I have followed Jim Cramer's public career since 1998 and have read virtually every word he has authored on TheStreet.com since that time. I also read his first book, Confessions of a Street Addict. I genuinely believe that Jim wants to help people understand how the market really works and has the best intentions. However, I am confident that I have a pretty good understanding of who Jim is, how he made his money, and how that is a combustible combination for is public career and those who listen to his "guidance".
In his first book, it becomes quite clear that Jim's hedge fund fortunes had very little to do with being a fundamental investor. Jim is a trader/mercenary and his ability to pick stocks based on fundamental reasons is average at best - in my opinion. He relied on his wife, Todd Harrison of Minyanville.com (former president of his hedge fund) and other traders to coin consistent profits. That action created MASSIVE commission dollars that were used as leverage with the firms they directed it to, to gain access to research analysts. Jim's fund would accumulate a stock that had a good "story" that they could pitch the analysts on and convince them to upgrade the stock. Once the stock was upgraded his fund would blow out the stock into the price spike from the upgrade. Good work if you can get it!
That was legal at the time, so there is nothing "wrong" with what they did. However, it is hardly the kind of track record that warrants someone listening to his daily stock advice. His public portfolio has done very little since he created it in 2002. He built his reputation on being in cash for the 1987 crash - he admits in his book that was due to luck. His major buying opportunity in 1991 was because of his wife - left to his management his fund would have done very poorly. When the only other major market disruption of the 1990's occurred in 1998, his fund almost collapsed and was bailed out when his wife returned, borrowed more money than was legally allowed, and was bailed out when the Fed cut rates in October 1998...none of which were due to Cramer's abilities - he was suicidal at the time.
So in summary, I have learned a tremendous amount from Jim and appreciate his willingness to share the inner guts of how Wall Street really works. However, part of that education also allows me to state with supreme confidence that Jim Cramer will be a pariah after the current bear market plays out. His viewers/readers/listeners do not have the same make up as a trader/mercenary. They don't have the stomach to trade actively. They buy what is hot and what Jim talks about on his show, but then will not have the stomach to sell. Many of his viewers are already barried in "BRIC" stocks that are probably down 20%+ in the last month. Jim will blame the Fed and say that he has been bullish on them from 40% lower. Unfortunately for him, he is unrealistic as to how the average investor "works". They will end up panicking and will sell at the wrong time and Jim will be blamed and lashed out at. The irony is that that is precisely how he has behaved towards others in the past - karma anyone?