From Hedge Fund Manager To Costumer Collector — How Jim Cramer Conquered Financial Media

Jim Cramer is unhappy with netflix

Host of CNBC’s Mad Money, a daily hour-long show, Jim Cramer tells his viewers which stocks to buy, hold and sell, often in elaborate costume.

Known for his zany on-screen antics and for yelling “Boo-yeah!,” Cramer has dispensed stock market advice dressed as a baby, an executioner, and more recently, a hipster, complete with yellow pants and a fedora.

But he’s had his critics, and he’s made his share of bad calls. Cramer told people to buy the now-defunct Bear Stearns before it collapsed, and not too long after that, The Daily Show’s Jon Stewart lambasted him for being a Wall Street cheerleader.

What all that comes down to, though, is that Jim Cramer is still a man whom everyone is watching. Here’s how he got that way.

Jim Cramer made his first dollar selling ice cream at Phillies games.

Born to Jewish parents in 1955, Jim Cramer grew up in Wyndmoor, Pennsylvania, a suburb of Philadelphia, went to school at the Springfield Township High School in Montgomery County.

He earned his first dollar selling ice cream at the Veteran's Stadium during Phillies games.

After graduating magna cum laude from Harvard he became a reporter, but he was so poor he was homeless.

Cramer worked several entry-level reporting jobs at publications like the Tallahassee Democrat and the Los Angeles Herald Examiner, searching for his big break. His pay was under $200 a week at the time.

Then his modest California apartment was burglarized, his bank account emptied and he was left with nothing, literally. Cramer had to resort to living out of his car.

'I was living hand to mouth, and people would take me in now and then so I could get a shower, change, get a good night's sleep,' Cramer told CNBC.

He returned to Harvard to get a degree in law, but by the time he graduated he was in love with finance.

As a Harvard student, he had access to the just-launched Financial News Network, the forerunner to CNBC, which he watched religiously. He soon became enamoured by the markets.

After he graduated in 1984, he worked briefly at a law firm, but quit when Goldman Sachs offered him a job in what was then the Securities Sales Department, 'helping individuals and small institutions manage their money,' he told CNBC.

In 1987, he quit Goldman Sachs after 3 years and started his own hedge fund.

His hedge fund, Cramer Levy Partners, survived the crash of 1987 because Cramer's girlfriend Karen Backfisch-Olufsen, who was also a professional trader and a partner at Cramer Levy, convinced him to sell out before the crash.

A year later, he married Karen Backfisch-Olufsen, to whom he credits much of his success.

Cramer met Karen when she was working as a trader for Michael Steinhardt's hedge fund. She later went on to work for Cramer's hedge fund.

Cramer attributes much of his success to his wife -- when he would become too emotional about stocks, she would reign him in.

In 1991 when they had their first child, Karen stopped trading full-time. The couple currently live in Summit, New Jersey with their two daughters.

But before she retired, Jim and Karen Cramer were quite the trader couple.

A 1989 issue of Fortune magazine referred to them as 'Mr. and Mrs. Aggressive' in a story titled, 'Are these the new Warren Buffetts?'

From the article:

In a windowless lower Manhattan office, a young married couple with matching desks furiously buy and sell stocks. ''Sell at three-quarters,'' she says to a broker at the other end of her line. ''Terrific. I want to participate,'' he says to his broker. Karen and Jim Cramer, 31 and 34, are the quintessential Eighties couple, equal partners in work and at home...He generates most of the investment ideas; she handles the trades, using techniques she learned at the feet of master trader Michael Steinhardt, head of Steinhardt Partners.

In 1995, he was accused of manipulating the markets while he was a contributing editor at Smart Money.

In addition to trading, Cramer was an editor-at-large at Smart Money. But then three of the stocks he recommended in February 1995 shot up, and he made around $2 million in less than a month. He was accused of market manipulation and Smart Money changed their policy, forbidding non-staff contributors from writing about companies that have outstanding stock worth less than $500 million and are therefore more prone to manipulation. Nor were they allowed to write about a company in which they held more than one per cent of the stock.

From The New York Times:

Steven Swartz, editor of Smart Money, a personal finance magazine jointly owned by Dow Jones & Company and the Hearst Corporation, said that non-staff contributors would no longer be able to write about companies that have outstanding stock worth less than $500 million and are therefore more prone to manipulation. In addition, contributors would not be allowed to write about a company in which they held more than 1 per cent of the stock.

In 1996, he founded

Soon after the fiasco at Smart Money, Cramer decide to publish from his own platform. He started with client and former Harvard faculty, Martin Peretz.

After his hedge fund posted stellar profits in 2000, Cramer retired from trading to focus on journalism.

According to Bloomberg Businessweek:

'In 2000, Cramer's wife, Karen, gave him an ultimatum: Slow down, or else.'

At the end of the year, when Cramer's fund finished the year with 36+ per cent returns, he decided to retire so that he could pursue his passion of journalism.

He turned the company over to his long-time partner, Jeff Berkowitz.

That's when Cramer started branching out other media — books and radio.

He continued to host an hour-long radio show, which was a clear forerunner to his Mad Money show, until 2006.

In 2003, Cramer published 'Confessions of a Street Addict,' a book of memoirs of his life as a trader.

In 2005, he started hosting 'Mad Money,' an hour-long TV show on CNBC.

In the show, Cramer speculates on publicly-traded stocks and offers viewers advice on what to do with their money.

The show has several online features, including show re-caps, in which ''Mad Money' host and former hedge fund manager, Jim Cramer, provides stock traders with all manner of investing advice,' according to CNBC's website.

Another online feature is' Mad Money Mail,' in which Cramer answers viewer questions.

The show became known for Cramer's bombastic personality and crazy antics.

In December 2011, Cramer hosted 'Mad Money' wearing a onsie. He accessorized the look with a pacifier, a stuffed bear and bull, and a fuzzy pink blanket.

But there were critics. In 2007, Barron's wrote that investors could make more money by shorting Cramer than by taking his advice.

From the Barron's article:

A comprehensive and careful review of his stock picks by Barron's finds that his picks haven't beaten the market. Over the past two years, viewers holding Cramer's stocks would be up 12% while the Dow rose 22% and the S&P 500 16%, according to a record of 1,300 of the CNBC star's Buy recommendations compiled by, a Website run by a retired stock analyst and loyal Cramer-watcher.

We also looked at a database of Cramer's Mad Money picks maintained by his website, It covers only the past six months, but includes an astounding 3,458 stocks -- Buys mainly, punctuated by some Sells. These picks were flat to down in relation to the market. Count commissions and you would have been much better off in an index fund that simply tracks the market.

On March 11, 2008, Cramer recommended Bear Stearns — and then it went under.

The media wouldn't let him live that call down, and Jon Stewart accused him of being a market cheerleader in an embarrassing episode.

'I understand that you want to make finance entertaining, but it's not a ... game,' Stewart said to Cramer on the show, 'Mr. Cramer, don't you destroy enough dough on your own show?'

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Still, Cramer stayed Cramer.

Here's Cramer dressed up as an executioner on 'Mad Money.'

And so he continues to dispense financial advice while dressed in crazy costumes on 'Mad Money.'

Here he is dressed as a hipster.

Cramer, who still has his finger in both online and TV journalism, told FutureOfCapitalism that he thinks that 'the web won' over TV.

Even so, online journalism is a tough business. 'Every year your ad rates go down,' he said.

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