Cramer's 'Mad Money' Recap: Know Your Guru

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Editor's note: The following is a recap of a "Mad Money" episode that originally aired Dec. 25, 2006.

"When it comes to your money, faith doesn't cut it," Jim Cramer told viewers of his "Mad Money" show. "If you want to be a truly great investor then you need to be a skeptic, if not an all-out cynic."

Whenever someone makes a pronouncement about a stock or about the market, those listening "should always consider the source," Cramer said.

Therefore, Cramer devoted the show to explaining how and why he's qualified to be on TV expressing his opinions. "I'm going to tell you why I think my way, my method, is better than putting your money in a mutual fund, or an index fund, or playing around with exchange-traded funds," Cramer said.

Even though it is true he successfully ran a hedge fund for 14 years, that's not why market players should listen to him, he said. Running a hedge fund and investing part time as an individual are two different things, Cramer said. "I was good at one, but on its own that doesn't mean I'm any good at the other."

The thing that really qualifies him, beyond his record at the hedge fund, his experience, and the fact that he "works like a dog to come up with great ideas for the show," is the fact that he "used to play for the bad guys," Cramer said.

Cramer's Path to 'Mad Money'

"Hedge funds, especially with people like me at the helm, are predatory," he said. "They contribute nothing to society, aside from helping the rich get richer, and all too often the tricks these funds pull end up hurting regular people -- ordinary individual investors."

Now, Cramer said, he plays for the "good guys" and knows "all the tricks, all the ways hedge funds maneuver so that they make money and you don't." This also means that he has the "insight, suggestions and caveats" that can help people become better investors.