My Own Private Jim Cramer
I have a personal experience about the wisdom of stockbrokers that ties in nicely with the Stewart-Cramer tete a tete.
After Star Wars was released and became a financial phenomenon, a writer, possibly Harlan Ellison, was on Hour 25, the late, lamented radio show about science fiction broadcast from KPFK in Universal City. Anyway, Ellison was praising the smarts of sf writer Robert Silverberg, who he said was prescient enough to buy 20th Century Fox stock before Star Wars was released. Silverberg made a killing on the stock when it's value doubled.
Thanks to my subscription to the magazine Cinefantastique and my then avid interest in sf films, I knew when Columbia Picures would release Close Encounters of the Third Kind. Guessing that it would repeat the Star Wars phenomenon, including the jump in the studio's stock value, I persuaded my father to give my sister and myself some money to buy shares in Columbia Pictures. We went to the local office of now defunct brokerage E.F. Hutton, where we were presented to a broker I'll call Jerry Broker. He looked up the current value of the stock and we opened an account and bought shares. We may have put as much as $1,000 into it.
Shortly thereafter, studio boss David Begelman became embroiled in a scandal for forging actor Ciff Robertson's name on a check and other improprieties. So, we got a call one morning around 7 AM from Jerry telling us that Columbia's shares had gone down in value in response to the scandal and might go lower. This threw a scare into us. Young, naive and pathologically risk avers, we sold our stock and lost money. Then Begelman resigned and Close Encounters was released. Columbia's stock never doubled, but it recovered from the scandal and went up several points more than where it stood when we purchased it.
I don't recall how we learned this, but we later discovered that Jerry Broker returned to New York very shortly after calling us. In the broker parlance of John C. McGinley's character Marve in Oliver Stone's film, Wall Street, Jerry had churned and burned us.
Jim Cramer is nothing more than Jerry Broker writ large.