Alvarion is an interesting stock. This Israeli stock is undisputed innovation leader in the WiMAX equipment space and has managed to stay one step ahead of its competition for years. Let's be up front - I am long the stock, very long. I believe that the stock could easily be taken out very quickly by Intel, Cisco, Siemens or Motorola. Those rumors have come and gone for many years and I don't trade on them. The rumors have caused the stock to be very volatile for a long time, and the stock trades about where it did when the rumors started two years ago. I believe that WiMAX and mobile WiMAX is really going to become a disruptive technology now, and I own the stock for its potential as a standalone company.
Enough about Alvarion for a bit. I want to talk about Jim Cramer. If you are like me, you view all TV these days as something designed to take up the space between commercials. Cramer's got a gig that conveniently works for both CNBC and himself. CNBC gets good traction for its commercials, and Cramer boosts his ego which in turn does its part for theStreet.com and the publishers of his book. Now, you may learn something from watching Cramer - he has indeed been pushing many of the momentum stocks like Goldman, Apple and Boeing. He also would have gotten you into Sears, the New York Stock Exchange, Level 3 and RiteAid this year. As many have pointed out here, his record is very, very mixed in a powerfully up environment.
Now, back to Alvarion. Cramer first came into contact with Alvarion a couple of years ago when a caller asked about it. Cramer turned red and said that he just didn't know the stock. "I've never heard of it." Two nights later, Cramer began his show speaking about Alvarion. "Alvarion is the real deal and I want you in it," Cramer proclaimed. Oddly, he failed to mention that he had been stumped by the stock two nights earlier. Alvarion quickly moved from 7 to 9 (I sold on that development). About two weeks later, Cramer again appeared confused by a question on Alvarion, and a couple months later he said that it was time sell and the stock went down to 7 (I repurchased there). Cramer's quick moves on the stock made clear that he didn't understand it to me.
Last night, I couldn't sleep and was watching his show. A caller during the "Lightning Round" asked about Alvarion, mispronouncing the stock as "elvaron". Instead of correcting the caller's pronunciation, Cramer proceeded to spend the rest of the show talking about how he doesn't trust "elvaron", mispronouncing it time and time again. There is nothing tricky about the pronunciation of this stock. There is an "i" there. Everyone sees it and knows it. Cramer, who supposedly knows the stock and has spoken about it for years, suddenly is so volatile that some caller in Iowa can get him to mispronounce the name of the stock. I don't trust his advice on this stock or any other stock when he shows this lack of knowledge.
Some other random musings about CNBC related to this article:
Stock Mispronunciation: Rebecca Jarvits, who covers the NASDAQ in the morning, often mispronounces the names of small tech companies. All it takes is a phone call to the switchboard to get the right pronunciation and these numbers are readily available. Why can't CNBC use them.
Alvarion: John Najarian, who looks more qualified to bag groceries at Safeway than to give stock advice on Fast Money but seems to really understand options markets, said on TV a few months ago that wireless communications is booming all over the Saudi Arabia, Kuwait and the entire Middle East and that investors needed to get into Alvarion in order to play that. Folks, it is an Israeli stock! Now, Najarian's reasoning is all wrong, but unlike Cramer, he would have gotten you into the right stocks over the last several months. I think that Alvarion was around 8 when he started pushing it. It is now at 14.
Here is the take away: Cramer has thoroughly discredited himself. Don’t listen to him, but pay a little attention to Najarian. At least he is a good dart thrower (he will also teach you how to use options to protect yourself).
Related Articles:
Jim Cramer is Scaring the Livid Daylights Out of Me by Mkhan - Jul 12, 2007
Oh, How these Bald Guys will turn on a dime by JRodgers - Jul 26, 2007
Jim Cramer Microsoft Corporation (MSFT) Mad Money Performance by johnsinger33 - Jul 27, 2007
Qualcomm: Asia Made it and Will Kill It by AronLiv - Aug 27, 2007
Qualcomm Guides Higher and Goes Nowhere by AronLiv - Sep 25, 2007
Counting the Days: Intel and Alvarion by AronLiv - Oct 30, 2007.
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