Jim Cramer is a Fool and he proves it time and time again with Alvarion

Cramer has spoken about this stock time and time again, and he is always wrong. Last night, he set a new precedent by mispronouncing the stock as "elvaron".

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).

 

 

Aron Livrone
Aron Livrone: Aron is a 2008 Wharton MBA with a consulting background prior to moving from Sweden to the US to begin his MBA.

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Comments

  • abcd

    October 14, 2007

    I agree with your opinion on Cramer. Sometimes, I wonder if he is a stock analyst or a silly entertainer. He showed similar lack of understanding when it comes to ETFC. He said he likes ETFC's management and buy it at one time. A few weeks later, he was wrong and he did not understand how deeply ETFC was involved in sub-prime mass. Now he says it is a steal even if ETFC write 1.0B off the book. When all this happens within the time frame of a few weeks, he simply shows either he did not do his homework or he has no idea what is going on.

    It is still very silly to watch all those people following his advice and loose their precious money.

  • THANKFUL INVESTOR

    October 14, 2007

    Dear Aron Liv:

    I really want to thank you for your comments on ALVR. They were so on the money, especially your thoughts on Jim Cramer and his so-called knowledge of stocks, like ALVR. When you look at his track record, the recent Barrons article on the cover the newspaper in severe detail of his performance really tells the tale. Your further comments on how he and others on Wall Street even have trouble pronouncing the names of the stocks they are reporting on is even more hillarious. I own ALVR myself, and this past week's performance on the stock really did suck, and took my huge profit down many many pegs, but that is investing for you. Live and learn. I have been doing this for over 20 years, and believe me when I tell you that this has happened many times before, and will again. I truly like ALVR, and was very surprised at its quick descent, but I saw quite a bit of manipulative moves on Level II, so whatever fueled the downward move may only be temporary, in my opinion. WiMax is a great technology, and when it becomes more widely known and used, the stock will soar. Anyway, thanks again for your great comments on ALVR. Keep it up.

    Very truly yours,

    Thankful Investor

  • One small problem with ALVR

    October 14, 2007

    ALVR is and will be just a small player in the WiMax sector, if and when Mobile WiMax will be acceptable techniology. ALVR will not have the resources and capabilities of winning the large contracts against vendors such as NT, ZTE, NOK, MOT and CSCO.
    If you do invest in ALVR, you should know that you are playing on the speculation that ALVR will be aqcuired by some much bigger company, but there is no guarantee that this is going to happen.
    ALVR might easily go down once again to the $5-6 level.

  • AronLiv

    October 14, 2007

    I just found an article that someone posted about Najarian saying that Alvarion is a telecom carrier.

    http://www.bestcashcow.com/news/article/jdonahue/world-telecom-plays-vodafone-sk-telecom-america-moviles-and-alvarion

  • JRodgers

    October 14, 2007

    I think that you are speaking about Pete Najarian. He is the one regularly on Fast Money. His older brother is John. Both are actually pretty smart - they understand options are you'll learn more from listening to either of them than from listening to Cramer. Even with all of the market hype, Peter Najarian has been pretty tempered in his enthusiasm (except with Apple where the enthusiasm is clearly correct day in and day out). As for Alvarion, I'd be very careful. The stock is too dependent on the growth of WiMAX in emerging markets and I don't know if this entire emerging markets thing is going to last. If their technology were head and shoulders above everyone else's, it would have been acquired already.

  • Dave Weatherspoon

    October 14, 2007

    You are 100% correct about Cramer, but I've followed your other articles on the site and you sold Apple around 150 and Qualcomm around 38, so your own credibility as a stock picker is very, very questionable. I'd suggest that anyone do their own research before following you into this junk.

  • Yossi

    October 14, 2007

    ANAD ALVR and Cramer
    i love the man (cramer) even if he is wrong (alot)
    he said to sell ANAD when it was at about $7 what you think i did....i love this company and i have it since it was at $2 about 2-3 years ago. worth alot more then ALVR and will go to $50 by 2009 strog Buy

  • JRubinstein

    October 16, 2007

    You are definitely right on Cramer and probably right on Qualcomm, but please don't bet the house on Alvarion.

  • JRubinstein

    October 16, 2007

    To be clear, my previous post is intended to say that you are probably right to be selling Qualcomm and not necessarily right to be buying Alvarion.

  • Dave

    October 16, 2007

    Yossi,
    Is it ANAD or ANAL?

    P.S.
    Are you tambal?

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