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Jim Cramer: Why I'm a Stock Picker

I was, am and always will be a stock picker. It's what I do.

When I read about Bill Miller's departure from Legg Mason, the first thing I could think about wasn't, wow, there's our premier stock picker separating from Legg Mason. Nope. I thought instead about how dangerous his concentrated approach is when one of the concentrations -- in this case, the airlines -- goes bad. Because as Karen Cramer always taught me, you are only as good as your last trade.

When I got started in this business, buying my first stock in 1979, there was no such thing as perfect information. In fact, you had to beg to get financials. That led to some amazing anomalies. Stocks could be radically ill-evaluated simply because there wasn't enough known.

Then when I joined Goldman Sachs as a summer associate in 1983, I got to a first-class business library and was astonished at all that could be gleaned. I had a firm send me a week's worth of research every Friday so I could know what people were saying at all the firms, not just Goldman.

I also had brilliant clients at Goldman who had done a massive amount of work themselves and I often piggy-backed off them after doing a lot of work. Again, hit a lot of home runs.

When I left to start my own hedge fund in 1987, we had a rotational shift going on, perhaps one of the best moments for deft stock pickers. We were going out of Heinz (now Kraft Heinz (KHC) , which is an Action Alerts PLUS holding) and into Alcoa (AA) , also an Action Alerts Plus name. It was obvious and, again, lucrative.


That's when I really cut my teeth stock picking, aided by Karen Cramer's trading acumen and where she married technicals with fundamentals...


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