Former hedge fund manager Jim Cramer warned CNBC viewers to stay away from purely speculative assets.
On Tuesday, August 30, former hedge fund manager Jim Cramer warned CNBC viewers to stay away from purely speculative assets.
Cramer is the host of the CNBC show “Mad Money w/ Jim Cramer.” He is also the co-anchor of CNBC’s “Squawk on the Street” as well as the co-founder of the financial news website TheStreet.
On June 8, Cramer told CNBC’s “Make It,” “If you’re a young person and you’re thinking about crypto, I think it’s smart. I think that cryptocurrencies should be part of a person’s diversified portfolio. I can’t tell you that you don’t have crypto. I own cryptocurrencies: I own Ethereum. Why did I buy Ethereum? Because I was at a charity auction to buy what’s known as NFTs, and they wouldn’t let me make dollars. I had to buy it on Ethereum.”
“Stay Away from Speculative Assets”
Cramer further added that, “I looked into it and said, ‘Well, you know, I have some qualities that I like (scarcity, value) not as attractive, if you will, as Bitcoin. So, I bought it. These are values of hope. Now I don’t like hope. I think you should never invest in hope, but this is speculative, and one of the things I teach in my classrooms is that it’s okay to own something speculative.”
“You must admit that it is speculative. So you don’t put it in the Procter & Gamble class, [it’s] not Coca-Cola, it’s not Apple, but I suggest and accept speculation. Now, when I started Mad Money, I said, ‘I think you should have a spec and I think you should have a gold stock.”
The Value of Cryptocurrencies
Ever since crypto came along, Cramer has pointed out that instead of 10% being gold, 5% should be gold and 5% should be crypto. He says he has no idea of the value of cryptocurrencies, although he acknowledges that interested people want the opportunity to make a fortune.
He recommends that those who want to invest in cryptocurrencies do so in Ethereum or Bitcoin, which have the largest following and appear to be the most legitimate. “I’d be careful not to borrow money, as a lot of people own them because they’re speculative.”
Warning: “Bitcoin cannot live in your home”
Cramer firmly states that, “Bitcoin cannot live in your house. It is not a mortgage. It’s a sheet of paper, or in this case, it’s not even a sheet of paper. Borrow for your home, borrow for your car, but don’t borrow for crypto.
On July 5, Cramer told Joe Kernen on CNBC’s “Squawk Box” the following: “Right now, everything seems to be going wrong, and I’m not going to deny that all asset classes are being hurt. I’m most interested in is crypto. There are a lot of people into crypto. There’s no real value there.”
In closing, Cramer had this to say on “Mad Money”: “We won’t see the end of this slide until we get a giant laundering of all the things that are speculative, that don’t make money. This is what it looks like when the Fed gets serious… What matters is that we just have to get through it.”
He recommends staying away from unprofitable junk, because, simply put, “there’s no point to any of this, other than parting with your money.”
By Audy Castaneda
