The average person has been convinced that they cannot manage their own money because they either feel that they have no time to keep track of their investments or because the professional money managers have been successful at keeping these people ignorant.

Recent actions by the big boys have shown that they will look after themselves and their own money long before they will look after you or yours. When dealing with the big boys, you’re not just dealing with monetary matters; you’re also dealing with variables such as ego and power- and that is where things get dangerous.

Here are three reasons why the little guy is better off trusting their own Due Diligence rather than listening to the big boys.

1. Jim Cramer:
Jim Cramer is a self-proclaimed protector of the little guy (the small investor) and hosts a daily CNBC show called ‘Mad Money’ where he picks stocks and advises viewers whether to “BUY BUY BUY” or “SELL SELL SELL”.

Cramer has also written three books, which I highly recommend, geared towards the new investor because he does have a great way of explaining stock investing to dummies like me.

However, Cramer’s picks often manipulate the market and cause the inexperienced investor to lose money because they buy a stock based on the ‘Cramer Hype’ only to watch the stock drop when the hype is over.

Not to mention the fact that Cramer, as can anyone, can be wrong on his picks.

In other cases, he flip-flops so many times on a recommendation that you get dizzy trying to keep up only to hear him blame unusual circumstances for his inability to correctly pick the direction of a certain stock. SIRI (Sirius XM) is a prime example of a Cramer flip-flop.

Cramer is an entertainer and often gives great advice, but any credibility as someone looking out for the little guy went out the window when he recently told Americans to pull all their money out of the market for the next five years. He later pulled the ‘slick politician’ game with his quote and revised it to read that everyone who might need their investment money for the next five years should pull it out now. That quote reads better but the damage was already done.

The big boys, with all their capital, have a chance to make money in any market, so it is easy for them to pull their billions out of the market and keep it on the sidelines until the recovery. On the other hand, the little guy, who Cramer is supposed to champion, normally only has the chance to make modest gains in the hope that forty years of those gains will amass them a comfortable wealth come retirement time.

When the market crashed last year and millions of scared investors jumped ship with huge losses was the time that Cramer, as the champion of the little guy, should have been guiding people towards investments and stocks that had a good chance of rebounding with the economy. Instead, he advised people to make their unrealized losses into realized losses and jump ship. Chances are pretty good that the market is going to rebound at some point and those that have ran have NO chance of making up for their losses.

Jim scared a whole lot of people out of investing forever (I know many personally) and unfortunately these people, if they do ever buy back in, will do it when the market is already on the road to recovery and the billions have already started pouring back in. Potentially huge gains will be limited because once the big boys start buying back in things have a tendency to move pretty quick.

Jim got scared and was not confident in his ability to predict the future, so he let his own panic translate to those that have watched and listened to him for years.

Good leaders don’t display their own panic, they make solid and sound decisions based on the information that is available and the resources at hand. Do you think Sully wasn’t panicking when he landed that plane in the Hudson? Sure he was, but he just didn’t show it.

When he originally told everyone to get out of the market for five years, Jim said he advised doing so because he has never seen anything like this before. In other words, if Jim Cramer doesn’t can’t figure it out then no one can. He panicked because his ego was bruised and as a result he scared people out of the market forever.

Ironically, if he thought people were heeding his advice there would be no reason for him to host his television show for five years, but I believe it is still running. I’m not sure because I have not watched the program since he made those irresponsible comments.

2. Warren Buffet:
The most notorious stock picker of all time may be on the downswing of his storied career after his latest letter to stockholders in which he stated that the economy will be in shambles for the year 2009 and beyond.

That statement alone is not one to criticize because no one really knows what the outcome of this crisis will be, however, it was not too long ago that Buffet advised Americans to invest in the bear market in order to take advantage of the gains that will arrive with the recovery.

Buffet is an investing genius and he knows it, so when he saw his recent high-item picks continue to crash (GE is a prime example), he went into panic mode (a la Cramer) and now spends more time trying to retain his image than looking out for the little guy.

Buffet is revered and he loves his God-like status in the financial world, but when a guy like him starts using fear tactics, it scares people away forever and, unfortunately, it is the little guy that loses.

I liked Buffet’s original statement of buy low and wait for the recovery, however, his company set record losses this past year and his ego is hurt; and when someone of his stature gets their ego hurt everyone suffers for it.

For both Buffet and Cramer- It’s OK to say ‘I don’t know’ once in a while. No one has the right answer all of the time.

I still believe in Buffet’s ability to pick solid investments, but now that I see how he lets emotion and ego effect his business decisions I think he may be on his way towards retirement.

Or maybe I’m just overreacting.

3. The Obama Administration:
In my opinion, President Obama is the best thing that has happened to the stock market because the little guy has a chance to buy stocks on the cheap and wait for the recovery.

However, when that recovery comes depends largely on the consequences of Obama’s record-setting spending plans.

The problem with the administration is that we are getting the truth.

If the truth were that the economy is as hopeless as the President says it is (as recently as today when he stated that this past quarter offers no promise of recovery), then he would not have predicted 3% growth for the next fiscal year.

The fiscal year begins in October, so Obama, at least for his own purposes, is predicting a recovery far sooner than he will let on.

The truth is, Obama has a better chance of passing all of his agenda spending as long as the people are scared and give him a green light to do ‘something’, which is fine, but don’t count on getting a straight synopsis of the economy from the administration any time soon.

Once the agenda is set in place, however, the tune will need to change to at least give the impression that the recovery plan is working.

The lesson here is that no one has a better agenda for your own money than you.

Don't trust the big boys, just try to be where they are before they make their move.

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