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CNBC’s Jim Cramer reviewed several significant market downturns he’s witnessed throughout his career and looked at the Federal Reserve’s action during those moments.
“Whenever the market goes into a tailspin, whether it’s a Fed-mandated decline or if it’s caused by the White House, or by the real weakness in the economy, you should try to understand why it’s happening,” he said. “Because that has a huge impact on what happens next, and it’s often the key to saving, or losing, a ton of money.”
During his more than 40 years on Wall Street, Cramer said he’s recommended “selling everything” four times. Once in 1987 just before historic “Black Monday” and “Terrible Tuesday” declines, then in 1998 when hedge fund Long-Term Capital Management was in crisis. He also advised investors pull out of the market in 2000 before the dotcom bubble burst, and then in 2008 as the collapse of the U.S. housing market triggered a devastating crash.
Of these moments, Cramer said he only regrets his judgement in 1998. At the time, Cramer’s own hedge fund was underperforming and investors were pulling money out, he said, adding that he sensed “a total collapse.” Cramer said he believed the Fed seemed “oblivious to the situation” even as the spillover from Long-Term Capital Management’s predicament threatened other banks.
