Jim Cramer interview with LA Times

Jim Cramer interview with LA Times







'Money' man explains method to his madness

Jim Cramer talks about his personal brand, his young audience's billionaire complex and I-5 truck stops.



By Tom Petruno | Los Angeles Times Staff Writer

September 7, 2007



Jim Cramer, the host of CNBC's popular "Mad Money" program, brings
the show to USC today in one of his periodic visits to college campuses.



The 52-year-old Cramer, a Harvard Law School graduate, former hedge
fund manager and co-founder of financial news company TheStreet.com
Inc., launched "Mad Money" in 2005. He has become infamous for the wild
on-screen antics that accompany his advice on stocks to buy or dump.
Despite the clowning, he shows an encyclopedic knowledge of individual
companies and market history.



Although he has plenty of critics, Cramer -- who in the late 1970s was
homeless for about nine months and lived out of his car in California
-- has acquired an avid following among younger people. He met Thursday
with a group of Times editors.



How'd you get invited to USC?



This is one where the trustees and the alum played a major role.
Typically it has been the [student] stock club that has gotten it
started. This was much more from a level that told us we had buy-in, so
to speak.



You've found that you aren't welcome at every campus you'd like to take the show?



We are a disruptive influence. But USC is a school where they've had so much experience with filming.



We were supposed to go to Notre Dame during football season. At the
last minute they pulled it. Stanford said no. We got a direct turn-down
from them a year and a half ago.



In a column you wrote for New York magazine in June, you tried to
explain why you thought so many people hated you and also why college
students, in particular, identified with the "Mad Money" show. You said
you were riding two waves: young people who were discovering the stock
market and their disdain for the way traditional media deliver
information.



We're in a situation now where we're all up against Google/YouTube.
When radio was king and then TV came, I think radio was very reluctant
to recognize that TV was bigger.



Now I think TV still thinks it's really big -- and the revenues are bigger -- but Google/YouTube I think could make TV small.



This is something that everybody in the media has to recognize.
Newspapers are always going to have a core contingent, radio's going to
have a core contingent, TV will, but this next generation just doesn't
view TV the way my generation does.



But the wilder your antics get on the show, is there a risk that the
audience just expects more and more outrageousness? You know what the
Romans did to keep the crowds satisfied -- giraffe versus bear in the
Colosseum!



This is a very important issue to me. . . . I think what you have to
say at a certain point is, "Do I have a brand?" And the brand can
include some slapstick, but if it's not substantive and not based on
some sort of education underneath it, I will fail.



You want to go out like [John] Elway. You don't want to go out like
Willie Mays. I feel that we're still in a good trend. As long as I'm in
a good trend I'm going to stick with it. But I worry constantly that
the show will have overstayed its welcome.



Given the sheer number of stocks you suggest either buying or
selling in any given show, do you worry that you're encouraging people
to trade in and out, even though all the research says the vast
majority of investors won't make money as active traders?



Let's just say I struggle with it. . . . In Year 1 I was much more
oriented toward "stock of the day." And I didn't like that. In Year 2 I
went away from that. In Year 3, this year, I'm trying to say, listen,
there are broader themes, there are broader sectors, you can try to
pick the best of breed in the sector.



I go back to the fundamental idea that stocks can be interesting. And
therefore if you're interested, you will be better off than if you just
let the broker handle you. You'll be a better client and a better
investor.



But you agree that very few people can make a lot of money actively trading?



It's a sucker's game.



You also get rapped for encouraging the college crowd to think about
careers in finance because that's where the big payoffs seem to be.



The fact that my demographic is so young -- we say it skews to 28 --
tells me I've got people who are fascinated by the process of making
money. It's the idea of going to a [buyout firm] and making more money
than you ever dreamed.



When I was at Indiana University, I talked about this with [billionaire
investor] Mark Cuban, which was the possibility that these people don't
just want to make money -- they want to be billionaires.



Indra Nooyi, who is the fabulous CEO of PepsiCo, called me after one of
the shows and said, "Is there anyone who wants to work at a Pepsi?" I
said I don't know. I met with her team from Frito-Lay. The whole push
was "green." Nooyi said the secret to getting the next generation is
that you can prove you're an environmental company. That has appeal.



But yes -- this is a big issue. The people from Frito-Lay will tell you
that they can't find enough people willing to go to work at the Procter
& Gambles and the Pepsis. It's just not of interest. That's a
shame. These are great American companies.



OK, time for the Lightning Round, as you've dubbed it on "Mad
Money." After the stock market's summer sell-off sparked by the housing
sector's woes, are we still in a bull market, or is the bear at the
door?



I think it's a bull market for everything but the financials.



What's your favorite stock that no one ever asks you about?



Probably Hologic. This is the company that's going to be the premiere
women's diagnostic company. It's like Allergan [which makes Botox],
which no one ever asks me about. I have tried to get these ideas out
there because these are women's health and look-good [issues]. The
wheels of capitalism are greased by the desire to have wrinkle-free
skin.



Name the worst-run major company right now.



Alcatel-Lucent. They're just horrible. They've missed one of the
greatest bull markets ever, which is this incredible transformation of
plain old phone lines to video and data. They owned that market and
they've done nothing. Rather extraordinary.



What's the dumbest call you've made this year?



I've made a lot of dumb ones. New York Stock Exchange [NYSE Euronext, which at $71.73 Thursday was down 26% year to date].



In August they did twice the volume they did in March. Their margins
are huge on that because they have this big fixed cost. And people
still hate it.



I think they could earn $4 a share next year. The stock is $71. How can
you not give it a 20 [price-to-earnings] multiple if earnings are
growing at 25%?



What was your favorite parking area in L.A. when you were living out of your car here?



Interstate 5. The truck stops are really fabulous and everybody protects everybody.



And no rousting. They would roust me all the time from the really good
areas. I was doing Hancock Park because it was really nice. They would
give you like two hours.