Philologist, writer, journalist, financial analyst, specialist on internet trading, Sergey Golubitsky, the founder of the vCollege School of Stock Trading, the first in the Russian-language Internet, and a columnist for Insider.pro, spoke about, how charisma can be an even more effective tool of influence, than academic status.
The paradox of trust in financial analysts to the detriment of financial journalists is explained by two factors.
On the one side, such a characteristic feature of the mythologized consciousness of the masses as trust in the "scientific status" (for analysts it is an aura of professionalism, while journalists in the popular mind are buffoons, designed to entertain, but not teach).
On the other hand, trust in analysts is explained by another mythologeme, which is implemented in a narrower - exchange - space. It's about the mechanism, causing short-term fluctuations in quotations and not related to objective reality (for example, with indicators of quarterly reporting), but with the reflection of this reality in the subjective assessments of the market. In other words, the share price is not rising because, that the issuer reported high profits, and therefore, that this profit exceeded the so-called whisper numbers, Whispered by financial analysts.
Today I will tell the story of the most unique character in the world financial media - James "Jim" Kramer.
English has an amazing ability to turn nouns into verbs.. You take the word "call" - "call", "call", "Call", add the particle "to" and you get "to call" - the verb "to call". Aerobatics is the "verbalization" of a proper name.
Several "naked" characters come to mind. curious, that the resulting derivatives and their source histories are usually negative. However, this situation is at the same time the culmination of popular recognition for a person., whose name was turned into a verb (that is, it has become a household name).
So, after a seven-time unsuccessful shot on goal of the Russian football player Kerzhakov during the European Championship in 2012 year, British journalists have introduced a new verb "to Kerzhakov" - "to smear from everywhere". However, the illustrious object of ridicule was not in the least offended, ironically stating, that the British are clearly "lacking in vocabulary".
Another famous character is Dr. Jack Kevorkian, ardent adept of euthanasia, generously relieved earthly suffering 130 patients (after which he was no less generously sent by the American Themis to prison for 8,5 years). The grateful American people immortalized the name of Jack Kevorkian in the verb "to Kevork somebody" meaning "to take someone and quietly strangle" (even Hamlet's variations are known: «to Kevork or Not to Kevork»).
The third character "verbalized" by folk wisdom is the hero of our today's story, James Kramer, which during his lifetime was immortalized in the phrase "Don’t Сramer me", which in a loose translation sounds like “Do not hang me this monstrous noodle on my ears!».
First time I saw frantic Jim, nicknamed "drive plunger" (Driving Ram - with the light hand of publisher Richard Oppel), in 1998 year on the television financial channel CBNC. Jim, if my memory serves me, appeared in the Squawk Box program - a must-see early in the morning before the opening of exchanges - and was terribly excited about some momentary occasion.
Outwardly, Kramer fit perfectly into the generalized image of a typical lawyer from New York, and even his energy was characteristic (however, all New Yorkers are equally assertive and unceremonious). However, the talking head on that distant CBNC broadcast had a quality that was absolutely impossible for a lawyer.: he was constantly on the verge of falling into a fierce tantrum! I have never seen such an emotional injection on professional exchange TV channels..
Jim Cramer waving his arms furiously, foaming at the mouth, arguing to the interlocutor, that he, least, fool, as a maximum - does not understand anything in the market. The next moment Jim was offended and seemed, about to cry. However, after five seconds, he exploded with such a victorious Mephistopheles laughter., that even Fedor Ivanovich Chaliapin would certainly have goosebumps.
It's been almost 20 years, but that first correspondence meeting with Jim Kramer was forever imprinted on my mind. Imprinted not as a particular, but as a symbolic reality of all that, what do i mean by "Wall Street".
Need to say, that I am not alone, a foreigner lost in the office jungle of Seattle, immediately fell under the indomitable charm of Jim Kramer. To the charisma of this pot-bellied, bald, rough, an ill-mannered and at the same time such a good-natured Jew, the whole of America! Cramer was adored. And they adored ambivalently, that is, some admired him and looked into his mouth, while others hated, however, they also looked there. And one, and for others, this adoration from time to time became an oh what a pretty penny, however, they returned again and again with irrational persistence., listened to recommendations (exchange tips, tips) Kramer, opened positions and… lost money!
No doubt, that any attempt to decipher the magic of this financial ether magician through his biography is doomed to a complete fiasco. For the sake of form, let's try.
Jim Kramer biography
Kramer was born into a family of a small entrepreneur and artist. Since childhood, he dreamed of becoming a journalist and writer, however, he started his business career selling ice cream at baseball stadiums (in regards to, wrapped on a bast, Jim tenderly carried through his whole life: every second of his stock-related phrases is borrowed from baseball slang). Graduated from Harvard College, received a diploma with honors, worked closely with the student newspaper. Moved to Los Angeles, where he worked as a journalist and, after that, how he was robbed for the third time, slept in the car for four months. Tired of life, returned to education and received a degree in jurisprudence (again at Harvard).
In parallel with the educational and journalistic life of Jim Kramer, the life of a trader developed intensively and continuously.. At some point, the exchange takes over the feather, and c 1984 Jim takes a job as a broker in one of the investment divisions of Goldman Sachs. He trades so successfully, that in 1988 he created his own hedge fund, which in the first year demonstrates 47% arrived.
Cramer left him only in 2001 year and did it with a winner's halo: for 14 years, the average annual return on his investment was 24%! The result is phenomenal.
Further more. IN 1996 Kramer co-founded TheStreet.com, media internet company, providing business and financial information, investment ideas and analytical materials for private and corporate investors. In May 1999 of the year TheStreet.com goes to NASDAQ at the price of an IPO, That, but, will forever remain the highest bar in the history of the company. At that moment, the capitalization of the project was 1,7 billion dollars (Cramer's share, largest private shareholder, — 10%). Today TheStreet.com is worth 50 million and despite the incredible efforts and ingenuity of more and more new projects, he is barely making ends meet.
In the 2000s, Kramer completely abandons independent trading and focuses on financial journalism. An endless series of scandals has become synonymous with a new period in Kramer's life, related to insider trading, accusations of deliberately misleading viewers, Securities and Exchange Commission hearings and subpoenas. The culmination was the spring embarrassment of 2008.
11 Martha 2008 of the year, CNBC TV studio, straight Ethereum. America's most influential and popular financial analyst, founder of the mega-resource TheStreet.com, and concurrently - hedge fund owner Jim Kramer answers questions from viewers: “Should I be worried about Bear Stearns (BSC) in terms of liquidity and sell its shares? Not, no and no again!!! Bear Sterns are fine, don't sell shares, Bear Stearns has no problem, selling shares is nonsense! Don't be stupid!». 12 March - the next day, after the loud recommendation of Jim Kramer - BSC shares fell by $1,4, 13 March - still on $4,6, 14 March - already on $27, and on Sunday night, Bear Stearns signed an agreement to take over the company by JP Morgan Chase on the basis of $2 per share!
Whatever it was, James Kramer continues to work as a financial journalist even after his embarrassment with Bear Stearns, hosts several programs at once on CNBC, actively developing a new media project, budding from TheStreet.com, — MainStreet.com. After CNBC vehemently banned Kramer from buying and selling securities during the week before and after their public announcements, Jim discovered a new niche for himself: now he tells ordinary viewers and listeners, as a professional stock exchange public, from hedge fund managers to brokers and analysts, deceives gullible clientele.
This theme from Kramer's mouth is equally wildly popular., that in the old days his stock "tips" were used. Affected by Jim's legal education, which allows him to constantly and with impunity balance on such a brink of credibility, which no other representative of the financial industry has dared to do.
Biography in facts
Married to a trader (with 1988), lives in Summit, New Jersey.
Jim Kramer is not allowed to buy shares on his account, which he recommends on CNBC, at least during 5 days after TV recommendation. If any shares, which he talks about on CNBC, is in his portfolio, then this must be reported.
Kramer attended Harvard.
Worked for the Harvard Crimson student newspaper and even became its president.
Worked as a journalist for The Los Angeles Herald Examiner.
He was robbed, 9 lived in the car for months.
Worked for Governor Jerry Brown.
One of the earliest reporters for American Lawyer. Received his PhD from Harvard Law School. During this time he worked as an assistant to Alan Dershowitz.
At this time, he began investing in the stock market.. He started promoting his shares, leaving notes about them on your answering machine. The New Republic owner Martin Peretz let Kramer invest $500,000. During 2 years Kramer earned $150,000.
IN 1984 these results allowed Kramer to get a job as a broker at Goldman Sachs Private Wealth Management. Success in this work inspired Kramer to open his own fund in 1987 year - Cramer&Co, later – Cramer, Berkowitz&Co.
c 1988 on 2000 Kramer's foundation showed only one negative year - 1998. IN 1999 the fund has earned 47%, and c 2000 +28%, ahead of index S&P500 per 38%. IN 2001 Kramer left the foundation.
For 14 years, the fund showed an average annual return 24%. Kramer earned about $10 million per year. At this time, he also worked for Smart Money magazine.. Kramer was accused of unethical practice of buying shares in the company before the article was published., in which he praised them, which led to enrichment in $2 million.
IN 1996 year Kramer in partnership with Martin Peretz (1th investor Kramer) participated in the creation of the site TheStreet.com, which sells paid trading signals - tracking portfolio dynamics through the Action Alerts Plus service. Trust Portfolio Return, to which trading signals are attached, with 2002 on 2009 amounted to 31,75%, versus 18.75% S&P500.
Kramer also worked on projects for MainStreet.com, TheRoad.com (not good).
TV program Mad Money with Kramer first aired on 2005 year. The CNBC website stated, that the program teaches viewers to think like professionals in the stock market, how to analyze stocks, how to perceive the market correctly through the prism of news
conclusions
so, what can we learn from the biography to explain the effectiveness of the impact on public opinion of Jim Kramer? To start, completely incomprehensible, how to qualify. Because Kramer is also a financial journalist, and financial analyst, and hedge fund manager, and the owner of the financial business! Cramer is one and in all imaginable guises!
I would venture to take responsibility for the assumption, that the combination of all conceivable and inconceivable forms of involvement in the investment industry is not the same, which does not contribute to the strengthening of the authority of Kramer's word in the eyes of ordinary people, but, against, weakens this authority as much as possible! The fact, that in the popular perception of the world the consistency of the leader, which alone serves as the basis of his authority, as well as the idea of his professionalism is never built on a plurality of.
Trust is the only person, who does only one thing in life!
Understand, that this statement is paradoxical, however, it is based on multiple empirical observations, that I spent in those distant, distant times, when I wrote my dissertation on social mythology.
A professional is always a specialist in one thing. A professional should always be narrow-minded. A professional never changes his first profession. Well and so on. The crowd man won't trust the leader (and a talking head on the air of America's leading financial television channel is always a claim to leadership), who are simultaneously engaged in many cases "professionally".
Think, what a phenomenal success, the popularity and level of mass trust in Jim Kramer is based solely on his charisma, but not on that, what he earned 100 million dollars as a hedge manager. Because a question immediately arises in the head of an ordinary person: “Why the hell are you doing a clowning on the screen?, if you already have 100 million dollars?!». Street Joe just can't understand, what are these 100 million dollars do not end ambition in life, and there are others, no less pleasant arguments (glory, for example, or popularity).
Charisma is a completely different matter.. Jim Kramer's charisma is a phenomenal ability to manipulate consciousness. Almost on a hypnotic level. Do not be lazy to search YouTube for a couple of Kramer's performances in any of his programs and watch them. Look specifically in terms of the effectiveness of audience manipulation. Aerobatics! This is ace, like you've never seen in the context of the stock market.
It's time to take stock. Firstly, we found, that direct professional involvement in the exchange industry is an even worse calling card, than the profession of a financial journalist. If the crowd does not believe the journalist because, that he is a "buffoon", then the director of the hedge fund is not trusted and even more so, because that one has "vested interests", and therefore he “only says that, what is beneficial to him " (Jim Cramer, as you remember, had a pretty hand in disavowing the authority of directors and brokers). So the profession of financial analyst, no matter how biased she really is (by virtue of salaried status), still remains the benchmark for public trust.
Secondly, I tried my best to demonstrate to the reader, that the manipulative talents and charisma of a particular person is an equally powerful instrument of influence and pressure on public opinion, than belonging to the learned fraternity.
In short: people, Be carefull! I warned you.
A source : insider.pro
