Last week marked the 10th anniversary of the famous Cramer “They know nothing!” rant. There was plenty of buzz on CNBC, including a victory lap for Cramer.
The blogosphere took note, with most discussion centered on whether Cramer was right or wrong. The majority agreed with him, and praised him for his conviction. If you missed it, or what a review, you can see the original rant here. In general, Cramer said that the Fed was clue less, calling out some members by name. He said that people would lose jobs and homes, as would some of his well-placed friends in the business. These people knew things of which the Fed was unaware.
He added information in last week’s reprise. “I’ve calmed since then,” Cramer said. “Ranting didn’t get the job done. I failed. But a decade later, I can look myself in the mirror knowing that, unlike so many others, at least I tried.” He noted that decision makers were “armchair generals” who had no contact with “those in the trenches.” Cramer’s friendships let him know that people were scared. He gave an example of someone at a bond firm — people abandoning homes. He asserted that these friends were asking him to go on TV and “get them to cut rates.”
The Unsolved Mystery
The punditry spends most of its time finding reasons for what happened and offering their opinions. In this case, no one seems to have noticed what did not happen.
Suppose that you had a Harvard degree in Political Science, magna cum laude. To this you added a Harvard law degree, experience as a journalist, experience at Goldman Sachs, and a record as a successful hedge fund manager. You have access to a top financial site (where you are the founder) and nearly unlimited air time on a financial network.
You want to warn people and to change the direction of public policy. You could write a cogent explanatory piece for a major publication. You could do an op-ed for the NYT or the WSJ. You could write an analytical piece on your own site. You could take enough TV time to explain the problem and the evidence you have. You could reach out to the Fed (where they were actually accused of talking to bankers too much) through mutual business associates.
Or you could do a rant……
I always try to find “actionable investment advice.” Sometimes it is one step removed. It is important to recognize real experts. An expert analyzes, explains, and teaches.
An expert does not substitute shouting for evidence.
This is not intended as a criticism of Cramer, who has pluses and minuses. I enjoy his CEO interviews, for example.
The takeaway? Do not merely accept authoritative statements. Use your own critical thinking. Ask good questions.