You Got Screwed!: Why Wall Street Tanked and How You Can Prosper [NOOK Book]

Overview

You've been screwed.
You've been bludgeoned, skewered, crushed, mutilated by the stock market. Every day you read about another corporate scandal: loans to CEOs that didn't have to be repaid, accounting "irregularities," profits that never existed. You think the stock market must have been rigged. And you're right.
You were betrayed by the stock promotion machine -- the mutual fund managers, the brokers, analysts, strategists, and stock gurus...
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You Got Screwed!: Why Wall Street Tanked and How You Can Prosper

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Overview

You've been screwed.
You've been bludgeoned, skewered, crushed, mutilated by the stock market. Every day you read about another corporate scandal: loans to CEOs that didn't have to be repaid, accounting "irregularities," profits that never existed. You think the stock market must have been rigged. And you're right.
You were betrayed by the stock promotion machine -- the mutual fund managers, the brokers, analysts, strategists, and stock gurus who brainwashed you into buying and holding and believing that stocks, like parents, always come through and bail you out in the end.
So now what do you do? Where do you put your money? You can't just leave it in the bank or stuff it under the mattress.
For fourteen years Jim Cramer ran a hedge fund that compounded money at a rate of 24 percent annually after fees, and then he got out at the end of 2000. He knows that there are ways to make money, smart ways that don't require you to own stocks blindly. There are other investments that won't send you to the poorhouse.
This book will tell you what went wrong, who the bad guys were, and what you have to do to restore your financial health. You can't just close your eyes. Ignoring Wall Street isn't the answer. Cash alone isn't the answer. This book has the answers.
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Editorial Reviews

New Yorker
He is the greatest public generator of excitement and knowledge about the market today.
USA Today
The media's most electrifying market pundit.
Newsday
Cramer's greatest asset is his tireless, finger-pointing, jargon-cutting sense of what's happening in business and the markets.
Wall Street Journal
The consummate insider.
Publishers Weekly
If you invested money in the last five years, chances are you lost some of it. Or even all of it. Rounds of layoffs at ill-conceived dot-coms may no longer be making headlines, but the toppling of behemoths WorldCom and Enron have alerted investors to the pitfalls of unprincipled accounting. In this little book, the outspoken commentator and cofounder of TheStreet.com breaks down how such widely touted companies got away with blatant fraud and why investors got screwed in the process. Cramer (Confessions of a Street Addict) uses WorldCom's Hindenburg-like plummet to illustrate how unscrupulous analysts hyped stocks they knew were already overvalued in return for hefty compensation. He goes after Jack Grubman, former analyst for Salomon Smith Barney, who "was the chief proselytizer for unrelenting, ineluctable, telecommunications growth." Grubman's success as an industry cheerleader got the better of WorldCom after he hyped its competitors. Turning his gaze to Enron, Cramer dissects this infamous corporate disaster. He examines who was really at fault, considering Ken Lay, Arthur Andersen, the SEC and Congress. He concludes, "maybe it was just everyone because Enron represented... a wholesale breakdown of every aspect of the legal, accounting, governmental and regulatory bulwark meant to keep corporate America honest." Without condescension, this compact volume serves as an easy-to-read manual on prudent investing as well as a deep-if opinionated-analysis of major bungles in recent business history. (Nov. 4) Copyright 2002 Cahners Business Information.
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Product Details

  • ISBN-13: 9780743247979
  • Publisher: Simon & Schuster
  • Publication date: 11/25/2002
  • Sold by: SIMON & SCHUSTER
  • Format: eBook
  • Pages: 128
  • Sales rank: 511,477
  • File size: 515 KB

Meet the Author

James J. Cramer is host of CNBC’s Mad Money and cofounder of TheStreet.com. His many books include Confessions of a Street Addict, Jim Cramer’s Getting Back to Even, Jim Cramer’s Mad Money, Jim Cramer’s Real Money, Jim Cramer’s Stay Mad for Life.
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Read an Excerpt


Chapter One: What Happened?
"Stocks for the Long Run...Buy and Hold...Next stop, Dow 36,000...Stocks as the only asset class worth owning...Tech Blue Chips...Stocks always come back...Don't ever sell...Selling's for losers...Why not put Social Security into stocks, after all they are the safest investments..."

Ahh, that litany, that rock-solid litany of reassurance about equities. Is there a soul on the planet who didn't suffer from the multiple brainwashings that the media, the academics, the brokerage houses, and the mutual funds mercilessly beat into our heads for a decade? Amazingly, after trillions were lost, we still have no regrets, no apologies, nary a mea culpa from those who heartlessly led us to the financial slaughter that outranks even those of the nightmare generations 1973-1974, and, alas, 1929-1934 -- that's right, the Great Depression. These one-note charlatans would, even after every penny of life savings had been lost, still recite their bogus mantras meant to take our eyes off the ball, and our wallets, even as they suffered not a penny for their admonitions. They haven't learned a thing about the havoc they have wrought. They are still out there shilling their wares, except now they are saying that the stock market is even more undervalued than before. Dow 36,000? You better hope they've perfected cryogenics by then. That's the only way you will live to see it.

This book is meant not as an epitaph to your hard-earned savings, but as an epitaph to their cynical reassurances and pseudo-scientific claptrap. This book should serve as an antidote to their sweet nostrums that have separated you so viciously and silently from your money. In short, they thought that if they got you in, you would never get out, and they would make fortunes off you before you figured out what the heck happened to your nest egg. The charlatans wrote their assurances of ever-higher stock prices when the market skyrocketed daily. Now that it has nosedived, their illogic seems deceitful if not downright larcenous.

Oh sure, the temptation to demonize seems far-fetched to some, particularly those who need stocks to go higher to make a living or have a successful venture. But as someone who has worked in the money business for more than three decades, and compounded money in his own fund at 24 percent after all fees, someone who has seen it all and done it all when it comes to stocks, I can tell you that exorcising demons may be the only way to assure you that it doesn't happen to you again.

Why were the odds stacked so against the individual investor? Why was the bloodletting so incredibly worse than it would have been if the sole cause of the downturn were the economy? Put simply: money, greed -- there was so much money to be made simply by keeping you in the dark about the practices of Wall Street. There were fees to be taken by managing assets; there were underwriter fees, initial public offering fees, fees from advertisers, mainly mutual funds and brokers; there were fees from lobbyists, accounting fees, lawyer fees, and fees from publishers. There were returns, outsized returns, that no one wanted to give up, including the public itself, and there were those huge gains that insiders generated by selling common stock against their options at the very top of the market and long after, enabling them to take out billions upon billions of dollars in gains, some right before their companies collapsed, leaving workers and pensioners holding nothing, not even a bag. The sums appropriated were so fabulous, and the penalties for abuse so small that the temptation to rig individual stocks and even the market itself, in the name of earnings "management" simply grew too great for all but the most holy of chief executives, which, alas, turned out to be too few to be noticed or to matter to battered 401k's. What started as a few apples turned into the whole orchard, but no one in a responsible position in government wants to admit that harsh but true judgment.

The actions taken by the federal government subsequent to the prodding by elected officials such as Eliot Spitzer, the attorney general of New York, who got the ball rolling, certainly helped clarify the conflicts, and even shed harsh light on the most revolting of them. But within weeks of these actions, the complex of interests that kept you in the dark about how the stock market really works was right back in action.

Which is why you need this book and need it now, because if you are going to rebuild your nest egg or fix your 401k, you first need to understand which forces destroyed it. Only then, once you understand the subtle means by which you were fooled into coughing up vast sums, will you be in a position to work your way back to where you were, regardless of the overall market's direction. It won't be quick -- after all, those overnight methods were what got us in this mess. Rebuilding your investments may not even be exciting, but we should have left the excitement for the ballpark or the movie houses. I will recommend to you a steady, solid way to make things back that can't be corrupted by the cavalier forces that coalesced into the current brutal bear market for stocks.

First, though, let's slay those nasty villains, those bear enablers that allowed the ursine capital destroyers to roam just about anywhere they wanted and take from you with reckless abandon. This will be a difficult task, but I intend to help you make your paycheck and your retirement money grow, not shrink, and I don't want your fees, your commissions, or your capital gains. I just want your losses to stop and the capital appreciation to begin.

Copyright © 2002 by J. J. Cramer & Co.

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Table of Contents


Contents

Part One The Bad Actors

One What Happened?

Two The Forces That Took Your Money: WorldCon

Three Enron

Four Rhythms Net

Part Two The Failed Philosophy and Institutions

Five All-Stocks-All-the-Time

Six Executive Options

Seven Mutual Funds

Eight Brokerages

Part Three Now What?

Nine It's a Jungle Out There

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First Chapter

Chapter One: What Happened?

"Stocks for the Long Run...Buy and Hold...Next stop, Dow 36,000...Stocks as the only asset class worth owning...Tech Blue Chips...Stocks always come back...Don't ever sell...Selling's for losers...Why not put Social Security into stocks, after all they are the safest investments..."

Ahh, that litany, that rock-solid litany of reassurance about equities. Is there a soul on the planet who didn't suffer from the multiple brainwashings that the media, the academics, the brokerage houses, and the mutual funds mercilessly beat into our heads for a decade? Amazingly, after trillions were lost, we still have no regrets, no apologies, nary a mea culpa from those who heartlessly led us to the financial slaughter that outranks even those of the nightmare generations 1973-1974, and, alas, 1929-1934 -- that's right, the Great Depression. These one-note charlatans would, even after every penny of life savings had been lost, still recite their bogus mantras meant to take our eyes off the ball, and our wallets, even as they suffered not a penny for their admonitions. They haven't learned a thing about the havoc they have wrought. They are still out there shilling their wares, except now they are saying that the stock market is even more undervalued than before. Dow 36,000? You better hope they've perfected cryogenics by then. That's the only way you will live to see it.

This book is meant not as an epitaph to your hard-earned savings, but as an epitaph to their cynical reassurances and pseudo-scientific claptrap. This book should serve as an antidote to their sweet nostrums that have separatedyou so viciously and silently from your money. In short, they thought that if they got you in, you would never get out, and they would make fortunes off you before you figured out what the heck happened to your nest egg. The charlatans wrote their assurances of ever-higher stock prices when the market skyrocketed daily. Now that it has nosedived, their illogic seems deceitful if not downright larcenous.

Oh sure, the temptation to demonize seems far-fetched to some, particularly those who need stocks to go higher to make a living or have a successful venture. But as someone who has worked in the money business for more than three decades, and compounded money in his own fund at 24 percent after all fees, someone who has seen it all and done it all when it comes to stocks, I can tell you that exorcising demons may be the only way to assure you that it doesn't happen to you again.

Why were the odds stacked so against the individual investor? Why was the bloodletting so incredibly worse than it would have been if the sole cause of the downturn were the economy? Put simply: money, greed -- there was so much money to be made simply by keeping you in the dark about the practices of Wall Street. There were fees to be taken by managing assets; there were underwriter fees, initial public offering fees, fees from advertisers, mainly mutual funds and brokers; there were fees from lobbyists, accounting fees, lawyer fees, and fees from publishers. There were returns, outsized returns, that no one wanted to give up, including the public itself, and there were those huge gains that insiders generated by selling common stock against their options at the very top of the market and long after, enabling them to take out billions upon billions of dollars in gains, some right before their companies collapsed, leaving workers and pensioners holding nothing, not even a bag. The sums appropriated were so fabulous, and the penalties for abuse so small that the temptation to rig individual stocks and even the market itself, in the name of earnings "management" simply grew too great for all but the most holy of chief executives, which, alas, turned out to be too few to be noticed or to matter to battered 401k's. What started as a few apples turned into the whole orchard, but no one in a responsible position in government wants to admit that harsh but true judgment.

The actions taken by the federal government subsequent to the prodding by elected officials such as Eliot Spitzer, the attorney general of New York, who got the ball rolling, certainly helped clarify the conflicts, and even shed harsh light on the most revolting of them. But within weeks of these actions, the complex of interests that kept you in the dark about how the stock market really works was right back in action.

Which is why you need this book and need it now, because if you are going to rebuild your nest egg or fix your 401k, you first need to understand which forces destroyed it. Only then, once you understand the subtle means by which you were fooled into coughing up vast sums, will you be in a position to work your way back to where you were, regardless of the overall market's direction. It won't be quick -- after all, those overnight methods were what got us in this mess. Rebuilding your investments may not even be exciting, but we should have left the excitement for the ballpark or the movie houses. I will recommend to you a steady, solid way to make things back that can't be corrupted by the cavalier forces that coalesced into the current brutal bear market for stocks.

First, though, let's slay those nasty villains, those bear enablers that allowed the ursine capital destroyers to roam just about anywhere they wanted and take from you with reckless abandon. This will be a difficult task, but I intend to help you make your paycheck and your retirement money grow, not shrink, and I don't want your fees, your commissions, or your capital gains. I just want your losses to stop and the capital appreciation to begin.

Copyright © 2002 by J. J. Cramer & Co.
Read More Show Less

Interviews & Essays

Protect Yourself from Wall Street Corruption
Wall Street let you down. Corporate America ground you down. Greedy executives and bankers laid you to waste. And they're all set to do it again, because they've learned nothing.

But have you learned nothing? Are you still trusting your mutual funds that stood by idly as their holdings ripped us all off? Are you still trusting the politicians who are anxious to return to the status quo, where the accountants can lie, steal, and cheat as long as they pay off Congress? Are you still putting your faith in brokers who don't disclose their conflicts or investment advisers who aren't on the same page as you are?

I wrote You Got Screwed because I know that most people still don't know what hit them. They don't understand why their 401(k)s have been shredded or why they can't bear to open their monthly statements. They don't understand the forces that drove the executives at the Enrons and the WorldComs to dissemble about their finances in order to fool as many people as possible. In You Got Screwed, I lay it all out in English. I tell you who let you down, who can't be trusted, whom you have to take your money from to be sure it doesn't happen again. I give you the safeguards that the government will never put into place because they hit Wall Street too hard. I offer you commonsense advice about how to take back control of your finances and fix those 401(k)s even if the great bear market continues. I tell you how to locate a good broker, how to get in better funds, and how to defend yourself against executives who are just waiting to take your money and sell their stock right into your face.

Why do you need You Got Screwed? Because most of the stuff that was done to you was perfectly legal. Most of the accounting fictions and balance sheet hiding that fooled you once will fool you again, because the government's not about to re-regulate and make things better. You need You Got Screwed because, alas, you are about to get screwed again, as neither the SEC nor the mutual funds are in it to protect you from the downside. The government's overwhelmed and reluctant to rein in the special interests. The mutual funds don't want to spoil their huge profit margins by doing the work that you need to be done to be sure you aren't ripped off again.

So, get protected. Get smart about your financial health. Sit down and read this book. It won't take you more than an evening. But it could save you what you have left and begin the long climb back to where you were before the black wave of corruption swamped every 401(k) and IRA in its path. James Cramer

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Sort by: Showing all of 5 Customer Reviews
  • Posted April 25, 2011

    not bad

    Having read all of Cramers books, this was the last I read and not his best. I was expecting more details about a couple of the companies. Was also a rather quick read and where his other works will likely be on my desk as a reference this one probably will remain on the book shelf or loaned to someone.

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  • Anonymous

    Posted September 30, 2003

    Not much effort put into writing this book.

    This book could of been writtin by Jim Cramer over the weekend while sitting in his bedroom. There does not seem to be any research put into this book and Jim Cramer could of easily wrote this book from memory. If you spend even a small amount of time following the stock market, then there will be nothing new to you in this book. I thought that Confessions of a Street Addict was a great book because it showed what actually went on behind the scenes on Wall Street. But if you already know that a stock that is losing money and selling at 300 times sales is a bad investment, then you will find this book boring.

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  • Anonymous

    Posted January 29, 2003

    A little bit of Cramer

    This very short book is pure Cramer. Enjoyable reading. He tells it like it is and places blame for the market collapse of the past three years. This book is really an opportunity for Cramer to complain about the past and to warn investors not to be duped again. For me the highlight is that he posts a list of his personal investments on a web site, and encourages readers to consider copying him to achievce a balanced and safer portfolio. I wish he had added the suggestion of writing coverd calls to make that portfolio of stocks even safer and more profitable.

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  • Anonymous

    Posted November 19, 2002

    Current information + street smarts = Excellect Investing Book

    The bottom line: this book has great content and is a joy to read. I took this book with me on a 7 day Caribbean cruise and had a great time reading it under the coconut trees of St. Maarten and Antigua. Being away from CNBC, Wall Street Week, and the constant media attention to the stock market was a welcome reprise. And so was this book. At first glance this book may seem a little bit light on information. It¿s only 117 pages long at a time when we expect about 300 pages from a typical John Wiley-type finance book. But it¿s not the number of pages that counts, it¿s the information, personal interpretations by Cramer, and solid financial wisdom that matter. By the time I actually got around to reading this book (on those great beaches), I must say that I truly enjoyed it! The book is divided into 3 very distinct parts. The first part is about how the public got totally screwed by Enron, Worldcom, and Rhythms Net type scandals. Since all of these events were so recent it doesn¿t take long before you start recalling all the pieces of information that came out about these cases. Mr. Cramer does a nice job of taking us all back to those days and recapping what went wrong. Each one was revealing in its own unique way. And yes, we got screwed! The second part pinpoints the other culprits in the stock market¿s two and a half year demise (and giant NASDAQ crash!). Cramer reminds as of the all-stocks-all-the-time mentality that came to be at the market¿s peak. Also the potential danger of executive options, shady accounting, too many one-way mutual funds, and always bullish brokerage firms. And by the way, these culprits are still at today!!!!! And finally, there is the last section about what to do. Here is current advice and simple guidelines to avoid getting screwed again in the future. Some of the gems are: 1) Have some bonds for income 2) Have some cash for annual buying opportunities 3) Buy stocks in incremental ¿get your feet wet¿ amounts 4) Buy at least 5 stocks from 5 different industries 5) It¿s okay to sell 6) Sell some on the way up 7) Sell your losers because bad stocks may not go up at all 8) Know your stocks and how they make money so you have a feeling of their value. 9) Buy index funds for diversification and low expenses 10) Hedge funds are better than mutual funds in concept. Here¿s something to research more on. Mutual funds are financial products who¿s time has gone. For those readers who want an enjoyable read, who watch CNBC, have an interest in tech stocks, and feel like they were screwed and want to avoid it in the future, here¿s a book for you. It¿s a reminder of how to keep your head when things get too crazy on either the upside or downside. A very timely piece!

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  • Anonymous

    Posted November 18, 2002

    Getting Streetwise

    This is a fantastic overview of the recent horrors of Wall Street. More importantly Jim gives insight not only into what happened but HOW it happened so you can know more of what to look for when you go out speculating for future investments. The final section gives some of Jim's advice on stock selection and portfolio management. No punches were pulled. This is some essential reading for anyone who is a follower of the Stock Market, new to investing or has some questions about better ways to approach investing.

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