I just finished doing my online analysis last night, shut off the computer and flipped on the TV when to my surprise Mad Money with Jim Cramer was on. Apparently I had that channel on during the day.I admit to watching Options Action on the weekends and I got a little crush on Becky Quick, but I digress.. Cramer was mid sentence telling his viewers that sometimes you have to know when not to “dig your heels in to the ground and be a bit more flexible with the market and know when to hold em and know when to fold em”. I thought to myself “well that is a good bit of common sense” So I didn’t change the channel right off. Fifteen seconds later he says “let’s take a call from Ray in Maryland or Minnesota or Manitoba…” Ray greets him with the obligatory boo – yah from where ever he was and says “Jim I always hear you say that you don’t use stops and don’t recommend that we use stops. WHY IS THAT?” Jim Cramer’s answer was that you need to buy stocks because the fundamentals tell us that they are good companies and to stick with the good ones, after all if they are in my Charitable Trust Account these stocks will always come back if they drop a little. He goes on to say that he doesn’t like the computers closing out trades. The people that got stopped out during the crash of 2008 were sorry when the stocks that they had in their portfolio ended up making a comeback so why bother getting stopped out. !!!????? WHAT DID HE SAY????
In less that 2 minutes he said something slightly intelligent then made a complete fool out of himself. Then while I was looking for my jaw that feel to the ground he made another comment about being aware of guys that come on TV shows and make all kinds of stock picks but that they really have a hidden agenda, much like the politicians, and remember your buddy Cramer is here to keep the Cramer-Nation or was it Cramerica from being deceived by those rat scallions.
Needless to say I found the controller and put on the NFL channel, and laid down to go to sleep. But… I could not sleep. I could not get over that for a lack of better word, that asinine statement about not using stops. As you all know one of the first thing I remember Jeremy teaching in one of the very first classes was his example of the guy who bought the stock then sold it then bought it with his emotional bias and blah blah blah all his reasoning and advice from his co-workers and how 3 years later the stock was at the same price as when the guy bought the stock the first time. If the guy had the education we were going to learn in Foundation of Stocks and Options, he would of known through technical analysis when to buy and when to sell. I just can’t believe that this Cramer guy is on twice a day and people call him and listen to his nonsensical prattle.
People, don’t listen to any of the noise out there. I know it’s hard to do sometimes but Jeez Louise, don’t use stops???? Are you kidding me???
I read in Smart Money last week about some 42 year old that got laid off by Washington Mutual or some other bank, that moved in with his parents after being laid off, took a few classes on Iron Condors, registered as an Investment advisor (RIA) and wants people to give him money so he can trade condors for them. Is the whole world gone mad? It’s no wonder the economy is like it is with every Tom, Jim or Julio setting up web sites to teach you how to trade or want to sell you their picks of the day. I got a new one in my e-mail last week, freestockpick.com or something. They give you their PayPal account and you agree on the honor system to give them 15% of whatever money you make on their stock/option picks. Their first pick they offered me was AAPL OTM 700 strike call option, no targets, no stops, no plan just wait for their e-mails and send them 15% of your profits. Will they give you 15% of their losses??? Don’t hold your breath.
Do you want to be successful as a trader?
This is my advice; take it for what it’s worth or ignore it…
Shut off the noise and don’t listen to ANYONE ELSE’S PICKS, NO ONE AT ALL BUT YOUR SELF. If you don’t know how to make a choice what to trade, come to class twice a week, Retake the classes as often as you can, until reading the charts become second nature to you. Take notes. It is one thing to hear Josh or Jeremy teach, it’s another thing to see their charts and drawings and patterns, but it’s another thing to do it yourself. There is something about writing things down that just makes it so much more effective as far as retaining the information. Do the trader conditioning, paper trade, stick to this program and try not to listen to every other website out there. This stuff these guys teach is the real deal, tried and tested. They have not asked me or paid me to write this, but their teachings have paid me and many others very well if we just stay focused on the basics. Pick a strategy that you are comfortable with and do it over and over and over again and again and again. Stay focused. Remember the KISS rule (Keep It Simple Stupid) and for heaven’s sake, you are better off watching WWE wrestling than watching Cramer. But hey, it’s only money. YOURS!
Gotta go now baby, if I hurry I can still make Cheyenne…