Jim Cramer: kickstarting his hedge fund

Jim Cramer is infamous. He hosts Mad Money – a show where he talks about the stock market and gives his views on what the market would do. But his stock tips are so bad that he became a meme: Inverse Cramer. Do the reverse of what he recommends and you’ll make money.

But Cramer wasn’t always a bad stock picker. In fact, he was a phenomenal hedge fund manager who made millions for his clients and himself.

The genesis of Jim Cramer

Right after graduating from Harvard, 22 year old Jim Cramer got a job as an investigative journalist. And he was a good one too. He covered the Ted Bundy murders. But then bad luck hit him. His home was robbed.

And then it was robbed again. And then once again! What are the odds of being robbed thrice? Cramer was left with no money or possessions! He actually lived in his car for a while.

He was tired of being poor. He got a gig working as a writer for the “American Lawyer” magazine. And while working there, he decided to go back to school to become a lawyer.

But law schools are expensive. Not to be saddled with a lot of debt, Cramer started researching and dabbling into the stock market. And he did well enough to pay for his tuition!

The weird Sunday ritual

Then Cramer started doing a very weird thing. Every Sunday, he would change his answering machine message. 

“’Hi, this is Jim Cramer. I’m not here right now. Take a look at [company name], which has a good business model…”

Every Sunday, he would pitch a new company’s stock he had researched and invested in. And that changed his life.

Because there was one caller who would call him every Sunday just to hear the new message on the machine. Martin Peretz – the editor of the “New Republic” and a Harvard professor had once called up Cramer for some book review writing work and heard his answering machine. Every week, he would heed Cramer’s stock tips and copy his trades.

The parlay to bigger things

After a while, Peretz got in touch with Cramer and asked him to manage his portfolio of about $500,000. That was a huge amount in the 1980s! 

Cramer did so well with the portfolio that on its merit, he got a job at Goldman Sachs! Which he parlayed into starting his own hedge fund. Cramer would earn 20% of all the profit he made for his clients.

The fund grew to the size of $450 million! And Cramer generated an average return of 24% per year – after his fees – for a period of 14 years!

Cramer merged his love of journalism and stock trading to become a TV host of an investing show! And everyday, over half a million folks tune in to hear him.

And it all started with short weekly messages on an answering machine!

“Create for the world”

Create for the world. And the world will repay you. Jim Cramer runs the most popular investing talk show in the world today – because one day he started sharing his ideas with the world. Freely. 

Sow your seeds. Share your knowledge and wisdom with the world.

What can you give to the world?


Most people don’t share their lessons because they don’t think they are valuable enough. But Jim Cramer started sharing his tips before he was an uber successful hedge fund manager – not after. You’ve got to start where you are. And remember that a 3 year old learns from a 4 year old. 

Just share what you learn. Consistently. That’s the secret to building trust and authority.


Martin Rapaport is probably the most famous diamond trader in the world today. And he became famous, not by sharing his own knowledge. But by curating and sharing the wisdom of the crowd. He would call diamond traders in New York and London and Antwerp and Tel Aviv and Bombay and ask them to send their price information. And then he would curate and publish a price list every Friday and distribute it to anyone who wanted it.

That’s how he became famous. By going beyond merely his own wisdom.


You can actually go a step deeper than Jim Cramer too. And share your process. Share how you learn, just not what you learn. Take people behind the scenes and show them your journey. Show them what you are building.

Build in public. Because that creates accountability along with trust.

This is really powerful because by merely sharing your knowledge, you’re giving good solutions to people. But by sharing your process and building in public, you’re actually showing people the pains and frustrations too.

But merely giving is not enough

The world is a noisy place. You may not get as lucky as Jim Cramer got when his message was heard by Martin Peretz. You have to put in the effort to spread your creation too.

How? You initiate by making a list of a 100 people you know. And let them know that you’re going to start sharing insights about a particular topic, would they be interested in it? Build a base of your first 100 people manually.

Action Summary:

  • Create for the world. Give the world something insightful and different. And give it freely. And the world will pay you back.
  • Once you have something you can give to the world, create a list of seeders – the initial people who will be the first group of receivers.