretary
Robert Gibbs replied, "If you turn on a certain program, it's geared to a very small audience. I'm not entirely sure what he's pointing to make some of the statements..... You can go back and look at any number of statements he's made in the past about the economy and wonder where some of the back-ups for those are, too." On March 5, 2009, Cramer responded to the White House, saying, "Backup? Look at the incredible decline in the stock market, in all indices, since the inauguration of the president, with the drop accelerating when the budget plan came to light because of the massive fear and indecision the document sowed: Raising taxes on the eve of what could be a second
Great Depression, destroying the profits in healthcare companies, tinkering with the
mortgage deduction at a time when U.S. house price depreciation is behind much of the world's morass and certainly the devastation affecting our banks, and pushing an aggressive cap and trade program that could raise the price of energy for millions of people." By the end of Obama's term in office, major stock market indexes had more than doubled from the levels of March 2009. Referring to March 8, 2009, charges leveled against Cramer by
The New York Times columnist Frank Rich, Cramer said that he does not understand how Obama and his staff planned to raise taxes, institute cap-and-trade limitations, and rework the healthcare system all during a recession. The article said: "It isn't that Cramer disagrees with Obama's vision for the country—he even agrees with taxing the rich—but now is not the time to put those plans into action. The president needs to solve our housing, employment, and financial problems, and only then turn his attention to healthcare and changing the mortgage deduction."
Controversy with Nouriel Roubini Cramer wrote in 2009, that
Nouriel Roubini was "intoxicated" with his own "prescience and vision", and should realize that things are better than he predicted. Roubini called Cramer a "buffoon", and told him to "just shut up". Cramer responded by inviting Roubini to appear on his show, and say that to his face. In 2021, Roubini called Cramer "a total f---ing idiot".
Debate with Jon Stewart (2009) On March 12, 2009, Cramer appeared on
The Daily Show with Jon Stewart. Cramer disagreed with Stewart on a few points, but acknowledged that he could have done a better job foreseeing the economic collapse: "We all should have seen it more." However, Stewart played several video clips from 2006 where Cramer discussed the spreading of false rumors to drive down stock prices and encouraged short-selling by hedge funds as a means to generate returns. At one point in a clip from December 22, 2006, he said, "I would encourage anyone in a hedge fund to do it." He called it a very quick way to make money and very satisfying. He continued, "By the way, no one else in the world would ever admit that, but I don't care, and again, I'm not gonna say it on TV."
Criticism of the Federal Reserve (2007–08) On August 3, 2007, in what was described as a "rant", Cramer made a plea for the
Federal Reserve to cut interest rates. Cramer said of the Fed Committee, "They're nuts. They know nothing. This is a different kinda market. And the Fed is asleep." When the transcript from the August 7, 2007, meeting of the Federal Reserve Open Markets Committee was subsequently released on August 28, 2007, it showed that Cramer's comments elicited laughter from participants during a comment from
Dennis Lockhart, president, and CEO of the Federal Reserve Bank of Atlanta. "I believe that the correct policy posture is to let the markets work through the changes in risk appetite and pricing that are underway, but the market observations of one of my more strident conversational counterparts—and that is not Jim Cramer [laughter]—are worth sharing." Cramer was vindicated for his negative outlook when the
2008 financial crisis and the
Great Recession took hold. On
Hardball with Chris Matthews on September 19, 2008, Cramer blamed the Federal Reserve for the
United States housing bubble.
Calling House Speaker Nancy Pelosi "Crazy Nancy" during interview On September 15, 2020, during a TV interview with
U.S. Speaker of the House Nancy Pelosi, Cramer addressed her as "Crazy Nancy", and then posted several tweets in which he defended his actions. He later apologized for using the phrase, which was also employed frequently by President
Donald Trump. During a discussion about the likelihood of a coronavirus relief bill, Cramer expressed doubt over the deal saying, "I mean, what deal can we have, Crazy Nancy?" He then quickly added "I'm sorry, I—that was the president. I have such reverence for the office, I would never use that term." "But you just did," Pelosi replied. The fund gained additional coverage upon
Meta Platforms' Q3 2022 earnings miss and Cramer's subsequent apology, which outlined another loss for the company and was seen by some that Cramer's apology was seen as a sign to buy Meta stock. ==Personal life==