Mad money!!! Cramer!

[Slapshot747]

I have just started watching him the last few months and besides his stocks likes and dislikes he gives good advice on how to manage your portfolio...I would like to find out his portfolio that he runs for his charity...without paying and joining his website...

[Slapshot747]

By the way i dont listen to his picks as gospel...Do your own research!..

[questrader]

Wasn't it Isaac Newton who said that "I can predict the trajectory of an object, but I cannot predict the madness of men [in the stock market]?"

Too bad Newton didn't have a personal computer and access to the internet at that time, plus a good charting software, otherwise, he would have predicted his way to billions!

[DanielCarrera]

I wouldn't trust Cramer any further than I can throw him. I consider Mad Money little more than financial porn. His stock picks under-perform the market, he has gotten some serious things wrong. He advised people to buy only internet stocks just before the dot-com bubble burst. He also advised people to buy a lot just before the credit crunch ("don't worry about the price, I know that this sounds irresponsible, but buy anyways"). When the house of cards collapses he gives a revisionist history of his own predictions (just an inch below lying) and claims that he near-predicted the crash.

http://en.wikipedia.org/wiki/Jim_Cramer#Criticism

Do search for Jim Cramer on YouTube. Some great stuff there.

[DanielCarrera]

Too bad Newton didn't have a personal computer and access to the internet at that time, plus a good charting software, otherwise, he would have predicted his way to billions!

Ha ha ha. So your fortune-telling software will make you rich?

[questrader]

Obviously, you haven't made any money in the market to be saying that!

The market is a SAFE investment vehicle. If you master the discipline to read charts, and pick the right stock, even if your judgement is wrong b/c the stock did not rocket upward as much as you had expected, and you are a good stock picker based on the chart, you have more than a few days to get out at more-than-break even prices, that is if you picked the right stock based on experience with reading charts. I've had too many occassions where this happened, and I made a few bucks on being wrong! The only time(s) when I was wrong and lost money was for being stupid and greedy and not sticking to chart-reading discipline.

[DanielCarrera]

The market is a SAFE investment vehicle.

This is getting quite funny. Believe it or not, all investments have a form of risk. Stocks are riskier than most alternatives and that's why investors demand higher return. This is known as "risk-return tradeoff". Look it up.

Anyways, I believe that looking at charts to predict the future is not much different from tea-leaf reading and fortune telling. I wouldn't trust a chartist any more than I'd trust my horoscope.

The only time(s) when I was wrong and lost money was for being stupid and greedy and not sticking to chart-reading discipline.

Funny. When you make money you say "look, it works!" and when you lose money you say "it was my fault". Look, the fundamental problem is that humans have too much of a tendency to see patterns where there are none. This is coupled with hindsight bias which means you can always convince yourself that you could have predicted xyz after the fact. Read a book on behavioural finance, it's very interesting.

[brunes]

Funny. When you make money you say "look, it works!" and when you lose money you say "it was my fault". Look, the fundamental problem is that humans have too much of a tendency to see patterns where there are none. This is coupled with hindsight bias which means you can always convince yourself that you could have predicted xyz after the fact. Read a book on behavioural finance, it's very interesting.

Agreed. However the same thing that makes people likely to see patterns in chaos is also the same thing that makes them gloss over other things that don't fit their pattern - thus you'll never win this argument with the chartists :)

It's kind of like trying to argue against religion.

[Tekkan]

http://www.businessweek.com/bwdaily/dnflash/content/jun2007/db20070619_372116.htm

Stock market is just like playing poker. About 50% skill , 50% luck.

[codemonkey]

I wouldn't trust Cramer any further than I can throw him. I consider Mad Money little more than financial porn. His stock picks under-perform the market, he has gotten some serious things wrong. He advised people to buy only internet stocks just before the dot-com bubble burst. He also advised people to buy a lot just before the credit crunch ("don't worry about the price, I know that this sounds irresponsible, but buy anyways"). When the house of cards collapses he gives a revisionist history of his own predictions (just an inch below lying) and claims that he near-predicted the crash.

http://en.wikipedia.org/wiki/Jim_Cramer#Criticism

Do search for Jim Cramer on YouTube. Some great stuff there.

Agreed.

I remember watching a talk by Chris Browne of renowned value investing firm Tweedy Browne. He mentioned that someone took the time to document all of Cramer's picks around 2000ish. At the time, Cramer said that the great thing about his picks was that since the companies didn't make any money hence, one did not need to waste time trying to value them and should pay whatever the price was!!!!

A couple of years later, the average loss on his suggested portfolio was 90% according to Chris Browne.

Maybe Cramer can be somewhat excused for his "advice" during the dotcom bubble because the madness of men reached incredible heights. However, as recent as a few months ago (before the subprime meltdown started hitting all the business news pornographers), he said that this is a market where you HAVE to buy expensive stocks because they will get more expensive. This is THE WORST advice ever given in the history of stock market investing. This is akin to committing financial suicide. This thought process has caused fortunes to go up in smoke. This is the greater fool's theory. You know you're buying a piece of overvalued crap for a lot of money but you're hoping that down the road you will find an even bigger fool who you will be able to sell off your piece of overvalued crap to for an even more overvalued price than the one you paid. This is one of the fastest way to get to bankruptcy - especially when Mr. Market goes nuts which he ALWAYS does every now and then.

Cramer really is doing a real disservice to the American public and their financial education. On one hand, you have guys like Ben Graham, Buffett, Munger, Bogle, Greenblatt, Chou/Sarbit/Irwin Michael (in Canada) etc trying to educate the average joe on how to invest properly, give them a proper framework to think and then there is Cramer undoing all that good work with his idiotic and often completely illogical and irrational "advice".

I, for one, have never figured out how Cramer has a buy or a sell opinion on every single stock out there. Buffett says that if he has a couple of good ideas in a year, it must have been a great year. Sometimes years go by and he doesn't have anything. But good ol' Cramer, however, has an opinion on every stock that a caller asks about. Just remarkable!

[DanielCarrera]

However, as recent as a few months ago (before the subprime meltdown started hitting all the business news pornographers), he said that this is a market where you HAVE to buy expensive stocks because they will get more expensive. This is THE WORST advice ever given in the history of stock market investing. This is akin to committing financial suicide. This thought process has caused fortunes to go up in smoke. This is the greater fool's theory. You know you're buying a piece of overvalued crap for a lot of money but you're hoping that down the road you will find an even bigger fool who you will be able to sell off your piece of overvalued crap to for an even more overvalued price than the one you paid. This is one of the fastest way to get to bankruptcy - especially when Mr. Market goes nuts which he ALWAYS does every now and then.

Absolutely. You have echoed my thoughts eloquently. I'm beginning to see Cramer as a trend follower, "castles on air", "greater fool" sort of analyst. He assumes that whatever happened last month will continue forever and revises history to claim predictions.


On one hand, you have guys like Ben Graham, Buffett, Munger, Bogle, Greenblatt, Chou/Sarbit/Irwin Michael (in Canada) etc trying to educate the average joe on how to invest properly,

Indeed. I don't know everyone in your list, but the ones I know I have the highest opinion of (Graham, Buffet, Bogle).

I, for one, have never figured out how Cramer has a buy or a sell opinion on every single stock out there. Buffett says that if he has a couple of good ideas in a year, it must have been a great year. Sometimes years go by and he doesn't have anything. But good ol' Cramer, however, has an opinion on every stock that a caller asks about. Just remarkable!

Indeed. Buffet's concept of a "circle of competence" is a complete opposite of Cramer. Buffet says that it doesn't matter how small your circle of competence is, so long as it is well defined. He says that he never invests in technology stocks or any industry he doesn't understand and that's great. There are enough industries he does understand (like Coke, candy and insurance) to find investments.

Thank you for your post. You've echoed my thoughts more eloquently than I could have.

[DanielCarrera]

http://www.businessweek.com/bwdaily/dnflash/content/jun2007/db20070619_372116.htm

Stock market is just like playing poker. About 50% skill , 50% luck.

I think little of stock-picking skill unless your name is Warren Buffett or Peter Lynch. That said, I do believe in "investing" skill, and that this comes down mostly to (1) taking reign of your emotions and (2) not fooling yourself into thinking that you can predict the market or that you are especially smart. Even Buffet doesn't claim especial skill or intelligence beyond the above. Indeed, he feels that recognizing all the many areas that he does not understand and only investing in his "circle of competence" has been critical to his success.

Btw, Buffett recommends index funds for most people.

[advantage21]

"Bear Stearns is Fine!"

http://www.youtube.com/watch?v=gUkbdjetlY8&NR=1

[Thalo]

At least he was right about the "takeover"

[BillyParadise]

It always seemed to me like a bit of a scam. He tapes his shows in the afternoon. He has a newsletter that he charges for, that comes out in the afternoon. From what I've heard, you get the same tips in the newsletter before the show airs, which is after the markets close.

A lot of poeple take what he says as gospel, so there's often a pop in a stock when he pumps it. If you buy the newsletter, buy his pumps as soon as you get them, then sell the next day when all of his faithful viewers buy, some good money could be made.

Disclaimer: I haven't backtested this, I dont subscribe to the newsletter, but the idea may warrant further investigation.


BP

[goobelygoop]

It always seemed to me like a bit of a scam. He tapes his shows in the afternoon. He has a newsletter that he charges for, that comes out in the afternoon. From what I've heard, you get the same tips in the newsletter before the show airs, which is after the markets close.


You DO know that's ILLEGAL, right? I'm 200% sure you're wrong on this one.

"Bear Stearns is Fine!"

http://www.youtube.com/watch?v=gUkbdjetlY8&NR=1

It's funny, because not once do I hear him saying to BUY or HOLD the *stock*. You should have maybe posted this (http://www.youtube.com/watch?v=i0Y2_LS5mHQ&feature=related) to give a better context to his comments.

However, as recent as a few months ago (before the subprime meltdown started hitting all the business news pornographers), he said that this is a market where you HAVE to buy expensive stocks because they will get more expensive. This is THE WORST advice ever given in the history of stock market investing. This is akin to committing financial suicide.

I'd LOVE to see some proof of this. ALL the videos are available on CNBC.com, btw, so it should be easy for ya to pluck out.



Either way, I'm by no means defending Jim. But you guys are missing the general point of the program, which is to EDUCATE viewers. He teaches new investors that's important to do your HOMEWORK on your investments, how to do diligent research, and then shares his tips/techniques. If YOU buy stocks on his advice without doing research, then it's your own damn fault. I don't get how difficult that is to comprehend really.

I find it even more hillarious because the show that airs before his, Fast Money, gives a wide array of daily stock picks from FOUR panelists and so many of them are incorrect. Yet they don't face nearly the same backlash as Jim for some reason. On top of that, there's tons of "regulars" that come on CNBC, FBN or BNN everyday giving horrid advice, and again, they don't face the same criticism as Cramer.

[asdfvcx]

You DO know that's ILLEGAL, right? I'm 200% sure you're wrong on this one.

Are you sure? If he worked for a company he was talking about it would definitely be illegal.

But seeing as how he is just a journalist, I don't see what the problem is. There's nothing illegal about giving stock picks in a private paid newsletter, as long as you aren't using inside information. Why would there be a problem if you later publicly release the same information from the paid newsletter?

[advantage21]

It's funny, because not once do I hear him saying to BUY or HOLD the *stock*. You should have maybe posted this (http://www.youtube.com/watch?v=i0Y2_LS5mHQ&feature=related) to give a better context to his comments.

I like this one better:

http://www.youtube.com/watch?v=772PXNSrSiI&feature=related

So when Cramer talks about BSC with an overlay of the graphics of the stock chart at the same time, he was really talking about the bank deposits.... BTW, how many deposit accounts do you think an Investment bank (http://en.wikipedia.org/wiki/Investment_banks) holds from Joe Average? Does Cramer really thinks he can cause a run on the bank?

[goobelygoop]

I like this one better:

http://www.youtube.com/watch?v=772PXNSrSiI&feature=related

So when Cramer talks about BSC with an overlay of the graphics of the stock chart at the same time, he was really talking about the bank deposits.... BTW, how many deposit accounts do you think an Investment bank (http://en.wikipedia.org/wiki/Investment_banks) holds from Joe Average? Does Cramer really thinks he can cause a run on the bank?

Well a few things..

1) The "stock chart" issue is kind of silly, especially if you watch CNBC throughout the day. Any mention of any public company, and they tend to throw up at least an intra-day chart of the stock. The same happens on his show ALL the time, and has since day 1.

2) It's naive to suggest that ALL of his viewers are "Joe Average" -- CNBC *does* have the audience with the highest net worth in all of television, so many of their viewers would probably have their funds with BSC and others.

[goobelygoop]

Are you sure? If he worked for a company he was talking about it would definitely be illegal.

But seeing as how he is just a journalist, I don't see what the problem is. There's nothing illegal about giving stock picks in a private paid newsletter, as long as you aren't using inside information. Why would there be a problem if you later publicly release the same information from the paid newsletter?


No. There was already a very big controversy about this a few months ago when it was suggested by Barrons magazine -- because of that, CNBC threw Barron's staff off their air. On top of that, there's a reason why the show is pre-taped and NEVER, EVER live. It's combed by a team of lawyers every night, without missing a single episode and/or stock pick. There's a lot of legal issues with this program, and many times certain segments have to be re-taped or completely scrapped at 4:30 ET, when the review is complete.

In addition, if you're not familiar with it already, do a bit of research on the "Cramer 'bounce'" ;)

[asdfvcx]

No. There was already a very big controversy about this a few months ago when it was suggested by Barrons magazine -- because of that, CNBC threw Barron's staff off their air. On top of that, there's a reason why the show is pre-taped and NEVER, EVER live. It's combed by a team of lawyers every night, without missing a single episode and/or stock pick. There's a lot of legal issues with this program, and many times certain segments have to be re-taped or completely scrapped at 4:30 ET, when the review is complete.

I'm not saying that he releases a private newsletter before the show that discusses the same stock. I have no clue if he does or doesn't.

What I'm saying is that I don't understand why you are certain it would be illegal. I'm well aware that the SEC has pump and dump rules, and other similar regulations.

But I don't see how publicly releasing the information from your own subscription newsletter is automatically illegal.

[advantage21]

Well a few things..

2) It's naive to suggest that ALL of his viewers are "Joe Average" -- CNBC *does* have the audience with the highest net worth in all of television, so many of their viewers would probably have their funds with BSC and others.

It's much more naive to believe that individuals with enough assets to merit an account at an Investment bank would be swayed by a talking head on CNBC, especially Cramer.

You can spin this any way you like, but Cramer was caught with his financial pants down, once again.