Guest Post: Performance Anxiety

Tyler Durden's picture

Submitted by South of Wall Street

Performance Anxiety - Thanks Cramer

Performance anxiety can, whether you're honest about it or not, cloud your decisions in this market.  Do you cave to the relative performance derby in order to retain investors?  Its a real issue if you've been on the wrong side of this market or any side for that matter.  The volatility has made investors punch drunk. I'm talking about customers that say flat out: "If you don't get more invested, I'm pulling my account".  How quickly they forget that 2 weeks ago they were of the opposite mindset.

Let me share my story - as I'm sure there are a million like it.  I've been receiving daily calls from an investor for the last 3 months (yes, I should have already fired him).  We've been in 70% cash, which two months ago - in his words - enabled him to sleep at night. Now he can't sleep and is constantly hyperventilating at all the money he is "losing" by being under-invested. Cramer put him over the edge last night, with something to this effect regarding money managers:

Publicly, they’ll stick to their guns and spin negative tales. But privately, they will be forced to buy because they’re so far behind in the market that their investors will demand their money back unless they change direction.

The investor called today to say that we had until the end of the day to be fully invested in his separate account. After hanging up - there I was: make the decision about whether to retain the assets or go against my better judgment and professional opinion.  What's on the line ?  Pride & Fidicuary duty vs. annual management fees.

Congratulations Cramer.  The average investor is listening to you and is about to take it on the chin once again.  Those of us in the real world, who prudently manage other people's money, don't change our stance daily (sometimes intraday) like you do in your nightly poison spew.  We get paid to take a stance and be right more often than wrong... but most importantly...not lose money.  You get paid to sing and dance, and investors get hurt by your cowboy bullshit.

What am I going to do about the investor?

I'm liquidating his account and sending him this book by Howard Marks with a note that says, "You should read this. Good luck."

Now I'm no saint.  I'm just another guy, in the most overpaid industry in the world, trying to make a buck.  If this investor was more than 10% of AUM, I'd be forced to reconsider. And if we had 20 investors with similar demands it would be a difficult call. That's the truth and that's reality.

The point is: please don't listen to Cramer - he really is an idiot.

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FOC 1183's picture

Post of the year

Hippocratic Oaf's picture

Fuck Cramer

CNBC has him on all morning now......like we WANT to see him.

I have to keep all TV's in the office on this shit!

Have to look at his ugly mug on billboard going home on Westside Hwy.

He loves Bear Stearns, Lehman and Dykstra.

Die you fuck!

oogs66's picture

At least he does start his show pointing out that he's not just there to entertain you. Tells me that is his primary purpose. He isn't bad at that function. Too bad investors can't understand that

CIABS's picture

i'm coming to this thread pretty late, but i think it's worth raising the possibility that cramer is a higher-level operative than many believe him to be.  he worked for a certain firm, and for a certain individual at that firm, ahem, and with his nightly show he's well-placed to influence the public.  i think it's possible that for a number of years he was doing his own thing, but now with the show he might be part of a team and no longer freelancing.

obejoyful's picture

Cramers popularity shows the intelligence of the average investor.  If you need a clown to give you advice then you are not mature enough for this activity. I have two children and the shows they watch on Nick Jr are easier for me to watch than that idiot Cramer.  When the market goes down he will say that he told people to be careful even though the week before he was telling people to buy buy buy.

One day one his sheep will lose all their money and will go looking for him.

 

 

Don Birnam's picture

Frankly, this item should run in the WSJ Op-Ed section. Long overdue commentary, regarding this mendacious entertainer.

HedgeAccordingly's picture

What only a 10 point S&P range today..? WHAT?  -http://hedge.ly/tsUxY3 .. maybe crarmer is about to throw in the hat. i respect the guy for trying but.. he needs to respect himself. 

Timmay's picture

Managing money is ultimately a no win situation. Creating money on the other hand....

soopy's picture

But he's got all these buttons that make cool noises!

Christoph830's picture

Brought tears to my eyes...

SeverinSlade's picture

"The point is: please don't listen to Cramer - he really is an idiot."

Most of the smartest things ever said.

Steaming_Wookie_Doo's picture

I'm impressed how this so-called investor actually got any money considering he thinks Cramer has a valid opinion (and track record). Investor-boy would've lost his ass 10 times over on "Buying Bear Stearns" or whatever type of foolishness was being hyped that day. 

I suppose the real problem with idiot investors like this is that:

1. They get a lump of money either via inheritance or selling off some family property. The gist is that they didn't make the money, and likely don't have anyway to duplicate such a windfall again.

2. They think that their acct balance is a direct correlation to their IQ, so the *must* be smart if they've got this dough.

3. Getting on the phone to their fund mgr means that they are a big shot too, and via their self-annointed brilliance, merely being commanded by them will result in you (lowly fund mgr) magically bringing back even more money.

4. If step 3 doesn't work, the fund mgr must be a retard.

 

redpill's picture

Haha well on one hand I sympathize, but on the other hand if you took his money knowing he was a Cramer disciple then you reap what you sow!

Comay Mierda's picture

just put together a history of cramer's recommendations and the abysmal performance record and send it to the guy.

 

cramer is the king of pump-n-dump

bob_dabolina's picture

I just took a cramer like 20 minutes ago. Stunk up the whole establishment.

sheeple2012's picture

Back in the dark ages of early Oct. Cramer was telling his trailer-park audience to only consider stocks that pay a 5% dividend... now he's BACK with cow noises, booyah's, bells, sirens etc. -  what a piece of garbage ...

robberbaron's picture

anyone know how paulson is doing lately? just wondering since worthless piece of shit companies seem to be the most desirable thing in the universe at the moment

Mike2756's picture

probably amzn, up 10 today.

midgetrannyporn's picture

Honesty and integrity are a liability in his business.

FunkyMonkeyBoy's picture

Why the f**k didn't he just go short the market with his clients money?

Central Bankster's picture

With an unsophisticated client like this, shorting the market is about the dumbest thing you can do.  Much smarter to have them wait in cash for opportunities.

sodbuster's picture

You made the right call.

And Cramer is an idiot.

And NO! No! No!  Bear Stearns was NOT fine!!

http://www.youtube.com/watch?v=gUkbdjetlY8

 

 

 

imsaul0968's picture

I dont know anything about you or your company but I bet you arent as successful as cramer was a a hedge fund manager. He is a flip flopper, no doubt about it but he lets price tell him what to do and is quick to change his mind. I guarantee his record kicks the ass of yours so be careful with bashing people that are retired and rich cause of how good they were at playing this game of fear and greed

jcaz's picture

ROFLMAO!   And how's Cramer's fund doing these days?   Oh that's right- he (nod, nod, wink, wink) turned to TV, cause he wanted to help investors like you!

Cramer will impress me the day he admits what REALLY happened to his fund...... At least he hasn't been caught touting again- that was a sweet little scam he had going on, wonder where his buddies are now?

sheeple2012's picture

Is TSCM on the pink sheets yet?

The Axe's picture

Sad for you I feel....Cramer...

NotApplicable's picture

LOL

I had to give you 1up for being bold enough to defend Mad Jim here. I can only hope you're trolling, because it would be really sad if you're actually being sincere.

Booyah!

jcaz's picture

LOL- yep, I send mine the link to Zero hedge when they're yipping, actually-  and I've had them short the last two weeks;  Not one call, thanks!

When Cramer started babbling about his excitement of GDP improving due to non-payment of mortgages, most of mine were able to see him for what he really is.

DavidDavid's picture

In Feb of 2009, Cramer stated on national TV that investors should get out of the stock market for the next five years.  He sold 100% of his daughter's investment account when the Dow dropped below 7500.  In other words, Cramer sold near the exact bottom.  He told everyone to bail out right near the bottom.  All of this can be verified on YouTube.  I predict the Dow will form a MAJOR top near 13,000.  It will then lose about 50% of its value in 2013 & 2014.

DavidC's picture

Not sure about 13,000 but otherwise agree with you.

DavidC

Mercury's picture

This particular crazy client is a different story (and why places like Merrill Lynch were invented) but generally speaking it's often not obvious or explicit how much of any given client's investable capital is under your management.

In other words, let's say if you run a value equity product.  You may be managing most of one client's net worth but only a small portion of another's - and maybe the portion he has specifically designated for that style bucket.  He's already allocated X to bonds and Y to cash and Z to something else. 

Your job as far as he's concerned is to stay all-in (within your universe) at all times.  Raise a bunch of cash at the wrong time (causing benchmark underperformance) and you've got one angry client - especially if he was relying on that one asset class to balance out weaker returns in other sectors/asset classes.

Separate accounts is a high touch business.  Part of the territory.

sheeple2012's picture

Do they still have that website where a monkey trades vs. cramer and usually wins?

SwingForce's picture

You rang? Here's the Bank of America clip again: 11/6/2011 $14.50 

http://www.cnbc.com/id/40949412/

lieutenantjohnchard's picture

over the years i had similar "clients." the best policy from a management perspective was to let the client go, post haste, and concentrate on the best clients, meaning those who believed in the principle of mutually beneficial relationships.

unionbroker's picture

when my clients want to something stupid i tell them to fuck off and hang up. Being a broker has too much liability to take stupid trades..

gianakt's picture

Cramer and some from CNBC will soon be in jail for all the pump and dumping they do!!!

TwelfthVulture's picture

If any of them were actually licensed, they would have been in jail ages ago.

 

I remember it must have been like 2000, early 2001, before 9/11, I was literally printing money in names like ASD, LMT, BA and CNBC were still pumping the same five stocks: CSCO, MSFT, DELL, EMC, & ORCL.  Companies that had imploded before my very eyes.  It was then that I decided CNBC was not much better than the Cartoon Network.

DoChenRollingBearing's picture

I was going to say something about having performance anxiety last night, but, all turned out well.

Kudos to the author for his courage.

yabyum's picture

He should put all of his eggs in the Cramers basket. He will be drinking mouthwash in six months!

blunderdog's picture

Hope you sent a used copy of the book.  Value investing and all.

Zola's picture

Solution is : manage your own money first and then other people's money second like you do yours . If they dont agree FUCK THEM , let them tank on their own

midgetrannyporn's picture

It's called "front running" and it's all the rage these days.

GolfHatesMe's picture

Send the client a link to the Dick Bove upgrades/downgrades.  He just upgraded the squid.

tekhneek's picture

I made a play portfolio following Cramers suggestions along time ago and was down 46% after 6 months on 100k fake portfolio.

I never listened again.

yabyum's picture

Playing fantasy portfolio is the only way to follow cramer.

malikai's picture

That's a gread idea. Maybe I should try out a fantasy Cramer-Fade portfolio. I've had good success fading my TBTF broker advice, but not results like that.