Personal Finance Advice

oh man thats the stupidest generic advice I’ve ever heard. the part that made me really sad is all those people cheering.

I’ve read enough bad things about Jim Cramer to not bother with his stuff. I know too many people my age, becoming wannabe day traders after watching Jim Cramer’s show or reading his books.

You should also note that, the article is from thestreet.com, which is co-founded by Jim Cramer.. and i think he’s still currently a director there.

sorry, an endorsement by Suze Orman won’t cut it with me too. heh.

I don’t watch the show, but the most precise criticism I’ve heard of him is that he tells people when to buy stocks, but not when to sell them. I have a feeling that a lot of people take his advice to buy, but then they’re stuck with stock when it goes flat and end up selling for a loss.

I’ve read that, aside from the show, he’s actually a good analyst, although quite abusive. Even if he is, the way he gives out advice is like giving loaded handguns to children.

And it’s sad, because he got lucky with his hedge fund once. But, looking back, people who got it right once like Abby Joseph Cohen and Elaine Garzarelli rarely get it right in the future. Even a stopped clock is right twice a day.

If your student loan interest rate is very low, it actually is a good idea to invest the cash you don’t need to pay tuition. Paying back a loan is a guaranteed investment with return fixed at the interest rate; if the rate is zero (for some types of tuition loans), it is silly to repay the loan until the interest rate goes back up.

That said, Cramer is a fool.

[...] Jeffrey offers a take on Jim Cramer’s Mad Money Bad Advice, which doubles as a good argument for index funds, and asks Are Personal Finance Magazines Relevant?. [...]

I agree that it is bad “general” advice and that it is even worse advice if you are using it to invest in Jim Cramer’s day trading picks, but in certain instances it may not neceesarily be a bad idea. For example I was able to lock all my student loans in at 2.82% and they are still being subsidized because for some reason the government thinks I am still in school. I used some of the extra cash to finance the purchase of my wife’s car and invested some of the rest.

By putting it a long term vehicle like an index fund, it actually could be used as pretty cheap leverage. At 2.82% (2.57% if i set up electronic payments) and tax deductable I will do everything I can to drag these loans out as long as possible. Unfortunately these rates I locked in at are no longer available and with the pending cuts in government funding, the student loan rates going forward would paint a much different picture on repay vs invest.

While I do believe Jim Cramer is a very intelligent person, I think he gives absolutely horrible advice to the average investor.

My Financial Journey

When you make a bad bet and win, they put you on TV. When you make a bad bet and lose, no one cares. That’s terrible advice and in that case, Cramer won. What if he lost? Perhaps you wouldn’t have ever heard of Jim Cramer.

I went to a seminar once, where one of the speakers was pushing … options trading as a great money-making vahicle. I couldn’t believe my ears. People are full of ridiculous advice.