T A B L E__T A L K What's it worth to make a buck? Tell your horror stories and read those of others in Table Talk   Search for business, personal finance and more at barnesandnoble.com Search by:  Keyword Title Author     R E C E N T L Y Big apple pickpocket By Heather Chaplin Big apple pickpocket: For newcomers, New York City is a glittering, thieving con artist that we only notice after we get home and realize we're broke (03/05/99) Ladies and gentlemen, please welcome ... the Grateful Capitalists! By Larry Kanter Taking their cue from counterculture success stories like the Grateful Dead, radical marketers are building brand loyalty from the ground up (02/26/99) Epidemic of extravagance By Heather Chaplin Economist Robert H. Frank has written a painstakingly researched new book offering a cure to our destructive love of luxury, but will anybody listen? (02/19/98) Van Gogh Inc. By Larry Kanter You've seen the paintings. Now buy the lunch box (02/12/99) House flash By Heather Chaplin If you're struck with the biological urge to own a home, consider first whether it's a good time to buy (02/05/98) - - - - - - - - - - - - - - - - Browse the Money feature archives		IN DEFENSE OF JAMES CRAMER | PAGE 1, 2 - - - - - - - - - - In the February 1995 issue of SmartMoney, editor-at-large Cramer wrote a column about "orphan" stocks -- promising companies whose stocks were cheap because no one knew about them. The magazine failed to disclose that Cramer's fund held large positions in at least three of the four companies he mentioned by name, which all predictably rose in price after the issue appeared. The SEC apparently took some sort of cursory look at the situation and exonerated Cramer. Who exactly was the "victim" of all these shenanigans was never clear, but the incident prompted a flood of inky poison from Cramer's rivals. Although SmartMoney initially stood by him, his column soon disappeared from the magazine's pages. Cramer told me some time later that the section that disclosed his interest in the stocks had mistakenly been omitted by SmartMoney's editors. Given that he didn't sell the stocks into the run-up, and that he's maniacally devoted to disclosing even a hint of a conflict, there's no reason not to believe that the lack of disclosure was accidental. When Cramer started TheStreet.com with New Republic owner Marty Peretz, the chatter began anew: "How can a professional investor write about stocks?" Chris Welles of Business Week declared that Cramer should cease writing about money. The editor in chief of a site that competes with TheStreet.com told me he viewed Cramer's dual role as "hopelessly conflicted," though he wouldn't say so for attribution. Though he's the site's most prolific and well-known contributor, Cramer is not even on TheStreet.com's editorial staff. His high profile probably overshadows the fact that the site has quietly put together a terrific team of journalists -- including Herb Greenberg, one of my favorites -- that can go toe-to-toe with any newspaper business section in the country. Dave Kansas, the site's editor in chief, maintains a strict Chinese Wall between the site's owners and journalists. Responding to the "conflict" conflict, Kansas dared journalists to come on down and see the operation. By the time I took him up on his offer about a month later, I was the only journalist who had visited. While there, I talked to many staffers about many things, including Cramer. Some like him, some don't. But all agreed that he had never evidenced even a hint of influence over their coverage; some have never even seen him at TheStreet.com's editorial offices. Since the SmartMoney episode, Cramer's columns have run with disclosures so thorough that they almost apologize for being exactly what he is -- a professional money manager who opens a window on Wall Street for the general public. Cramer's a fine writer, but his prose isn't the reason he's in such high demand. The reason people who don't even invest know his name is that he brings something to the table few writers can claim -- decades of experience investing millions of dollars. In fact, it's not even his returns that bring the public to his table. While he's ahead of the market over the last 10 years, a rough year in '98 proves that the reason people read him are for the insights he provides. Cramer's detractors have found an easy way to cast aside the views of those who have publicly come to his defense -- accuse them of the crime of being his friends. In a stinging essay in the Washington Post after the SmartMoney scandal, James Glassman pooh-poohs Joseph Nocera, Philip Weiss and the New Republic, who stuck up for Cramer. Indeed, Cramer's got an unusually large journalistic fan base outside the world of finance. But that's what happens when you're A) a frighteningly prolific and talkative writer, whose explicit plan is to bring finance to nonfinancial types, in places such as Time, "Charlie Rose," GQ, "Good Morning America" and even an awkward appearance on "Politically Incorrect"; B) a money manager who got his start investing for media types, such as Marty Peretz; and C) a graduate of Harvard and Harvard Law who edited a college newspaper with a staff that reads like a who's who of New York journalist hotshots. It's clear from the personal tone of the attacks that many savored Cramer's clock being cleaned in the press. Cramer's success as a journalist and money manager makes him an easy target for both. Unlike most of the former, he's rich. And unlike most of the latter, he's famous and has his choice of places to express his opinions. Frank Lalli, editor of Money at the time of the SmartMoney fiasco, wrote a Cramer condemnation that stands among the most disgusting, self-righteous, "this is gonna hurt me more than it hurts you" examples of journalistic piety I've ever read. Lalli, who presided over the most boring money magazine in history, was better known for his bad calls ("Sell Now!" screamed a fabulously ill-timed 1996 cover) than for his editorial judgment. Still, he dripped with contempt as he described -- tsk, tsk -- his own inability to influence the wayward rebel: "He [Cramer] came to me after Harvard in 1978, when I was the metropolitan editor of the Los Angeles Herald Examiner. He was an especially talented and eager young man, and I tried as best I knew how to teach him the profession's basic standard of ethical behavior. I regret that I failed." Because the world is occasionally fair, Lalli was fired last year and hasn't been heard from since. In the meantime, Money's fortunes are rising along with new editor Bob Safian, who ironically was lured from SmartMoney and installed to rescue Money. Just to get my own cards on the table, I've met Cramer only once (we had coffee for about an hour before TheStreet.com's launch party). He appeared in Green, a financial magazine for young people I edit, as one of 11 financial experts who answered "What should I do with five grand?" I didn't write the article, and I didn't speak to him for it. (Incidentally, his advice -- "buy Wells Fargo" -- would have proved quite profitable for anyone who followed it.) We've briefly corresponded via e-mail a few times. So unlike a lot of those who have written about him on both sides, we're neither friends nor enemies, and my interest in him isn't personal. But I do have personal beliefs on this topic. For one, I have little pity for those who perceive themselves to have lost money because they invested in a stock after a writer told them to. Just as Cramer bends over backward in his columns to avoid issuing specific buy and sell recommendations, so should all financial writers. And most do, including myself -- my own stock mentions always include a disclaimer not to act on anything just on my say-so. But those who invest solely on advice from any stranger, especially a journalist who can't possibly know the particulars of a reader's financial situation (risk tolerance, time horizon, portfolio weighting), can't expect the journalist to hold their hand when the investment doesn't cooperate. For another, I'm disturbed at the reasons Cramer so often attracts this kind of attention. Before he started writing for GQ, that magazine ran a long, thoughtful profile of him. Included among a million quotes about him was Marty Peretz saying that among the reasons he liked and trusted Cramer was that Cramer is "a good Jew." Now, before anyone flames me with a boilerplate "everything's a Holocaust to you people," note that not one but two of my colleagues at my then job separately confronted me demanding to know what the hell that means. I said, "It means what it says." At the time, I asked Peretz why he supposed anyone would make a fuss, when they certainly wouldn't upon learning that someone approved of a friend who was "a good Christian." "People are pussies," was his response, and of course he's right. I'm not saying the beefs against Cramer are antisemitic. They're not. But Cramer does personify a type that has always irked those who like to think they control the public's imagination and heroes. Cramer is loud, smart, outspoken, opinionated and rich. It's a type that can wear on those with less imagination and self-confidence, and for those predisposed against that type, the additional religious affiliation certainly doesn't disabuse them of their prejudice. The trend toward punishing those who actually invest has effects far beyond the petty world of financial journalism. Bogus outings of financial types have had a dangerous impact on the ability to wean information crucial to anyone who invests. For example, in 1996, the then manager of Fidelity's massive Magellan stock fund, Jeff Vinik, was "caught" making positive comments about Micron Technology at the same time his fund was trimming part of its Micron position. Despite the fact that there are a dozen possible legitimate explanations for this (including the probable actual one -- that the stock had done so well it had increased to a larger percentage of the portfolio than Vinik wanted), the press went mad suggesting Vinik was unethically trying to boost Magellan's fortunes. Whatever you think of Vinik's actions, the net result -- namely, that all Fidelity fund managers barely speak to the press -- has proven bad for all investors. Corporate officers, as well, are now so well-versed in shareholder lawsuits that it's like pulling teeth to get them to say anything substantive about their businesses. WavePhore's reaction to Cramer is typical of companies' current trend of trying to control not only what their officers say, but what's said about them in the media. Many journalists are either so lazy or so locked out of a chance at a meaningful interview that they pass off rewritten press releases and consensus analyst estimates as business reporting. Cramer didn't cross any kind of ethical line at SmartMoney and he didn't even come close to acting unethically at CNBC. Whatever you may think of Cramer's bluster and overavailability, financial journalism needs more tough questioners and more actual investors. Even if you don't care for his style, you're lucky to have him working for you. SALON | March 12, 1999 Ken Kurson is a contributing editor and financial columnist at Esquire and the editor of Green, a money magazine for young people.