Bibliomancer.Com

“Jim Cramer’s Real Money: Sane Invest­ing in an Insane World” (James J. Cramer)

A month or two back, I had no idea who Jim Cramer was. It was only when my friend Morgan’s father was vis­it­ing that I was intro­duced to this pecu­liar sort of celebrity. See, Morgan’s dad wanted Mor­gan to see an episode of the CNBC pro­gram, Mad Money, which is Cramer’s vehi­cle. We didn’t want the view­ing to inter­fere with going out, so we offered to Tivo it for them, and we all ended up sit­ting down and watch­ing it together. I really enjoyed it, but more, it left me feel­ing like there were things going on here that I could actu­ally get to know about. His­tor­i­cally, my ver­sion of invest­ing comes in two forms — con­tribut­ing to my 401k and, when I’m feel­ing crazy, putting money into a spi­der fund (an index fund that matches the S&P 500). The idea of actu­ally track­ing a port­fo­lio was always inter­est­ing, but not some­thing I was will­ing to pur­sue. I was intrigued.

So I decided I’d check out his books. In addi­tion to a biog­ra­phy, he has two money books, Real Money and Mad Money. BJ’s had Mad Money on the cheap, so I picked it up, but start­ing it left me with the impres­sion that I’d be bet­ter off with Real Money under my belt, so I checked out Audi­ble and it turns out they had both, and read by the author no less. A few unre­lated tech­ni­cal snags later and I ended up lis­ten­ing to it.

First off, I liked it enough that I’ll prob­a­bly pick up the book. One com­mon fail­ing of audio books is that dia­grams and charts trans­late poorly. Appar­ently in the CD audio­books, they include image files, which is great, but of no help to me. But short form — thumbs up.

The best thing I can say about this book is that it was an absolutely fan­tas­tic intro­duc­tion to a lot of con­cepts I’d had some under­stand­ing of, but had never really got­ten into. It’s a solid break­down of what goes into a stock and fac­tors that play in the mar­ket. The fact that I now feel like there’s a rea­son to watch the fed, other than because the news tells me to. This book has turned a lot of noise into sig­nal, and that always pleases me.
I have some con­cerns about huck­ster­ism. I have no spe­cific rea­son to expect it from this book than I do from any other source, but any book that promises that you’ll be able to do any­thing is sus­pect in my mind, and when money’s on the line, that sus­pi­cion auto­mat­i­cally ratch­ets up a notch. He’s def­i­nitely a booster for his own site, thestreet.com, but he’s also pretty up front about it.

There are cer­tain pat­terns you get to rec­og­nize when some­one is blow­ing smoke up your ass, as my painfully large col­lec­tion of diet books will tes­tify. Sim­ple rules, vaguely elab­o­rated, cou­pled with promises of ease or suc­cess with­out effort, and if there is effort, it is more or less hand­waved. What I like about Real Money is that at no point did I feel I could take what it had to say and just start invest­ing with­out bust­ing my hump with work. or rather, I prob­a­bly could, but it’s made clear what a bad idea that is. Where the book shines is in point­ing to the kind of work that you need to do. I don’t feel that this book guar­an­tees me money if I invest and, in fact, it goes to great lengths to say that this is for fool­ing around after you have money going into your retire­ment account. I feel that it leaves me with more tools for when I do invest, but does not pro­vide a magic bullet.

Ide­ally, this book seems to be for some­one with $10k or so set aside that they’re look­ing to start invest­ing with. That is, for the record, not me, since I’m a big chicken look­ing at dip­ping my toe in the pool before I start. That means that I’m still in the world where pay­ing for cer­tain sub­scrip­tions is not yet worth it, and that the cost of a trans­ac­tion is a sig­nif­i­cant part of my poten­tial costs. What’s more, cer­tain con­cerns, like taxes, are given short shrift.

I’m plan­ning on lis­ten­ing to Mad Money next, and we’ll see if it’s more friendly to my needs. If not, there’s still a lot of read­ing I need to do before I feel like jump­ing in, but even so — that’s exactly what the book sug­gests I do.