I’m involved in a fairly interesting discussion over at Donklephant in the comment threat to Justin Gardner’s post about the Cramer vs. Stewart showdown last night.
The basic question is this — to what extent are individual investors responsible for their depleted portfolios if they weren’t following basic smart investing rules ?
Here’s my basic point:
[T]here’s something fundamentally wrong with putting all the blame for what happened to Stewart’s mother and other investors on Cramer or CNBC in general. If you’re going to invest in the market you have the responsibility to educate yourself and relying on one person, or even one network, is anything put responsible. I’d also note that anyone who was spending the last decade buying individual stocks with money that they couldn’t afford to lose was a fool by definition.
Update: Econ4U makes a similar point:
The stock market can be a dangerous place. That’s why it is important to diversify your assets and not leverage too much of your family’s income. And just like you don’t invest your kids’ college fund based on Terry Bradshaw’s Sunday morning football picks, don’t treat financial television “experts” as if they were preaching the gospel.
As does Megan McArdle:
I am not a fan of financial cable news (Bloomberg usually excepted). I think Jim Cramer should be illegal. Anyone who invests money based on one of these networks, or Wall Street Week, should seriously consider making themselves a ward of the court. Anyone in the business who goes on one of those shows is talking their book. If anyone has a good way to make money above and beyond broad, boring strategies like stock indices or bond funds, will not tell you about it.