Cramer’s About More Than ‘Money’

After a tough Harvard Commencement, Cramer got tougher on Wall Street

NEW YORK—For the host of CNBC’s “Mad Money,” Jim Cramer ’77, graduation from Harvard College was one of the worst days of his life.

Cramer, who was the outgoing president of The Crimson at the time, wrote an article criticizing Alan Heimert ’49, then the influential chair of the English department and a former History and Literature teaching fellow, for misleading the Faculty of Arts and Sciences.

Heimert had spoken out against expanding the History and Literature department, which some considered elitist and too selective, warning that if the department opened up its enrollment, the student-faculty ratio would rise.

A trusted professor, whom Cramer would not name, came to him in his last days of senior year with the news that Heimert had told faculty members during a closed session of the History and Literature department that he’d “buffaloed” the Faculty into believing that this ratio rise would actually happen.

Cramer confirmed this story with two other professors, and wrote his last Crimson article slamming Heimert, saying that his words were “rooted more in fiction than in fact.”

Cramer says, with his graduation quickly approaching, he thought he could get away with the article.

But Heimert was Cramer’s House master, and it would be Heimert who would give Cramer his diploma.

According to Cramer, in a customary commencement statement about the seniors in the House, Heimert said, “To Jim Cramer: Who graduated magna cum laude in Government, he says he wants to go into journalism. I hope he comes to me for a recommendation. Because I won’t give him one. Because I won’t give him one. Because he called me a liar in print.” Cramer was waved off the stage and didn’t get his diploma.

“My parents were in tears,” he remembers. “They didn’t stop crying all the way home.”

But vindication came a few weeks later. “We got a handwritten letter from President Bok apologizing on behalf of the University for the travesty that was my graduation.”

He also got letters from the Dean of the College and ultimately Professor Heimert himself.

“I gamble,” Cramer says, looking back at the incident.

MONEY MAYHEM

Twenty-eight years later, the journalist-turned-stock-broker-turned-TV-show-host has the same risk-taking mentality as he did during his undergraduate years.

The path from graduation to his current stint as host of CNBC’s hit show “Mad Money” was one of extremes.

He worked unsuccessfully as a journalist for The Tallahassee Democrat and The Herald Examiner of Los Angeles, graduated from Harvard Law School, worked at Goldman Sachs, started his own hedge fund, and then co-hosted the CNBC stock analysis show Kudlow & Cramer. His show now attracts 384,000 viewers five nights a week. It has turned CNBC’s 6 p.m. slot into one of its most highly-rated hours.

If you’ve never seen “Mad Money” before, picture a pro-wrestler, stockbroker, and Dr. Phil combined.

Cramer throws furniture, pushes buttons to make campy sound-effects and graphics flash across the screen, and takes up to 25 calls from viewers wanting stock advice in the ten-minute “Lightning Round” segment. He is also co-founder of TheStreet.com, an online stock research company worth $15 million, and Cramer Berkowitz, a $450 million hedge fund.

According to an Oct. 31 article in BusinessWeek, Cramer is worth between $50 and $100 million.

Cramer is a study in contradictions. He learned from liberal thinkers and protested against Nixon in college, but says he loved working with his thesis advisor, former Shattuck Professor of Urban Government Edward Banfield, whom he calls “reactionary” and who was later memorialized by Kenan Professor of Government Harvey C. Mansfield ’53, former Harvard and current Pepperdine University Professor James Q. Wilson, and Weatherhead University Professor Samuel P. Huntington. Cramer calls himself a McCain Democrat and says that money won’t make you happy—that it’s almost a curse. He grabs a legal pad and scribbles “$” and “Happiness” in big, messy letters. He writes “Sports”, “Rigor”, and “Business” above that.

“If you wanna play in this league,” the former Crimson sports writer says, pointing to the word “Business,” “this helps,” pointing to “$.” “If you don’t, fabulous. ‘Cause this”—pointing to “$”—“is a major butt-kick in the ass.”

This demonstration is a bit confusing, since his show is called “Mad Money” and is all about, well, making money. And much of Cramer’s career has focused on profiting off the stock market.

And according to a book by Nicholas Maier, who worked under Cramer at his firm, some of that profit-making may have been slightly less then ethical. “Trading With the Enemy” criticizes Cramer for using his CNBC appearances to sway the market in his favor and for working his employees into the ground.

Cramer has since left his position at the hedge fund to focus on the show.

Maier writes in his book that Cramer started each day with the statement, “I love the smell of money in the morning” and would smash computer monitors, throw chairs, and bring employees to the point of tears if prices fell later in the day.

“My firm was a bargain”—Cramer writes this out too—“I will make you rich if you do everything I tell you. But I will at first humiliate and mistreat you—boot camp style—until you do.”

The chair-throwing antics have carried over to the show, but the climate at TheStreet.com seems farther away from Maier’s description of Cramer’s former life. Cramer’s cubicle at the TheStreet.com office on Wall Street is right next to the desks of his research team, comprised of young men in their twenties and early thirties. The guys have small basketball hoops at their desks and toss Nerf balls at one another as they write up columns about the best stock picks for the day. Cramer comes over and picks their brains for stock ideas and information. He gives a few high fives, and then he’s off to Englewood Cliffs, N.J. to film “Mad Money.”

While the research assistants call Cramer demanding, working at TheStreet.com is “uplifting,” says Will Barielski, a 25-year-old graduate of Monmouth University in New Jersey. The research assistants, he says, learn from Cramer and work on “idea generation all day.”

Perhaps still retaining the anti-elitist sentiment that drove him to write about Heimert and that embittered him against commission-based stock advisors, Cramer puts a premium on getting to “the people’s” level.

Cramer understands the extremes of poverty and wealth. After graduating from Harvard and finding his journalism career financially unsustainable, Cramer was homeless and living in his car until he got a job at American Lawyer magazine and was accepted to Harvard Law School.

“I’m just ashamed,” he says. “I don’t want to say I feel guilty about the wealth I have. But I’m ashamed that we’ve gotten to the point in this country where we believe that being poor is just your own damn fault.”

He acknowledges that perhaps 90 million households in the U.S.—out of about 110 million—have the resources to take his advice on the show and invest in the stock market. He says he doesn’t want to give the impression that trading stocks is an easy way to make money; he counsels his viewers to spend one hour per week researching every stock they own.

“If you don’t have time and money, don’t look at me. Go to some bogus guy,” he says. “For twenty years of my life I only worked with people who were incredibly rich. Now I can work with people of much lower economic means and I’m very proud of that. That’s why I like my life now more than my previous life. But that doesn’t include everybody.”

He offers people independent advice through what he calls the first example of “one-to-one” journalism.

“The people are right,” he says, after giving a mini-history lesson about Trotsky and Lenin’s idea of the “lump-in proletariat”—that the peasants can’t be intellectually independent. “It took me a long time to realize that the Lenin-Trotsky model was corrupt. That the institutions that help people are corruptible. But that the people themselves are just dynamite.”

Cramer calls journalism in particular the most elitist institution in the world. The new phase of journalism will take place on the Internet, he says, where journalists will be more of the people.

“The future of journalism will be people who like people, not people who hate people,” he says, not at all joking. “It’s a new model, of which I’m the only one who embraces.”

In an hour-and-a-half, Cramer has covered Trotsky, journalism, and Harvard, and it’s clear as he explains his method that he does not think in a linear fashion.

“At Thanksgiving he is very, very excited. And there’s a million things he wants to talk to everyone about,” Cramer’s nephew Cliff Mason ’07 says a couple of weeks later in the Greenhouse Café. Mason is Cramer’s source about popular culture and young people in general, and part of the reason, Cramer says, that his show appeals to a younger crowd.

“It’s not all about stocks. He says very little about stocks at family gatherings,” Mason adds. “It’s all about everything. It’ll be about books, it’ll be about history, politics, whatever’s going on.”

And most of Cramer’s interview focuses on everything but that day’s stock market.

“The purity that I wanted at college I couldn’t attain in the real life until I had money,” he says, his voice dropping a little. “I regard 100 percent of my ability to tell the truth and have an impact on the truth to be because I have money.”

But with wealth, Cramer feels that he is now free to help make the world how he wants it to be rather than accept it as is.

“In my world Bob Cratchit makes out like a bandit,” Cramer says, referencing Charles’ Dickens’ The Christmas Carol. “He pays for Tim’s operation, and he’s not beholden to me. And he buys his own Goddamn fucking turkey. He gets rich. In ‘A Christmas Carol’…he’s just a beneficiary of Scrooge’s munificence. In my world, he’s Scrooge’s equal partner.”

—Staff writer Katherine M. Gray can be reached at kmgray@fas.harvard.edu.