This week, The Simple Dollar takes a look at Jim Cramer’s Real Money. Cramer has made a huge name for himself in stock picking punditry and he claims to reveal his methodology in this book. Is it worth reading? Let’s find out.

In the past, I concluded that Jim Cramer’s success was due to the entertainment factor. I had never heard of him before tuning into his show on CNBC, where his … enthusiasm for picking stocks seems to know no bounds. I generally concluded that he was a cartoon figure and left it at that, but several readers of The Simple Dollar said that he says a lot of things about individual stock investing that are well worth paying attention to.

Thus, I’m reading Real Money this week. The book promotes itself as a guide to sane investing in an insane world, which feels like an ironic title if you’ve ever seen Cramer’s show. In fact, the book is written at an incredibly frenetic pace. The information is thrown at such a rapid pace that, as I was taking notes on the book, I found myself filling a lot of pages with information.

This book is a big success if you take one fundamental point away from it and let the rest just build upon that point. What’s the fundamental point? Don’t buy and hold, buy and homework. Cramer doesn’t expect you to spend five minutes a week on your portfolio; instead, you should spend an hour a week per stock investment. If you can’t commit to that, go buy a mutual fund and don’t lose your money in individual stock investing.

To tell the truth, to really analyze all of the stuff he says in this book, you have to spend a lot of time actually doing the homework to really understand all of the principles. For instance, he spends about eight pages discussing the cyclical nature of the stock market and a general logic underlying when you should invest in certain sectors and when you should sell stocks in these sectors. You can read it in about ten minutes, but it would take hours of analysis to really understand it.

It is this “compressed” feeling that really makes the book feel frenetic. There is a lot of information jammed into these pages, enough that you could easily analyze the teachings of the book for months. Thus, if you actually follow the fundamental principle – buy and homework – then you can’t just blindly follow the rest of the book.

Is it worth the commitment? This week, I’ll discuss just a few of the sections that really piqued my interest when reading Real Money and look at them with a bit of detail. Tomorrow, we’ll get started by looking at Cramer’s advice for the beginning individual stock investor, a class that I would include myself in.

Jim Cramer’s Real Money is the twelfth of fifty-two books in The Simple Dollar’s series 52 Personal Finance Books in 52 Weeks.

You almost can’t avoid that face, can you? He’s on three times a day on CNBC hosting Mad Money, plus his book Jim Cramer’s Real Money, featuring his smiling face on the cover, is almost ubiquitous if you go anywhere near the personal finance section of a bookstore. If you’re concerned about your money and seek advice on it, chances are you’ve seen his face plenty of times in the last couple of years.

I make no claims whatsoever about the strength of his stock picks; one should always research their stock picks and not simply blindly follow the advice of others. Nor do I have any comments about his temper issues (besides the fact that they kind of scare me when he starts going crazy on television); those are for him to work out.

What intrigues me about Jim Cramer is the cult of personality that has grown up around him. There are dozens of sites out there that focus on little else but either lauding or criticising this man, whereas there is significantly less attention focused on other stock pickers. Obviously, the difference is Cramer’s persona, that of a caffeine-fueled raging maniac shouting out stock tips and investment advice while storming around on the set hitting sound effect buttons.

What about this persona appeals to people? I am particularly curious about this since Cramer’s topic is personal finance, an issue that usually ties itself to calmness and careful study, not ranging around like a bull in a china closet screaming at viewers. From a non-investor standpoint (take my nephew, for example), Jim Cramer comes off as some sort of lunatic; Mad Money is the only investment show he’ll pay any attention to because of Cramer’s antics.

I guess that alone reveals the truth of the matter: the real appeal is not in the investment advice, but in the entertainment factor. Most listeners and followers of Jim Cramer are not actually tuning in for investment advice. Instead, they’re tuning in to watch his antics. Maybe they’ll remember a ticker symbol or two to look up later, but mostly Jim Cramer is there to entertain. This explains the “cult of personality” around him; he’s like a stock broker version of Britney Spears.

As for me? I’ll take the hour that Cramer is on the air and use it to do my own financial research and writing, perhaps while being entertained by listening to a record by The Shins. As for his book, it’s actually on my reading list, but as for being a member of the “Jim Cramer Army,” count me out.