Mad Money

Every now and then when I have a few spare minutes and I'm sitting in front of the television flipping through channels, I run into Mad Money with James Cramer on CNBC. I don't know about you, but I can only take so much of his high-energy hype. Watching Mad Money is like watching CNBC's Market Wrap on steroids. I suppose that the fast, almost frantic pace appeals to generation x'ers who grew up on video games and television advertisements. All I can say is that if you are looking for a few minutes of decompression time after a tough day at the office, Mad Money is not the show to watch.

If you know of James Cramer you will remember that he was a huge cheerleader during the tech stock bubble of the late 90's. During those days he never met a tech stock that he didn't like. If you watch his show today or read any of his articles in the various business publications you will also realize that while he has toned down his excitement about tech stocks, he is still a big believer in Wall Street and owning stocks. He is just a little more cautious in his approach to stock picking.

For myself, I'm afraid that I cannot put much faith in the words of a guy who was pumping tech stocks in 1999. Of course most of CNBC's programming was big time hype in 1999 and still is to some extent.

I did find a recent article by Cramer in the Denver Post to be of interest. Cramer pointed out that there are doomers and gloomers who continually see the end of the financial world bearing down on us. He also makes mention that occasionally they are right and things go badly in the markets, but on the whole, the markets prove those people wrong much of the time.

I believe in this case James Cramer hit the nail on the head. No one knows what the markets are going to do today, tomorrow, or next year. If someone devised some method to accurately predict the direction of the market, you and I wouldn't be able to afford it. Chances are, it would never be for sale. The person who created it would never share. Why would they? They would own the goose that lays the golden egg.

When you read some of the amazing claims being made by people who claim to have found the holy grail of the investment universe and that they are making huge profits with little or no risk, you know that they are selling you a pipe dream. That's why I believe that the best way to invest your retirement funds are by evaluating the overall risk of the market and diversifying in appropriate, uncorrelated asset classes.

Always keep in mind Warren Buffet's two rules of investing: 1. Don't lose money and 2. Don't forget rule number one.