In the most candid look at Wall Street since Liar's Poker, James J. Cramer, cofounder of TheStreet.com, radio and television commentator, and for years one of Wall Street's premier money managers, takes readers on a no-holds-barred tour of life on Wall Streetrevealing how the game is played, who breaks the rules, and who gets hurt.
Everyone on Wall Street knows Jim Cramer, and Cramer knows Wall Street better than anyone. For fifteen years he ran Cramer, Berkowitz, one of the Street's most successful hedge funds with a compounded annual return of 24% after all fees. In Confessions of a Street Addict he takes us from his fascination with the stock market as a middle-class kid in the Philadelphia suburbs to Harvard, where he began managing money. After an apprenticeship at Goldman, Sachs, Cramer set out on his own with his wife, Karen, the "Trading Goddess," as his partner. Cramer brilliantly describes the life of a money manager -- the frenetic pace, the constant pressure to outperform the market and other fund managers, and the shark-like attacks fund managers make as they circle a fund perceived to be in trouble.
At the same time that he was managing money, Cramer was one of the best-known commentators on the financial markets. A former president of the Harvard Crimson, Cramer had been a newspaper reporter before he began managing money. While he was a fund manager, he wrote for SmartMoney and other publications, making him one of the first money managers to offer insight and analysis from inside the world of finance. With the rise of the Internet and online publishing, he co-founded TheStreet.com, the online financial Web site. In one of the most fascinating chapters in this book, Cramer takes us inside the IPO of TheStreet.com, where he found himself a knowledgeable but helpless onlooker as his own Web site came on the market at an unrealistically high price that it never reached again, a harbinger of the dot-com disasters that would soon haunt the stock market.
Throughout the book Cramer is characteristically outspoken, outrageous, and candid about everyone, himself included. There has never been a high-wired, high-octane book about Wall Street like this one.
Cramer, famous for appearing on CNBC as the "wild excitable guy [with]... a big mouth and lots of passion talking authoritatively about how you could make money by getting on the Net," recounts his turbulent dual career as hedge fund manager and media pundit. Cramer tells of his lifelong obsession with the market, beginning with childhood scenes of poring over daily stock listings. The story kicks into high gear once he starts juggling his law school course load so he can spend as much time as possible trading (over the phone, in the pre-Internet '80s). After that, the narrative's pace never relents from depictions of Cramer's early days at Goldman Sachs through the launch of his own fund, which led to magazine columns, a near-constant presence on TV, and TheStreet.com. Cramer's description of the financial news Web site's launch is ruthless, not just toward the executives whose scheming and mismanagement, he says, undermined TheStreet.com's success, but toward himself for hiring them and temporarily destroying his long-standing friendship with publishing fixture Marty Peretz. Cramer is equally self-recriminating about the effect his fanatical trading had on his personal life, but clearly still loves to linger over every major deal of his career (and a lot of the minor ones), even perhaps especially if they blew up in his face. This is a lively, informative portrait of the highest levels of finance and media in the last decade. Agent, Suzanne Gluck. (May 13) Forecast: In mid-March, HarperCollins published Nicholas W. Maier's Trading with the Enemy, a kiss-and-tell about Cramer. HC's decision to pulp the book due to false assertions it contains about Cramer will no doubt fuel interest in Cramer's book. Expect lots of buzz in financial publications and decent sales in Manhattan and Silicon Valley bookstores. Copyright 2002 Cahners Business Information. -- PUBLISHERS WEEKLY.
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Simon & Schuster
June 02, 2003
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Excerpt from Confessions of a Street Addict by James J. Cramer
Chapter 16: Crisis in 1998: The Trading Goddess Returns
October 8, judging from the closing levels of the major averages, seemed like a pretty unspectacular day. The Dow Jones Average shed 9 points, around .1 percent to close at 7731.91. The Nazzdogs took it a little worse, losing 3 percent, or 43 points. Thirty-year bonds dropped about a point and a half, bringing their yields to 5 percent on the nose. The dollar got clocked, giving up a big chunk of that year's gains.
But these numbers masked the most important day of the last decade of investing, because on October 8, the bear market of 1998, the vicious, gut-wrenching, horrid decline that had taken stocks well past their two- and three-year lows, and brought some averages down to as low as 40 percent off their highs, came to an end. On October 8, a dreary, chilly rainy Thursday in New York, a day so out-of-kilter that even the Dow Jones Averages didn't trade at the opening (that was the day that Travelers switched into Citigroup, causing a confusing delay that kept people in the dark about the true prices of the averages until a half hour into trading), the stock market bottomed.
At eighteen minutes after 12:00 P.M.
I ought to know. I caused it. At 12:18 P.M. I capitulated. I couldn't take it anymore. I gave up both literally, at my fund, and virtually, on my Web site, TheStreet.com, where I penned a piece entitled "Get Out Now." And the prop wash from that article marked the low point in the most vicious bear market of the last century.
I didn't set out to capitulate that day. My spirits had been buoyed by the return of my wife to my trading desk after an absence of four years, and she had generated the first trading profits we had made in weeks and weeks and weeks. The day before had been our first outperformance day versus the Nasdaq in many months. I came in that Thursday thinking we were going to be cool, despite a breathtaking combination of $100 million in losses and $100 million in pending redemptions that had reduced my $325 million hedge fund that I had run successfully for a decade to a pitiful $100 million fund that was down 35 percent and in danger of going under if it didn't raise millions upon millions in cash.