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We We Love Jim Cramer

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Hi Steve,

I wonder how Cramer is going to explain that call? Best Wishes.

 

Joe

 

You think he was selling Bear Stearns short as a hedge to his long positions?

 

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His explanation is that he was referring to someone who had an account at Bear Stearns, not someone who owned Bear Stearns stock. However, he was not clear on that point and they flashed up a stock chart - which would indicate he was referring to the stock. He also said they weren't in trouble.....for a so called industry insider........guess he isn't exactly what he thinks he is.

 

ScottyD

 

P.S. Legg Mason Value Trust and the "legendary" investor Bill Miller had a significant position in Bear Stearns...hmmmmmmmm

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It amuses me to hear the experts urge people to "buy this" and "sell that." How the heck can they predict the future?

 

For all of his bluster, Jim Cramer is a highly educated and very bright man, but even he can be wrong. That should be a caution for those of us who do not have his credentials.

 

For most people, investing regularly into a well diversified portfolio of low cost index funds seems to be the wise approach. We can't control the markets, but we can control our asset allocation, and we can control our costs.

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It amuses me to hear the experts urge people to "buy this" and "sell that." How the heck can they predict the future?

 

For all of his bluster, Jim Cramer is a highly educated and very bright man, but even he can be wrong. That should be a caution for those of us who do not have his credentials.

 

For most people, investing regularly into a well diversified portfolio of low cost index funds seems to be the wise approach. We can't control the markets, but we can control our asset allocation, and we can control our costs.

 

Cramer is a graduate of Havard Law school and is a best friend of his classmate Eliot Spitzer. It wasnt that he was wrong but that no one knew that the hedge funds and institutional investors withdraw all of their cash and marketable securities from Bear between Monday and Friday which left it unable to meet its obligations to its customers or borrow funds because its mortgage securities were not considered to be adequate collateral for loans regardless of the $84 a share book value of its assets. Without liquidity Bear was forced to seek a loan from the Federal reserve which agreed to guarantee a 30B loan from JPM. JPM then bought Bear for $2 a share.

 

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Cramer is a graduate of Havard Law school and is a best friend of his classmate Eliot Spitzer. It wasnt that he was wrong...

I think that this is funny. Cramer is not wrong but BS went down anyway. You can make all the excuses for Cramer that you want. But he puts himself out there making those big statements.

 

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Cramer is a graduate of Havard Law school and is a best friend of his classmate Eliot Spitzer. It wasnt that he was wrong...

I think that this is funny. Cramer is not wrong but BS went down anyway. You can make all the excuses for Cramer that you want. But he puts himself out there making those big statements.

 

Most advisors were bullish on Bear as of Friday afternoon because the book value of the stock was $84 a share and which made it appear to be a bargain 30. Its not that they were wrong but that accurate information on Bear's liquidity was not available to investors until after the close of trading on Friday. One of the risks of investing in stocks is that you can have the best information at the time of the trade and still be wrong because of subsequent events. Investors who bought JPM on Monday morning or Lehman on monday afternoon have been well rewarded. And investors who bought Bear Stearns on Monday for $2 a share have earned 295% in two days because it closed at $5.91 yesterday.

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Most advisors were bullish on Bear as of Friday afternoon because the book value of the stock was $84 a share and which made it appear to be a bargain 30. Its not that they were wrong but that accurate information on Bear's liquidity was not available to investors until after the close of trading on Friday. One of the risks of investing in stocks is that you can have the best information at the time of the trade and still be wrong because of subsequent events. Investors who bought JPM on monday morning or Lehman on monday afternoon have been well rewarded.

All of this makes my point: how is one to know what will go up and what will sink? I will grant you that there are a few people who seem to have a talent for this, but for most of us, this stuff is all pretty random.

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Intruder,

"Investors who bought JPM on Monday morning or Lehman on monday afternoon have been well rewarded."

 

I may not have been well rewarded because I didn't do EXCATLY as you so accurately and courageously predicted in HINDSIGHT, but I think I did well over the last five or six years in a diversified portfolio of broad low cost fund indices.

 

Steve

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P.S. Legg Mason Value Trust and the "legendary" investor Bill Miller had a significant position in Bear Stearns...hmmmmmmmm

 

 

You sure about this? The listing that Morningstar carries of his top 25 holdings (as of 12/31) did not include Bear Stearns.

 

 

And investors who bought Bear Stearns on Monday for $2 a share have earned 295% in two days because it closed at $5.91 yesterday.

 

 

...except that nobody bought it at $2 a share. While $2 was the announced price of the deal, the low price on Monday was $2.84, and the shares moved up rapidly from there. (Apparently there's a fair number of people who doubt that the deal will go through?) Not that there's anything wrong with a move of $2.84 to $5.91...still a pretty good week's work.

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Google it, there is at least 5 or 6 articles (probably a dozen now) about Legg Mason Value Trust and Vanguard Windsor II. BS took about a 3% chunk out of LMVT returns.

 

ScottyD

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