June 3, 2009
Please forgive me for writing anonymously. I fear for my family if I were to use my name.
I am writing because of Jim Cramer. However, I am NOT writing to support reinstating the uptick rule. Let me tell you why.
I have lost most of my life savings based on investment advice from Mr. Cramer. He pounded his buy (bull) signal over and over again for New York Stock Exchange (NYX) when it was $100 and called it the stock of the year. I had to sell it recently when it went below $20.. He also pounded his bull button on Celgene over and over again when it was trading over $70, claiming it was the best drug company in America . I ended up selling with more than a 50% loss. He also implored us to buy Wachovia any time it got under $20 because it was a fortress bank. I had to sell out of that at $6 for a 70% loss.
I am writing because I do not trust Mr. Cramer any longer. So now when he says something, I immediately question its veracity. He is now saying that he told everyone to buy stocks at Dow 6500. That is false. I have his show on tape from March 9 and he said he was extremely concerned about the market and would avoid stocks until further notice. He didnt start suggest buying anything again until the Dow was nearly 7500. Yet he keeps repeating to everyone now that he told us to buy the market at 6500. That is a lie.
Cramers terrible stock advice aside, I am writing because he is constantly blaming the abolishment of the uptick rule for what happened to the stock market this past year. I used to agree with him. In fact, I posted a comment to the SEC website on May 4 (using my real name) and had scores of my friends and relatives do the same. I was so devastated (and embarrassed) by my portfolio losses that I felt some consolation knowing that the short sellers were the reason I lost money.
But now I realize that the uptick rule was not the problem. It was the way management was running the companies that imploded. I recently saw a 60 Minutes segment on the horrible decision Wachovia made in paying $25 billion at the top of the housing market for Golden Savings, which specialized in pay-option ARMS. After learning this, I could not believe Cramer had ever recommended this stock to his viewers. Wachovia made an enormous strategic blunder, and uptick rule or not, this company lost its right to remain independent. Yet Cramer made me feel better by stating nearly every night that it was the removal of the uptick rule that was to blame for my losses. As for the stock of New York Stock Exchange (NYX), John Thain was the CEO during much of the time that I held the stock. Need I say more?
I am now convinced that it was NOT the removal of the uptick rule but rather greed and mismanagement which brought so many companies down. Therefore, I DO NOT feel the uptick rule need be reinstated. However, I am calling for all erratic and reckless stock gurus to be removed from the airwaves.