Confessions of a Street Addict

**teenvestor** Thu Mar 30, 2006 9:12 am

Confessions of a Street Addict
Author - Jim Cramer
Title - Confessions of A Street Addict
Date - May 13, 2002
Rating - $$$$ (4/5 $'s)
Price - $16.38 (Hardcover) 37% savings on Amazon

Despite my dislike for Jim Cramer's stock-picking method a friend recently convinced me to read Confessions of A Street Addict.

The book starts out when Cramer is in 5th grade and he comes home from school everyday to skip the comics and sports to get to the stock tables so he can see which stocks have changed since the day before. After a disappointing presentation where his class refuses to participate in picking stocks he decides to quit it and goes back to baseball.

We then skip ahead to after Cramer has graduated Harvard - where he was editor of the Crimson - and he works for a newspaper in California.

After a stalker steals everything he owns he ends up living in his car with only a .22 and his old boy scout hatchet. Because of this, his boss - who he shows his loathing for through-out the book - ridicules him at the office for the newspaper and sends him on the most ridiculous stories; he was the one who had to interview the next of kin for murder victims, go on the most dangerous trips, and always the overnight trips because, 'He didn't have a home to go back to anyway.'

Eventually he got rid of this job and went back to Harvard Law where he started to like stocks again.

Cramer mentions that if you don't know what to do with your career just go to law school; then you will figure out what you want to do.

Cramer ended up getting cable in his dorm and started spending most of his time watching the stock tickers fly by as he sat at his desk trading all day. When he did go to class he sat in the back and read the Wall St. Journal to find more good trades.

His professors didn't care because he was reviewing their portfolios and giving them stock tips. Eventually Harvard's resident anti-trust expert advised him on a case that he ended up using to make big money.

Because there was no where else to give people stock ideas Cramer would record them on his answering machine saying, "Hi this is Jim I'm not here, but Boeing is a good buy at $12," or other variations.

His future partner at thestreet.com Marty Peretz repeatedly called him and left messages on his answering machine, because Cramer was not interested in what Marty had to offer at the time he didn't return the calls, eventually Marty admitted the only reason he called Cramer was to get the stock picks on the answering machine.

They met for lunch and Peretz gave Cramer a check for $500,000 so he could manage it. Cramer promptly lost $78,000 within the first few days. After repeated sleepless nights Cramer immediately told Peretz he had lost the money, would give it back, and mow his lawn until he could re-pay him the lost money.

Mart just laughed and told him to make it back. And so was Cramer's first paying client.

Cramer then attempted to get into the coveted summer job at Goldman Sachs where thousands of business school MBA's didn't have much of a chance - much less a Harvard lawyer with no real investing experience.

However Cramer was persistent and once stayed in a window-less room waiting for an interview for six hours. In his next interview he wowed the people grilling him by knowing about each of the stocks on Goldman's list and recommending new ones for the list. After the interview he took the wrong jacket and didn't realize it until right before Goldman closed, when he got back to take his his interviewer thought he had stayed the whole time and remarked about how he liked that in a candidate.

Cramer got the summer job.

He went on to endure the torture new investment bankers go through - see Monkey Business and Liar's Poker for more on investment bankers and what they go through for their big checks. Because of a presentation where he had to go to keep his job he missed his sister's wedding.

After repeatedly getting in trouble for buying stocks on his recommended list - not Goldman's - for his clients he quit Goldman and decided to open his own hedge fund.

Expert hedge fund manager Michael Steinhardt took Cramer under his wing and gave him an office in the building and told his traders to train Cramer.

This is where he met the trading Goddess, Karen, his future wife and partner at the hedge fund.

Eventually he moved into his own building where the Trading Goddess would put him and all the traders through a vicious grilling on why each stock was owned everyday morning. If she didn't like a stock that the fund owned she would simply sell it when the trader who had originally bought it took a trip to the bathroom, this undoubtedly created a few cases of kidney disease for frightened traders.

Later when Karen became pregnant she left the fund and would only come back for one more day before moving into owning only bonds.

After a while Cramer realized the rising popularity of the internet after internet chat rooms had cause some small cap stocks he wrote about in Smartmoney to shoot up. He developed the idea of starting a subscription website.

One weekend Cramer, Marty Peretz, business writer Michael Lewis and others came together to discuss the idea of building the website. Thought Lewis agreed to write for them, then never returned any calls, he did come up with the name of the site: thestreet.com

Thestreet.com would go on to have two criminal CEO's; one was an alcoholic who did no work and one gave Barbara Streisand free stock just to get a private dinner, their names were Desai and Kevin English respectively. Thestreet.com also went a day and a half into trading before it opened on the IPO, the book has more stories on Cramer's struggles with the site.

On his last trading day Cramer went crazy while one of his trades, Brocade, kept going down during this rampage he destroyed two keyboards, two phones and almost overturned his desk, all while shouting that fu**ing Brocade. After this episode, which apparently happened often, Cramer decided he was not going to miss any more family vacations or soccer games and he hung it up.

The next day he went in and announced his retirement from the fund after, being in cash for the '87 crash, almost dissolving in '98 while down 30%, buying into the next crash to make millions in one day and being down 9.9% in his first week after he promised investors the fund would close if it ever went down 10% or more.

After this he stopped waking up at 3:45 am, stopped fining traders for bad trades and stopped sending his blood pressure up 100 points when a stock fell 1 and embraced his new full time job at thestreet.com.

I loved this book and devoured it in a few days, I feel it is required reading for anyone who is contemplating starting a hedge fund or who is leaning towards trading and speculating instead of investing.

Other Cramer Books

Real Money

Trading With the Enemy

**springsnailt** Thu Mar 30, 2006 10:20 am

I've read all the books you've mentioned here. But the review is a bit hollow and not very informative. A summary of COSA is not intersting in itself, and the most interesting part is missing in your note, that is, how Cramer uses insider info to trade.

And there is a reason why Cramer wrote COSA in the first place... it's because Nick Maier's Trading with the Enemy.

**teenvestor** Thu Mar 30, 2006 10:43 pm

We obviously are thinking differently about this post. I only wanted to review this book and how much trading can damage your lifestyle.

What do you think is hollow about the review? My goal was to review the book and leave some parts to the reader to find out in his reading of it. I couldn't really care less about why the book was written and the only mention of insider info was getting to know the analysts opinion before it was made public and calling CEOs all day to find out what they think.

I really think you were quick to judge here and maybe didn't read the whole review it's obvious you didn't think about my objective before replying.

**springsnailt** Thu Mar 30, 2006 11:08 pm

You put your writing in the contest, didn't you?

I'm just leaving my opinion, nothing else. Jim Cramer is no movie star, and I don't really care about how his life has been ruined or blossomed because of his personality or trading or whatsoever. JMHO, the review didn't reflect what's interesting or special about the book.

You don't have to agree. I don't usually judge the objective; it's the quality that matters. I'm quick to read so I'm quick to judge, which makes perfect sense.

**FutureHFGuy** Thu Mar 30, 2006 11:14 pm

You two shouldn't be arguing over this - you were looking for different things in the book. Mike was interested in seeing the (often unstated) cons of trading and their physical impact on you while Spring was interested in seeing how Cramer developed his own "edge."

This isn't a forum for personal bashing, it's an investing forum, now let's keep it mature.

**DonQuixote** Sat Apr 01, 2006 1:31 pm

Good review. This book is on my to-read list. I like Jim Cramer, not because of his stock picking or trading strategy, but because of the energy. I watch Mad Money and listen to his radio show on thestreet.com. I'll probably get this book in paperback.