Jim Cramer-Generally Give Good Advice?

[JimInOK]

I've been following Cramer for a short time only. I am getting the impression that he praises stocks while they're high, but then says sell the moment they turn south. Extremely short term time horizon, and more of a "reactor" than an "investor." On the other hand, he seems to be very successful in managing his own fund, so what am I missing?

A cynical person might say he buys a distressed stock, he goes on his show and talks it up, people listen, the stock goes up, he takes the ride to the top, and then when people start losing interest he sells. It would be a win-win -- good TV ratings and good fund results.

[JimInOK]

A cynical person might say he buys a distressed stock, he goes on his show and talks it up, people listen, the stock goes up, he takes the ride to the top, and then when people start losing interest he sells. It would be a win-win -- good TV ratings and good fund results.

True, but he does have a pretty stringent conflicts policy for anyone employed by the street.com. And all of his personal investments are in his hedge fund. If he buys a stock in that fund, he has to hold it one month and cannot buy or sell a stock within 5 days of mentioning it on a broadcast. That doesn't make what you say impossible by any means, but I don't believe that type of thing is going on. He's visible enough that such a scheme would be very risky. I just question the quality of advice I've heard him give.

[txex86]

Jim Cramer can be aptly described in two words--overly emotional. When a financial advisor acts in the way that he does, I question why he picks the stocks he pushes in the first place. Did he perform due diligence, or was it completely from the gut?

[pennrj430]

There is a contest of sorts going on hosted by Paul Douglas Boyer, a host of Mad Money Machine podcast. He and his listeners are using fake money as a game to trak Jim Cramers pics. I think when Jim Cramer says to buy something, listeners can email Paul about buying shares with the fake money, and sell it, and so on, based on Cramers advice... I think the games works something like that.
He compares the results they get to Index fund Benchmarks. Because of the cost of buying and selling, and capital gains, and everything else, they almost always would have been better off buying and holding low cost Index funds. Only a few Cramer picks once in a while beat the Benchmarks, some by a huge amount, but they are never consistant.
I'm not sure if this helps you, I just wanted to share it.

[Broken Arrow]

Thank you pennrj430. That really is interesting, though the results are not at all surprising.

I find him entertaining though, and regardless of whether I agree or disagree with him, I think the real value of the show lies not in what stock he picks, but in his reasoning as to how and why he picks it.

[disneysteve]

I have no idea if he gives good advice or not as I simply can't stand to listen to him. I doubt I have ever heard him speak for more than 30 seconds at one time.

[JimInOK]

There is a contest of sorts going on hosted by Paul Douglas Boyer, a host of Mad Money Machine podcast. He and his listeners are using fake money as a game to trak Jim Cramers pics. I think when Jim Cramer says to buy something, listeners can email Paul about buying shares with the fake money, and sell it, and so on, based on Cramers advice... I think the games works something like that.
He compares the results they get to Index fund Benchmarks. Because of the cost of buying and selling, and capital gains, and everything else, they almost always would have been better off buying and holding low cost Index funds. Only a few Cramer picks once in a while beat the Benchmarks, some by a huge amount, but they are never consistant.
I'm not sure if this helps you, I just wanted to share it.

I agree with Broken Arrow. Not surprising at all. Thanks for the post, I wasn't aware of this info.

[Joan.of.the.Arch]

I have no idea if he gives good advice or not as I simply can't stand to listen to him. I doubt I have ever heard him speak for more than 30 seconds at one time.

This gave me a little laugh, as I also do not like to listen to him. I can listen for a lot more than 30 seconds though

Oddly, we have a local radio guy who is about the opposite in personality, but I can't stand to listen to him either. He is all gooey-sweet, as soft spoken as a preschool teacher, speaks so soothingly slowly, and couches everything he says in soft clouds of cashmere. He takes forever to complete a thought and I can't imagine him ever being sarcastic.

Anyway, I have not paid enough attention to Kramer (Cramer?) to understand his M.O.

[pennrj430]

For anyonw who is still interested in this post, I found this today on MSN... Jim Cramer's bad bets - MSN Money

[poundwise]

I think Cramer is a buffoon.

Did you see that clip in the article linked to in the previous post? Is this who you want to take financial advice from? I'd hate to see this guy at a little league game.

[asmom]

Oddly, we have a local radio guy who is about the opposite in personality, but I can't stand to listen to him either. He is all gooey-sweet, as soft spoken as a preschool teacher, speaks so soothingly slowly, and couches everything he says in soft clouds of cashmere. He takes forever to complete a thought and I can't imagine him ever being sarcastic.

Oh wow, this is too funny! I've heard a few hosts like that.....