http://www.marketwatch.com/story/jim-cramer-loses-big-in-this-stock-picking-test-2015-10-22 An interesting story that suggests the idea of buying stocks on an expert's list is often a losing move. Whereas some traders may be nimble enough to catch a short term move, I am not a such a person. I am no lemming either. Rather, if something Cramer says seems interesting, I'll put it on a watch list for 1-3 months besides doing my own due diligence. Have fun. YMMV.
Well Cramer first and foremost is a showman. He may have some valid points in terms of the stocks he likes, but consider the source. I think a proven track record would make him more interesting to investors. I think that he should get rid of some of the bells and whistles and consider just presenting good information.
I have made decent change following some of his suggestions. But, as I said, the recommendations first go on a watchlist for a while. Admittedly Cramer is a bit frenetic and isn't for everyone. BTW, his web page sound board noises make for some interesting ring tones. I use different ring tones (for different investor friends) including some from old time radio shows so I know who calling. For example, Green Hornet = lawyer, The Shadow = accountant, Tom Corbett, Space Cadet = a particular relative.
Cramer... I've got a bad feeling about the guy. Apparently he has a good track record but once again I go back to my old way of seeing things. If I was truly able to, for the majority of the time, to pick the right stocks, pick the market trends etc. If I was succesfull over 50% of the time. Would I be a) working for a bank b) talking daily on a tv show c) sipping ice cold beer on a perfectly white beach on some mediterranean/caribbian island surrounded my great looking female models... I always come to the same conclusion that it would be C and that means that none of these guys are as succesfull as they claim to be. So Cramer does what he wants, I do what I want. I do take a look at what he says once in a while but it's always just to see what he thinks, never to make investments based on his opinion alone.
The worst thing to do with a guy like Cramer is to sit and write down everything he says and go act on it the next morning. I've gotten a few good ideas from him over the years by doing my own research on things he's talked about that I wasn't aware of, but his job is largely to entertain and answer very vague questions from individuals who he doesn't know anything about. "Buy!"... "Sell!"... "Don't Buy!"... investing is not a "one size fits all" endeavor. Individual differences such as timeframes, risk tolerances, liquidity needs, etc need to be considered. He's written several books with some good general info, and he was also a pretty good money manager during a time when the markets were in a big upswing. But we should judge a money manager moreso by how they do when markets get ugly IMO. And the saying "anyone can make money in a bull market!" should always be kept in mind. And bull markets don't last forever... Read his books, be entertained by his show, perhaps check out any things he mentions that you were previously unaware of, and make any decisions based upon your own research.
Want to know how good is Cramer? Go back before the crash in 2008 and see if he predicted it. iF he didn't, he's just another Wall Street Shill like Blogget. Remember Blogget, he's the shill pushing stocks to the public while in private saying how they were a dog. When it came out, he was taken off the air. Now, they have put him back on as an expert. Sandy
Not many people saw the crash coming... and most of those who "predicted" it were the people who throw out those "predictions" every year so they can claim "I knew it" when the inevitable crash does happen.
Yeah, it's not really about "predicting crashes". Very few people will get any given prediction right, and those who do get any one macro turn right were probably wrong on their prior 5-10 predictions, and also wrong on their next 5-10... It's pretty much a given that almost everybody will lose some $ during a time like Q4 '07 through Q1 '09. What impresses me is the guy or gal who lost significantly less than the overall markets during that time, and who has otherwise made more than the markets overall over a decade or 2 or more. With the exception of Jim Simons' Medallion Fund and one other hedge fund whose name escapes me, everybody else I've come across lost at least a little during the crisis. And Medallion had brief periods of time like the first 2 weeks of August '07 when they lost big when just about everyone else was still making big money long. John Paulson made a killing shorting subprime mortgages in '07, but prior to that his performance as a hedge fund manager had been mediocre, and he later lost big making big bets on gold and other investments after the crash. Nobody never loses money. Nobody beats the market EVERY year. The guy who makes money the one year when everybody else loses money probably lost money or made very little money the year before - when everybody else was big making money... and probably did the same the year after everybody lost big then rebounded the following year.
I have always felt Cramer and TV/Radio personalities like him were not actually very good investors, but really great showpeople. I mean if Jimmy was that savvy, he would just invest and make his money. I bet the bulk of his income is from his show and other endorsements. I consider them performers first and investors second.
Cramer had a really good run as a fund manager back in the mid 90s, and that is what made him famous. For about 5 years, he was on fire. But here is the thing, that could have been mostly luck, or it could have been that his techniques worked well for a single moment in time and he just happened to get enough fame to cash in on it with the TV show. It could very much be like a guy who picks the entire NCAA basketball bracket correct one year, and then does average every other year. The other thing to remember with anyone famous who is giving stock advice, they are creating their own success. If Cramer says to buy a stock at $50 on his show, just the people who watch the show may cause enough volume to move the stock 5% in the next month. It isn´t that the stock is good, it is that he is putting buy pressure on it. I actually like Cramer, because while he is crazy with his antics, his actual reasons for liking stocks are usually sound valuation plays. I do think it is a mistake to wait a few weeks to buy his picks though, because more than likely you are going to pay the ´Cramer premium´ because there was probably a bump in the price the day after he mentioned it.
