I got incredibly lucky with the timing of Mad Money. When we rolled out the show a little more than two years ago, I was perfectly poised to ride two big trends that really have nothing to do with each other but that I had the good fortune to mash together. One of these trends is entirely cultural, and the other is all about making money, and if not for both of them, I would be either a well-regarded nobody or a much more loathed, much less successful somebody. Am I saying that we can look at Mad Money and, like some old-fashioned psychoanalyst, reveal deep-seated truths about the American psyche? I’m not that crazy, although that is the kind of hyperbole that often gets me into trouble. There are reasons for the show’s success, and those reasons reveal something about the people who watch.
From the money side, which may be the more important one, I’m catching a wave that has been building for a long time. In the nineties, people learned the stock market was a game that could make them rich, and they loved it because the pursuit of wealth is our true national pastime. Then in the new millennium, ordinary investors discovered, much to their chagrin, that the game was rigged and stocks became almost as despised as the crooked analysts who peddled dishonest advice to serve the interests of their investment-banking customers. Today, people recognize that Eliot Spitzer & Co. did everything humanly possible to level the playing field, and they want to play the game again, albeit with a good deal more skepticism.
The problem, the one facing virtually every individual investor, is that regular people got crushed back in 2000 not because the game was rigged but because only the professionals knew the rules. The rules are the simple things no one ever bothers to explain when they pontificate about the strength of a company’s fundamentals or the quality of its earnings: Why does any of this matter at all? Why do stocks go up and down? What is the right way to invest? Granted, people got hurt by dishonest research and dishonest accountants, but what hurt more was their ignorance. Ignorance of basic investing principles like diversification, and ignorance of what I like to call the mechanics of the market. Without this information, everyone is doomed to lose the game yet again, but with it, they can win.
You would think something so basic as the rules of the game would come through in most business journalism, but thinking that would be a mistake. Most commentators assume their audience already knows the rules or the commentators themselves don’t have a clue. This is where I come in. Everyone wants back into the game, but they can win only if someone explains the rules, and that someone is me. Am I the best possible messenger for this? I doubt it, but I do the job well. Ultimately, it comes down to this: How many successful money managers would want to switch careers and take a huge pay cut in order to be on TV? I can think of only one who’s that out of his mind, and he’s writing this story. No one is trying to compete with me in this space, and that as much as anything has made Mad Money successful.
At this moment, stocks are back in as the vehicles for our collective avarice, but most investors still need a driving instructor, someone who can explain in plain English why the market works the way it does, someone who comes from the inside to enlighten all the regular people who want to come back to the table and play the game to win. That’s what I bring to the party.
Between my hedge fund, TheStreet.com, and my TV and magazine gigs, I’ve been managing large pools of money and explaining the way the market really works for more than twenty years. I left the hedge-fund business because I’ve already made my money. A guy who got rich picking stocks, who is now picking stocks for you simply because he likes being on TV, likes the thrill of making other people rich, and is so painfully insecure that he’s terrified he’ll be canceled if he fails is a lot more lucrative to listen to than your average run-of-the-mill stock-picker. I’m a loudmouthed, cocky, obnoxious idiot with far too many other character flaws to list here, but my audience is smart. They understand that.
They also know that unlike many stock-pickers, I don’t stand to profit from my advice. I retired from my hedge fund, and my contract with CNBC prevents me from owning any stock other than TheStreet.com. I run a charitable trust, but that trust has heavy trading restrictions that make it impossible for me to use any media platform to jack up its performance. Even if these restrictions were lifted, I still wouldn’t be able to profit from the trust because the profits go to charity. When most guys who run money come on TV, the logical assumption is that they want to pump the stocks they own, but I own nothing. The only self-interest lurking in my stock recommendations is the desire to make myself look good by being correct. My desperate insecurity and outsize ego are your friends.