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Apr.17
8:07 PM ET
Friday, 17 Apr 2009
Bonds Vs. Stocks

Cramer likes to retell relevant stories of his early days at Goldman Sachs [GS  Loading...      ()   ]. One of his biggest revelations as a newly minted broker came when he was reporting to now New Jersey Governor Jon Corzine, who at the time was head of the investment bank’s fixed-income division. Despite all of the attention stocks get, Corzine said, bonds were much more important.

Try telling that to Cramer, who’d been following individual equities since childhood. But Corzine spoke the truth: stocks were bush league. Anyone who wanted to play in the majors needed to understand bonds. After all, companies raise much-needed cash through bond issuance. And the ability to do so is directly related to the health of the overall economy. So if there’s a problem in this market, it will ripple out across all markets.

This is why Cramer so emphatically cried, “They know nothing!” back on Aug. 3, 2007, (easily one of CNBC’s top moments of the past 20 years on air). He knew there was trouble in the bond markets and that it would have a tremendous impact across the board. So investors who are serious about making money need to follow bonds with the same level of vigilance.

Watch the video for Cramer’s full report on bonds.




Cramer's charitable trust owns Goldman Sachs.

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