FIN 101: Spotting Gurus, Paid Liars, Fools and Cheerleaders
“If you can't spot the sucker at the table after 10 minutes, leave... it's you. “
“You want winners? You want me to put my Cramer Berkowitz hedge fund hat on and just discuss what my fund is buying today to try to make money tomorrow and thenext day and the next? You want my top 10 stocks for who is going to make it in the New World? You know what? I am going to give them to you. Right here. Right now.
OK. Here goes. Write them down -- no handouts here!: 724 Solutions (SVNX:Nasdaq), Ariba (ARBA:Nasdaq), Digital Island (ISLD:Nasdaq), Exodus (EXDS:Nasdaq), InfoSpace.com (INSP:Nasdaq), Inktomi (INKT:Nasdaq), Mercury Interactive (MERQ:Nasdaq), Sonera (SNRA:Nasdaq), VeriSign (VRSN:Nasdaq) and Veritas Software (VRTS:Nasdaq).
His speech was intended to show investors value in these already very valued stocks. But his speech most serves as the checkpoint in time where the bubble was at its eclipse. After a few more weeks of bubbling, the bubble burst. Lockup periods and greed prevented nearly all from realizing any money and sent many investors into bankruptcy. The NASDAQ plummeted from an intra-day high on March 10th 2000 of $5132 to an intra-day low of $1387 on September 21st 2001, ten days into the aftermath of September 11. Seventy-three percent of the value of the NASDAQ had disappeared in less than a year and a half.”
Jim Cramer on Feb 29th of 2000, keynote speech at the 6th Annual Internet and Electronic Commerce Conference and Exposition. (http://www.kbcafe.com/articles/HTTP.Chasm.pdf)
Learning to spot Gurus, Paid Liars, Fools and Cheerleaders is a valuable talent. Using CNBC, CAPS, the legacy media and the internet to find gurus, liars and fools is a great way to improve and protect your portfolio.
This is a continuation of my post from Friday.
On Wall Street there are people, who make a living by investing and those, who make a living selling financial advice, if those that sold advice actually followed their own advice many would go broke. Steve Forbes-
It is a challenge to find honest people, who have good track records. Then to get them to talk in public can even more difficult. If you are a SUCESSFUL money manager/investor, the MONEY WILL FIND YOU, people are constantly searching for better returns on their money. Nothing sells like success, and success on Wall Street is easy to track.
One of the best books on the stock market Gurus is Market Wizards. Many REAL stock market Gurus in the book avoid the media, attention and provide little insight into what they actually do. They don’t need the media and why would they “give away” their techniques, that made them successful.
I like CNBC. Like any source of propaganda, as long as you understand what is going on, you can find some wisdom and truth in CNBC. But much of what goes on CNBC is cheerleading, BS and propaganda.
I use CNBC to spot liars, fools and Gurus. Many CEOs that come on CNBC, are in trouble, they can throw more “gas on the fire” of a rumor about their company. I think it is a great tool to find troubled CEOs, BS companies and garbage stocks. My CRM underperform came after seeing the CEO on MadMoney, looking at the insider selling plus a good CAPS review, then I UNDERPERORM CRM. (No, position in CRM)
The more a company is shilled on CNBC the more I look into underperforming it.
However, one of my most lucrative trades came off Fast Money, when one of the Meat Heads talked about the problems at ETrade. I dug into it, it turns out the Meat Head was right. I make $8k in one day from Fast Money Meathead, who is wrong more often then he is right.
On the other side: CROX, I was short CROX to early and lost money. When KFine said "LONG CROX", my WAG from her shilling, something was a miss, CROX was CROXed cut by 35% in a day shortly after her plug.
CAPS is a great platform to find/track paid liars. Take a look at the Wall Street Worst.
If you are new to CAPS and looking for ideas, why not take the opposite side trade of a lousy analyst? IMO many analysts are paid shills, who are paid to pump garbage out to the public, so a fund can unload. Why not take a gander in some of their calls and the timing?
Lehman Brothers reiterated its $110 price target for Bear on March 13, three days before Bear got sold for $2 a share to J.P. Morgan Chase.
CNBC August 2006, Spot the: cheerleader, fool/liar, guru here:
CNBC May 9 2008, make a call here: William Ackman, Pershing Square Capital Management and David Einhorn, Greenlight Capital Management: