Jim Cramer, unplugged [MoneyTech]

Those who know Jim Cramer only from the final segment on his nightly CNBC screamfest are missing someone as reasonable as he is entertaining. That more balanced Cramer spoke with Money:Tech conference chair Paul Kedrosky this morning about how technology has changed investing. Kedrosky noted that, compared to 20 years ago, “we’re all quants today” because we have so much more information. Cramer characterized it as a move from the anecdotal to the empirical.

Cramer also made compelling cases for the superiority of Bloomberg terminals (an argument that Marketcetera’s Graham Miller is countering in a session right now), the eventual demise of sell-side research at the hands of Google, and the indispensibility of the websites Implode-o-Meter and Seeking Alpha. When he moved on to stockpicking, his metier, Cramer said, simply, not to buy tech stocks: “tech has become too dangerous to recommend.”

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  • Yeah, Cramer’s a madman, but in a good way. I recommend checking out a beta site by the Motley Fool called Caps. The best summary of stock info and community feedback I’ve found. Also check out the video section of Cramer’s The Street for some good analysis.

  • John Keeling of Motley Fool’s CAPS just finished a presentation at Money:Tech. Short version–it’s working. Their 5-star stocks, picked based on community recommendations (after they rank contributors and do some additional data munging), brought 28% returns.

  • Sara, I agree, but I thought that the graph showing post sub-prime meltdown was most instructive. While the wisdom of crowds when it came to 5 star stocks held compared to the market, it was severely compromised compared to its advantage when the market ahead of this discontinuity. What I took away was that the wisdom of crowds works when there is little disruption, but the crowd still failed to anticipate a meltdown. Is it fair to conclude that crowds are wise as long as things are relatively stable, but the weakness of crowds is that they follow each other rather than paying head to what, in retrospect, were a wide variety of red flags e.g. negative savings rates, >100% equity loans etc?

  • Sara, I agree, but I thought that the graph showing post sub-prime meltdown was most instructive. While the wisdom of crowds when it came to 5 star stocks held compared to the market, it was severely compromised compared to its advantage when the market ahead of this discontinuity. What I took away was that the wisdom of crowds works when there is little disruption, but the crowd still failed to anticipate a meltdown. Is it fair to conclude that crowds are wise as long as things are relatively stable, but the weakness of crowds is that they follow each other rather than paying head to what, in retrospect, were a wide variety of red flags e.g. negative savings rates, >100% equity loans etc?