Bear Market for Advice
By stern on Mar 17, 2008
Take Jim Cramer proclaiming Bear Stearns would be bought for upwards of $12B. That was written two months ago, with a straight face and supposedly valued insight. Huh? Cramer says "I think you will make great money." If you followed his advice, you effectively lost every bit of money you put in, once you subtract transaction costs. Bear was purchased at 99% off, not 90 points below its high of last spring.
Big bets without a surrounding portfolio (risk mitigation or diversification strategy) only increase the risk of ruin -- a phrase for gamblers, not investors.