Editor's note: As a special bonus to TheStreet.com readers, we will be running an updated version of Jim Cramer's "Twenty-Five Rules of Investing," from his latest book, Real Money: Sane Investing in an Insane World. Here's Rule 21.
Do you know how financial television really works?
I'll tell you. At times, it can just be a gigantic booking machine. That's right, people are scrambling to get money managers on who can talk, almost regardless of how good they are. And lots of times, executives say whatever they want on air, knowing that they can get away with it.
I accept this as a given. I accept that what I hear on television is probably right, but no more than that. That's the world in which we live. That's the reason I follow this tenet:
Just because someone says it on TV doesn't make it so.
Back in early 2005, a money manager came on television and knocked down
by saying some negative things about it, some of which were true. I accepted the fact that he was short it and that he probably shorted the stock right before he went on and that probably what he said wasn't right. Did you think he was right?
I think you are naive if you simply believe what you hear. The vetting process to get on television simply isn't all that rigorous. When a manager says he likes
, do you ask yourself where he bought it? Do you think he might be selling it?
When someone comes on and says that
is a buy, do you think, "He's really stuck in that pig"?
If you answered yes to these inquiries, then you are armed for the daily chatter.
Jim 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
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