Who is Jim Cramer: Why work in financial services? Jim Cramer entered the financial services industry almost by accident, after leaving brief careers in journalism and law. Then he seized on opportunities to become a major media personality, with a trademark hyperactive, madcap style.
Biography: James J. Cramer was born in 1955 in the suburbs of Philadelphia. As an undergraduate at Harvard, he became editor-in-chief the student daily newspaper, The Crimson. After several years as a reporter on various newspapers around the country, Jim Cramer decided to shift gears and entered Harvard Law School in 1981. While there, he got hooked on watching the newly-launched Financial News Network (FNN), the pioneering precursor of CNBC. Cramer spent every spare moment researching stocks and investing whatever money he could save from term-time jobs, such as being a research assistant to Harvard law professor Alan Dershowitz.
After obtaining his law degree in 1984, Jim Cramer worked briefly but unhappily at a law firm. Then he snagged a job at Wall Street colossus Goldman Sachs as a broker (financial advisor) to high net worth clients. Among the influential clients he gained was Martin Peretz, a Harvard faculty member, owner (1974-2002) of the political magazine The New Republic and a major donor to causes on the political left, courtesy of his wife's huge inheritance derived from the Singer Sewing Machine company. In 1987, Jim Cramer left Goldman to run his own hedge fund, from which he retired in 2001.
In 1996, as Internet usage was beginning to take off, Cramer and Peretz co-founded TheStreet.com, a site devoted to stock picking and general investment advice. Cramer retains a 15.4% stake, says that he never sold a share, and still is a contributor. Peretz has long since left the venture, after disagreements with Cramer over policy.
Jim Cramer leveraged the success of TheStreet.com into becoming a TV and radio personality. This, in turn, has led to books and writing for magazines. Cramer has a long-running association with CNBC, and his current show, "Mad Money," has been on the air since 2005. He even has had occasional acting cameos on TV, and is a frequent guest on talk shows.
Lessons: Jim Cramer provides an interesting mirror image of Wayne Rogers, to some extent. Wayne Rogers started as an entertainer, but became a fulltime investment manager when that career faded. James J. Cramer has gone in the opposite direction. Cramer has used a career as a money manager to launch a lucrative second career as a unique financial commentator who blends analysis with entertainment.
Jim Cramer also is an example of someone seizing opportunities offered by new technologies and new media outlets. He scored an early Internet success with TheStreet.com, then became a household name (and face) when financial TV became really big in the late 1990s. Indeed, his nontraditional delivery--manic rather than measured--has been the chief source of his notoriety.
Because of his fame and his wild persona, Jim Cramer is a magnet for criticism. Numerous articles and studies challenge his abilities as a stock picker. The returns he cites for his hedge fund are questioned, since they have not be subjected to independent audit. (On the other hand, his long associations with wealthy and influential clients such as Martin Peretz and Harvard classmate Eliot Spitzer, now resigned in disgrace as governor of New York, suggest that he managed their money well.) There are also frequent, but unproven, allegations that Jim Cramer tries to manipulate markets for personal gain, since his recommendation to buy or sell a certain stock often results in a sharp short-term advance or decline in its price.
Jim Cramer is also a prime example of a driven individual, filled with ambition and energy. He supposedly earned as much as $10 million a year during his 14 years as a hedge fund manager. By his own account, he has a personal net worth of $50-$100 million. This is more than enough on which to retire, but Cramer refuses to slow down. On the other hand, these numbers suggest that he is a big spender who needs a steady flow of income.
In conclusion, the career of Jim Cramer has come full circle in a sense. He started as a journalist, but his detour into the world of Wall Street has allowed him to return in a much bigger way than even he ever could have anticipated.
