The Cramer Video: I call BS
I know everyone's got the panties in a bundle over the so-called "bombshell" video in which Cramer purports to explain how to manipulate big stocks like RIMM, but unlike most of the indignant, including some of my colleagues, I don't buy it.
Do fund managers try and do stuff like this? I'm sure they do. Every day. They email me once in a while with "leads" about companies that are about to do great things, or companies that are faking it.
Is this successful? I highly doubt it.
Think about it for a second, folks. If Cramer can move something as big as RIMM "a percent or two" as he claims, by planting a story with the "bozo" at the WSJ, why can't these funds do that, say, once a week? Shouldn't they be making returns in the 50% range, if this is that easy?
This is Cramer looking to pad his own ego, shock the grannies, cement his reputation among the fans who want to consider themselves Street insiders. It describes a practice that is neither surprising, nor shocking: people with a pecuniary interest in a security trying to drum up press to push it the way they want. It happens all the time, both up and down. That's why I don't publish unverified blather from thoes who claim to know something. But stocks (especially volatile, overpriced stuff like RIMM) moves a percent or two for no reason at all.
And it's why I tell people, constantly, to look at the numbers, do the math, and invest when things are cheaper than they deserve to be.
Cramer's a circus clown. Why do we only take him seriously when his "confession" confirms our own insecurities about the market? And ask yourself this. If Cramer's techniques were used to drive one of your stocks UP, would you be so quick to complain?
PS, if you actually believe what Cramer's saying here, there is only ONE logical course of action for you to take, and that's not to invest in stocks. If the game is rigged, you shouldn't be playing.