Thursday, December 08, 2005

Et Tu, Cramer!

Add Jim Cramer to the list of Americans dabbling in Canadian affairs.

Cramer (not the Seinfeld guy, but at least as quirky) has a popular investing program in the United States on CNBC, and is co-founder of the popular investing website, TheStreet.com.

His act is, well, unusual. If you have CNBC on your cable or have the inclination to sample his videos on the website, I encourage you to do so, not so much for the content but for the entertainment value. He’s the WWE meets hyper-caffeinated day trader.

People phone his show for advice and he has them all trained to greet him with a loud BOO-YAH. He doesn’t talk - he yells, he paces around, he mops his brow, drinks water and coffee, hits the sound effect buttons (“sellsellsell”) (*toilet flush*) (“Hallelujah!”),
bites the heads off little bull or bear figurines and for a real treat he throws his computer chair across the room.

I can only take him in small doses.

I guess the quality of his advice is as good as any; to his credit, he keeps track of his good and bad calls on the website.

So, this past Friday, Cramer recommended his audience buy shares in the Royal Bank of Canada, according to the program recap:


Cramer is bullish on the Royal Bank of Canada because of the possibility conservatives might win the January election there. Canadian banks have been performing well even in an environment of rising interest rates and net interest margins under pressure, he said. And, all banks stand to benefit if conservatives win.

But Royal Bank of Canada should do especially well because it is the largest bank in Canada, pays a 3.1% dividend and has seen a "significant increase" in its wealth management division over the last two quarters. If the conservatives win, the rich will get richer, as always happens, he said.


Far be it from me to argue with Cramer but it seems that under the past twelve years of Liberal-led government we have done pretty darn well. Easily better than the United States, economy-wise and stock market-wise. I suppose there are valid economic principles behind the argument that banks will do well under conservative regimes but it’s more important that the country as a whole does well, and the rich are far from my biggest concern.


Besides, basing an investment decision on an election outcome that at the moment appears unlikely isn’t the best strategy, no?


Of course Cramer can say what he likes, and this kind of statement can’t be compared with the NRA and Ralph Reed coming to Toronto and meeting with Conservative candidates, but I’ve been looking for an opportunity to write about this guy and here it is!