CNBC's Jim Cramer took a stroll down memory lane on his show Thursday to reflect on the history of "Mad Money with Jim Cramer" and how it has evolved over the past dozen-plus years.
While the "Mad Money" has retained two members of its original production team from its 2005 launch, the show's focus has changed over time from stock picking to stock educating that seeks to help viewers understand the value of index funds, Cramer said. The host said he was inspired to reflect on the show's changes from his interactions with "Mad Money" fans and critics via email, phone, and Twitter.
"We have been doing it for so darn long we take it for granted what we do and tonight you know I'm gonna change that, I'm gonna correct it," Cramer said. "Tonight, I want to talk to you about the show, its evolution, and how you can best use it or worse misuse it, and I am doing so because there's so much we throw at you that you might not be able to use it as effectively as we would like."
The original mission of "Mad Money," which spawned from a radio show Cramer once hosted called "Real Money," was to offer investment ideas. That was prior to the Great Recession, which in 2008 brought the world economy to its knees and "destroyed" many financial firms who lent more money than they had cash available to mitigate the risks, Cramer said.
"I am proud of the fact that if you watched me you might have avoided a lot of that downturn because I shouted from the rooftops that the Fed was nuts ... and that the situation was far worse than anyone realized," he said.
The Recession changed the way that people looked at the entire asset class and used stocks as a vehicle for saving and making money, Cramer said. It also caused a "metamorphosis" for both Cramer and "Mad Money," yielding a new manifesto to inform viewers on stock judgment to pick equities themselves, he said.
That steered the host to talk about "themes" in lieu of the so-called "new ideas or the hot ideas," he said.
"I now say every night in some form or another that this show is meant to educate, to entertain, to teach and I say it different times in different ways each night," Cramer said. "I think that it's just not enough to give you stock ideas. In fact we have deliberately minimized them over the last, well, decade. We want for you to be able to understand the process and to pick them for yourself."
Now Cramer insists his viewers to make use of index funds, stressing not to buy a single stock until at least $10,000 has been socked away into an IRA or 401(K).
"While I have addressed saving for retirement and saving for tuition and emergencies in many shows, I have not ever point blank warned you off individual stocks, so let me do so tonight. I would actually vastly prefer you to invest in index funds than to be say in mutual funds. Mutual funds have not distinguished themselves enough to be able to take the percentages they do."
Cramer also said he wants viewers to gain "exposure" to the stock market because it can make a lot of wealth over time. He said he has a soft spot for the S&P 500, but also has love for a fund that encompasses all stocks in the market and can bring a total return.
"Once again, for those who don't get it, here's my bottom line: The show has changed over time from one where we pick stocks for you to one where we educate you about stocks so you can understand why an index fund of stocks might be worth investing in."