Are you not entertained?! | Viewpoint

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I flicked on CNBC the other day and Jim Cramer (no relation, I swear) was barking at the camera. The more I watched, the more I smiled:  while entertaining, is he helpful? 

Cramer has a well-known schtick. He’s energetic, outspoken, and theatrical. He uses humor, sound effects, and animated rants to make stock analysis entertaining and accessible. He gives rapid-fire winners and losers and opinionated market advice. He clearly appeals to viewers – he’s been on air since 2005.

I’m sure Cramer’s entertainment is lucrative for CNBC’s advertising revenue. But is it lucrative for the viewers seeking investment advice? Does the typical investor need their advice to be paired with flashing lights, bull horns, and clenched fists?

What can we un-learn from Cramer’s approach?

Overemphasis on Short-Term Trading:

• Cramer’s approach focuses on short-term (weekly, sometimes monthly) stock movements and provides specific buy/sell recommendations based on those short-term market conditions.

• The long-term investor stresses the importance of holding stocks for extended periods (multiple years, even decades) and avoiding short-term market timing. Warren Buffett famously claimed, “My favorite holding period is ‘forever’.” Most successful investors would recommend long-term investing with a focus on company fundamentals over short-term trading driven by emotional reactions to news events.

The “Entertainment-First” Approach:

• Cramer has a strong entertainment component, with flashy graphics, sound effects, and high-energy presentations. Should balance sheets and revenue forecasts really be sources of entertainment? Do your portfolio decisions need to be as exciting (or anxiety-provoking) as Josh Allen scrambling for a 3rd down conversion?

• The long-term investor makes decisions based on careful, in-depth research and a more measured analysis of financial statements, market conditions, and economic factors. It’s boring (except for the part where you make money). While Cramer’s energy draws viewers, it’s hard to optimize both financial substance and entertainment at the same time.

Reacting to Noise:

• Cramer responds quickly to market news, earnings reports, or major events, giving zoomed-in, immediate recommendations. He frequently gives new stock picks and changes his recommendations based on short-term market movements. It’s like watching a cat chase a laser pointer.

• The long-term investor ignores day-to-day noise in the market, instead focusing on broader trends and fundamentals. Quick reactions to news can result in frequent trading, which increases costs and risks in the long run. Constantly rotating in and out of positions tends to increase transaction costs (commissions, taxes, etc.) and reduces the ability to capture long-term gains. Professional investors like Warren Buffett emphasize long-term compounding, which often requires patience and low portfolio turnover.

Lack of Consistency in Strategy:

• Cramer’s recommendations shift between different styles—sometimes favoring value stocks, other times recommending growth or momentum stocks—without clear alignment to a specific investment philosophy.

• The long-term investor sticks to a consistent strategy over decades. There are many paths to success…but you’ve got to stick it out. Flip-flopping between styles or asset allocations is akin to “timing the market” – odds are, you’ll be chasing the hot asset after it’s already had its day in the sun. A more disciplined approach reduces the emotional aspect of investing and can lead to better long-term outcomes.

It’s not that Jim Cramer isn’t smart or successful. To be fair, he ran an above-average hedge fund from 1988 through 2000. To the extent that Cramer makes successful picks these days, it has far more to do with the skills that led to his hedge fund success than with the skills it takes to be an entertaining TV personality.

Instead, the problem is that Cramer’s CNBC persona promotes a strategy that flies in the face of battle-tested long-term investing. You don’t need emotion, flair, nor a quick finger on the draw to be a successful investor. You don’t need high-energy or theatrics.

In the end, we should take another cue from Warren Buffett. The most important quality in an investor is temperament—not the ability to yell, honk, or press shiny buttons on live TV. As Buffett said, “The stock market is designed to transfer money from the active to the patient.” Or, in other words, from the guy running around like his hair is on fire to the person sitting back, thinking years in the future.

Jesse Cramer is a Relationship Manager at Cobblestone Capital Advisors and co-host of The Trusted Partner Podcast.