mea culpas

are no fun. On


"Squawk," Mark Haines asked me whether I, champion of the do-it-yourself investor, think I went too far, given the losses that individuals have suffered doing it themselves in this market. I could have given the standard line about how great democratization is and said that the individual will come back stronger than ever. That would have been so simple to do.

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But I have been feeling terrible of late about the outsized losses that people have experienced. Of course, people who used brokers also took heavy losses, but I think that the do-it-yourselfers took on too much margin and never understood the sell call and tried, basically, to be like me. And I can tell you that I valued brokers very much at my old job. They helped me immensely.

I immediately got a lot of email from people saying that I had been way too hard on myself, and that I never underestimated the risks. I am grateful for those. I know in my heart though, I made it sound easier than it was. I compared investing to going to

Home Depot

, but even if you go to Home Depot, you may not want to buy electrical equipment. Some of what people did in this market was financial electrocution, and my hands aren't clean given my often glib stance about doing it yourself.

One letter, though, resonated so loudly that I want to share it with you. It will take some time to read, but it conveys a serious question about something I didn't say on the air that I should have, so I am reprinting it here:

Dear Jim, I enjoy your work -- both in print at and on the air. Sometimes we agree, sometimes not, but I respect your opinion. That being the case, I'd like to both comment on you and chastise you. I think you made an excellent point on the air today regarding the trap that many investors (and to a certain degree you yourself) fell into in recent months and years -- thinking that the average guy could "learn the game" well enough to simply plug in and take on the markets successfully on his own. As you acknowledged for those that have lives, jobs, families, PTA meetings, etc., this proved to be a task bigger than was anticipated. Another factor I believe is that there are those with abilities in investing -- its disciplines, strategies, emotions -- and there are those whose abilities lie elsewhere. Not every brilliant surgeon, plumber, schoolteacher or corporate executive will be a brilliant investor. As you and I know, the markets are a battleground. We compete against ruthless folks who want to make the money and want us not to. So on one team we have the financial professionals with 12 hours a day (or more!) to the task, years of experience, the emotional talent and the resources of their firms. On the other team we have Dr. or Mr. or Ms. Public who just maybe gets to spend a few minutes or an hour a day on their investments and has a job or a company (and a family) to attend to. You add this to the disadvantage of less experience in understanding the nuances of the game, the real possibility of a simple lack of innate talent and fewer truly valuable resources than those which professionals possess -- well , we know what can (By the way, I think we would agree that simple raw information does not equal resources. As one commercial says, "So what do you do with 8,500 online research reports?") Here's where I feel that I have to take you to task just a little bit. Clearly, Cramer Berkowitz brings value to the table. If you didn't, you would be out of business. Cramer: I retired from that firm Jan. 1, 2001, but the point is the same. Other sophisticated financial firms do as well. And you're serving a sophisticated market to boot. Your clients, I would assume, are not neophytes. They are probably more knowledgeable than the average guy and yet they see value in working with you (or comparable firms). You have something they don't possess. Is this not even more true with regard to the average investor -- the guy with a $250,000 rollover, the corporate executive building a portfolio, the retiree looking to preserve and grow assets while providing income, the lady who just inherited $100,000? My question, Jim, is this: Why don't you tell people that they probably need to work with a financial professional to help them navigate the markets? You say you regret having led people to believe that they could be successful on their own -- why not lead them in a more positive direction now? You step right to the brink of this and then back away. When you were a broker, did you bring value to the relationship? I imagine that you did. Are the markets easier, investments less complicated now? We know they are not. So why is it an anathema to state that professionals can help investors make good investment plans and decisions? We readily recommend that individuals seek professional help in other areas of their lives -- medical, legal, accounting, electrical, mechanical, etc. Why the reluctance to acknowledge that we might just be well-served by professional investment advice? Is it because of the advertising dollars? Are the financial channels and publications afraid to bite the no-load/online/discount hand that feeds them? Are you? Heck, Jim. You use full-service brokerage firms for your executions. Why not just open an E*Trade account for Cramer Berkowitz? Part of that is liquidity and the need for a firm to take the other side of the trade, of course. But part of it must be the ability to have access to the firm's expertise and the need to get good executions. You and I both know that good trades can pay the commission friction. Commission rates at even full-service firms are negotiable, as you know. And most firms serving individual investors offer fee-based programs for the commission-averse. Isn't the relatively small cost for professional financial assistance ultimately well worth it? I can't speak for all brokers/financial consultants. But I know the type of shop we run and I know what we do for our clients and I know what we bring to the table. And it is well, well worth what our clients pay. You've been on my side of the desk. And I'm sure you can understand how frustrating it can be to battle the do-it-yourself/give-it-to-me-for-less/it's-cheaper-online/"what-me, pay-a-fee?" mentality, particularly when I know and believe that we add far more value than we charge. The problem is compounded by on-air or print commentators who foster this mentality either directly ("you're an idiot if you pay someone to advise you") or through deafening silence regarding the value of true investment professionals. Do you agree or disagree with my assessment? If you agree, would you be willing to write a column to that effect? Best regards, Rob Fraim, Mid-Atlantic Securities

Rob, this is that column. I agree with you. While I can be critical of analysts who got swept up, I know that there are many people who would be far more whole today had they spoken to an investment professional who would have preached simple values like diversification or the need to get off margin, commonsensical stuff that almost every broker would do.

I know that people would have done far less harebrained things if they had to run it by a professional. Yes, I worked as a broker and thought I added tremendous value. Yes, some brokers added tremendous value to my old firm, Cramer Berkowitz.

I wish I had made some of the points that Rob made. It certainly wasn't because of "conflicts" with's


business. I think you know me by now enough to know that I wouldn't discourage something good for you if it would hurt advertising, because we set this darned thing up with one customer in mind: the reader.

Instead, I think I got caught up in apologizing about my own role without being able to put forth the very constructive suggestion that a ton of people need help, even though I still, in my heart of hearts, believe that some can do it themselves.

My late mother taught me that it is never too late to do the right thing. Brokerage professionals by and large do a terrific job for what amounts to pennies. It makes a ton of sense to do what Rob says. I don't think I would be in this "diversify, please diversify" mode if I had stressed Rob's points more often.

Going forward, that is just what I intend to do. Thanks, Rob, for keeping me on the right path. Good thoughts all the way around.

James J. Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to