Mutual Funds Still in Media Blind Spot

If only the terrible mutual funds out there, the real jokers who lose money, big money, got the scrutiny now aimed at some fellows named Bailey and Coates, think about all the money we would save.

I sit here and marvel at how many articles have been written about this poorly performing two-year-old hedge fund. Where were the tough articles about Alberto Vilar when he was losing people fortunes at Amerindo? Or how about some tough articles on the Putnam group of funds, when they were land mines for investors? Only after Janus (JNS - commentary - Cramer's Take) crashed and burned did the media turn its attention on how bad those funds were.

I have several ideas about why the scrutiny hasn't been turned to mutual funds. The obvious, that they are all advertisers and there is an unspoken agreement in the media not to attack advertisers, certainly can't be overlooked. I say that only because I have attacked advertisers over the years -- probably more than anyone -- and it isn't a good business. But if you care about the long term, telling the truth is always a good business.

Second, nobody in the media really cares about mutual funds. They are boring by design. The managers tend not to come on television, and when they do, they are carefully scripted. You might see them in Barron's, but it is always in a positive light. (Maybe I should have been a mutual fund manager!)

Third, you put enough pressure on the hedge funds, they close. Because the rich people in them read the papers and their statements. You put pressure on mutual funds, nobody cares; the individuals in them don't read the papers and tend not to read their statements.

It's a shame. The real need is for critical reporting on mutual funds because those are the repositories of the funds of people who don't have high-powered advisers.

But if it didn't happen after the crush of the tech funds and after the horrible market timing scandals and after all of the payoffs to get the money in from behind the scenes, it isn't ever going to happen.

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James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS by clicking here. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here. Listen to Cramer's RealMoney Radio show on your computer; just click here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict."