Jim Cramer Panning ETF's

Cramer did not have any direct stock picks here today, although you should read oe watch his take on ETF’s.  Jim Cramer was discussing ETF’s on a pre-recorded Wall Street Confidential on TheStreet.com.  As a reminder he is out on the road at UVA. 

He thinks ETF’s are part of the ‘corrupt’ process in creating product on Wall Street.  This is Wall Street making new baskets and derivatives to drive commissions and Cramer asks who would admit it.  He says it is like saying you want to be in 5 different types rather than being in one theme: MSFT-for software; MRVL -for semi’s; HPQ-for PC’s; CA-for enterprise; MRK….Cramer also says there isn’tt a lot of honesty in the brokerage system.  Cramer also said that there is a misconception that he is pro-trading and he says he isn’t because it is hard to keep up with the constant manipulations on a daily basis.

Once again this is a pre-recorded segment, and more can be found there.  I really don’t agree with the ETF panning today, for whatever that is worth.  I am of the camp that ETF’s are perhaps some of the first things that have actually made sense on Wall Street in a long time as far as a full line of products for Main Street, and while he pans the diversification that is very arguable.  Many fund managers have been taking stances against ETF’s, but keep in mind that ETF’s offer investors a diversified way of playing sectors and segments.  Does that sound a bit like them panning competition?  It does to me.

Jon C. Ogg
February 7, 2007