Jim Cramer: Yes the market is rigged, but you can still win
Jim Cramer made a fortune in the stock market as a trader and money manager, and has achieved additional fame (and wealth) as a 'pitchman' for stocks. On the Web and most famously on CNBC's Mad Money, Cramer tirelessly and relentlessly promotes the idea of stock ownership as the key to prosperity for individuals.
Related: Jim Cramer: It's hard to be bullish after the jobs numbers
That theme is certainly present in Cramer's latest book Get Rich Carefully, which aims to be a real "how to" guide for investors, complete with specific stock recommendations (a rarity in books), a list of "bankable" CEOs and a primer on how to use charts.
But it is also a "sobering book," Cramer tells me in the accompanying video. "If anyone thinks the little guy can compete with the big guys...you're a sucker."
Indeed, Cramer writes about the "machine gun bandits" and a "shark-infested corporate landscape" that -- among other forces -- have many investors justifiably scared about getting into the market, much less staying there for very long as recent data on fund flows suggests.
"I can't help someone feeling it's rigged," he says, referring to the recent spate of revelations about widespread insider trading. "I spent a huge part of the booking saying 'listen the forces are against you short term.'"
Related: Yes, the Markets Are Rigged: How to Survive the Shark-Infested Waters
Of course, Cramer's recommendation is not that you should 'walk away' from the market. Instead, "you've got to just roll with the punches and come up with a long-term view," he says, noting high-frequency traders and most hedge funds are only focused on the short term. "You can pick stocks and pick CEOs based on long-term themes and do well" -- as discussed in detail in an upcoming clip from the interview.
The idea of individuals picking stocks runs counter to the academic research showing investors are far better off -- in the long term -- by being passive index investors. But what is dogma to most academics and many investment advisors is blasphemy to Cramer.
"I hate the 'you must index, you can't win'" mantra, he says, comparing academics to the generals in the classic film Paths of Glory. "Listen professor: go do some work. Get out of your ivory tower. Go look at what I've accomplished and what our viewers have accomplished. Stop insulting them with your nonsense and shut up."
Related: Indexing: "the worst way to invest, except for all the others"
Watch the accompanying video to see what Cramer really thinks and stay tuned for more segments from this wide-ranging interview.
Aaron Task is the host of The Daily Ticker and Editor-in-Chief of Yahoo Finance. You can follow him on Twitter at @aarontask or email him at altask@yahoo.com.
