Jim Cramer: What he's good for and what he isn't

Monday's New York Times discussed the anger of investors who have burned by following Jim Cramer's tips. In particular, his sell call on Dendreon (NASDAQ: DNDN) came back to haunt him quickly. A joke about the movie The Fugitive also caused many critics to question whether he had any idea what he was talking about. Cramer said that the joke was misunderstood, and that he really had researched Dendreon. In light of this, and recent controversy surrounding remarks he made about illegal trading activity at his hedge fund, I thought I would give my take on "What Cramer's good for, and what he isn't."

Mad Money's primary attraction is that it's the most entertaining of the investment shows. Granted, praising a show for being more entertaining than PBS's Nightly Business Report is damning with faint praise to say the least. Cramer screams, throws chairs, hyperventilates, and just generally acts insane. He was one of the better hedge fund managers of his era, and the way the he distills how the market really works for the "home gamers" is terrific. He provides interesting investment ideas, and explains concepts like the PEG ratio in a way that reaches many people who probably wouldn't touch a more conventional textbook on investing.

But intelligent investors should realize that you are not going to beat the market by watching CNBC and buying what Cramer buys. Cramer himself essentially concedes as much, telling the New York Times that " "I'm here to educate, but mostly to entertain. I'm facetious, I'm cynical, I try to have a couple of jokes."

It's hard to gel Cramer's self-effacing description of his show the title of his latest book: Jim Cramer's Mad Money: Watch TV, Get Rich. As sites like CramerWatch.org have shown, Cramer's picks perform little better, and sometimes worse, than a monkey throwing darts at a board. If you find his antics entertaining you should watch the show, and you might pick up some interesting pointers along the way. But no one should rely on Jim Cramer, or any pundit, for their investment ideas. And if you do pick up idea from Cramer, they should be just that: ideas. As he he always says, do your own homework.