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Cramer [sigh]
Old 12-15-2010, 10:13 PM   #1
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Cramer [sigh]

He was in rare form tonight. He put up the ten best performing stocks of the last decade, including two (Apple & Priceline) that were up more than 4,000%.

Then he went on to mock, "No! I'd rather put my money in a brainless index fund and lose money, just because some professor said it was a good idea."

I'm telling you this guy is dooming a whole generation of investors. Given his large audience, I honestly think he may be doing more to threaten Americans' retirements than anything the government or the market is doing.
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Old 12-15-2010, 11:35 PM   #2
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If you had the stock tables from 2021 then you could win Cramers way (of course you could do a lot of things if you had them) Yes there are winners, but of course there are also loosers as well, and of course he does not talk about them.
Indexing is for those who think just staying even with the market is the best that can be done long term, which it seems that statistics bear out.
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Old 12-16-2010, 12:27 AM   #3
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i think you're correct. imo cramer is an idiot and i wouldn't watch his show if you paid me, literally. as far as following any of his "advice" all i can say is a loud BOO YAH. what a fool. i'm amazed cnbc airs his show, he must be paying them!
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Old 12-16-2010, 05:30 AM   #4
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Cramer is simply talk radio amped up to TV . . . providing an over-the-top visually entertaining show aimed at stirring emotions and increasing viewership. His product is entertainment with a double dose of ego. He reminds me of a car salesman turned charismatic TV preacher. If you have never seen Jon Stewart's dismantling of Cramer on The Daily Show on youtube, it is very entertaining. The emperor has no clothes.
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Old 12-16-2010, 07:11 PM   #5
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Easy to cherry pick looking backwards.

I wonder what his record is the last 2 or 3 years
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Old 12-16-2010, 07:26 PM   #6
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With that logic, only a fool wouldn't play the lottery.
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Old 12-16-2010, 08:02 PM   #7
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With that logic, only a fool wouldn't play the lottery.
Darn right. Just by playing 10, 11, 18, 32, 45, Powerball: 18, and Power Play: 5 yesterday, I could have been 20 million dollars richer. But no! I'd rather put my money in a brainless index fund and lose money, just because some professor said it was a good idea.
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Old 12-16-2010, 08:11 PM   #8
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I wonder what his record is the last 2 or 3 years
Last year an article in Barrons calculated the performance of all his buy and sell recommendations on the show to date. The resulting return lagged the S&P by about 5%/yr, as I recall.

I know Cramer claims he averaged about 24%/yr compounded while running his hedge fund. But would anyone with those kinds of returns give up managing money?

Having said all that, I have to admit he's an entertaining, charismatic host. I also think he's a very bright (high IQ) person, and I enjoy trying to keep up with the rapid-fire stream of literary, historical, and economic allusions that come out of his mouth. I just have to tie myself the mast before watching.
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Old 12-16-2010, 08:32 PM   #9
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Unfortunately, we don't get his show here, but based on the few times I have seen it while travelling in the US, I was really struck by the difference between his performance on the show and what he advocates in his books (of which I will confess to reading one):

1. most people are better off with low cost index funds

2. even for those who want to trade individual stocks, you should limit yourself to the number of stocks you can properly reseach and monitor. He suggests at least an hour per week per stock ("buy and homework"). In practice this means most people who are not doing it full time will have very few stocks and the rest of their money in low cost index funds

3. the rest of the book was devoted to researching, selecting and trading individual stocks. As far as a book on trading/investing in individual stocks is concerned, I rate it as average - neither terrible nor great (IMHO).

It's pretty hard to quibble with points #1 and #2.

As to the track record of his calls, I've seen (but not investigated) comments which say that he beat the market pre-crisis but lagged the market during and after the crisis (for whatever that's worth). Possibly his calls are weighted to "high beta" stocks, but I'm not sufficiently interested to investigate further. His call on Lehman was pretty bad.

I also don't understand why he quit managing his hedge fund given the retruns he was generating. He's clearly a very bright guy with a massive amount of energy who enjoys doing what he's doing. I just think he's doing himself something of a disservice with his show.
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Old 12-17-2010, 08:16 AM   #10
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Hey, Cramer is correct 47% of time: Guru Grades - CXO Advisory
That's almost good as a coin toss! :-)
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Old 12-17-2010, 11:01 AM   #11
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Percentage of right/wrong doesn't matter. What matters is the overall gains & losses.

Correct 47% of the time with 20% gain is better than correct 90% of the time with 1% gain. (Or correct 90% of the time with a net 5% loss. As in Covered Calls.)

FWIW, Cramer has made me a whole lot more money than his bad calls have cost me. Trick is, use his recommendations as a starting point for investigation and not as a buy order to your broker. Which, oddly enough, is just what he tells people to do. "Do your homework"
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Old 12-23-2010, 08:07 PM   #12
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I watch Jim Cramer every day. Very passionate, charismatic, funny, intellegent. I enjoy him immensely.

You gots to understand, index funds are BORING. Boring does not sell on TV.

I do not agree with Jim Cramer's assessment of index funds. I also think it is very unfair to choose 10 great stocks of the decade and conveniently forget about the 50 stocks that "looked good at the time", but were losers over the long run.

Nevertheless, I have learned a lot from his show. I ignore all of his advice that does not make sense to me, but the stuff I have acted on has been very profitable for me.

I also might add that statistically, you can be wrong 60% of the time and still be GREAT. Cramer seems to cut his losses quickly on the "wrongs" and let the "rights" run. The dollars you make when Cramer is right far exceeds the dollars you lose when he is wrong (i.e. apple). No one can be right all the time and Jim doesn't claim to be. I give him his "due" however because he is one of the few who stands up each day and gives specific opinions. He doesn't sit on the sidelines (like others) and say "It probably will go up, but watch out if it goes down", I hate those guys.
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Old 12-23-2010, 08:13 PM   #13
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Old 12-23-2010, 08:22 PM   #14
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I give him his "due" however because he is one of the few who stands up each day and gives specific opinions. He doesn't sit on the sidelines (like others) and say "It probably will go up, but watch out if it goes down", I hate those guys.
The last time I watched him was just before the last crash. He was touting 5 stocks that were at a 52 week high but his reason for pushing them was because stocks like those simply go higher in markets like that. A couple of weeks later he was yelling......'I told you to get out'. Right.

I never have bought a stock on his recommendation and don't see any reason to watch it.
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Old 12-23-2010, 08:35 PM   #15
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I do watch Cramer now and then, but usually only for his opening segment to get his "take" on what went on on a given day. I take him with a "grain of salt" always and since I've seen him be right and wrong, I view his opinions as just another data point to add to other information.

A couple things I find especially annoying is that he can be equally passionate about a stock both positively and negatively. I've seen it go both ways. He can say "buy, buy, buy" about a particular stock and then when it doesn't go well, it's "sell, sell, sell." The flip-side is true too, so if you listen to him too much, it can be confusing.

I also see it as very unhelpful for him to "own it" when one of his recommendations goes sour. He can "own it" all he wants, but if some poor sap follows him blindly, it could be very expensive.
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Old 12-23-2010, 08:46 PM   #16
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I do not watch much TV, leave alone Cramer show for the stock touts. But whenever I watched him describing some stocks or talking to the CEOs, I got more interested in learning about the different industries that those companies were in. There are several thousand companies in the US doing so many different things, and I always learn something new. However, I have not followed any of his recommendations to know if I would make or lose money.
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Old 12-23-2010, 11:31 PM   #17
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Originally Posted by albundyz View Post
I watch Jim Cramer every day. Very passionate, charismatic, funny, intellegent. I enjoy him immensely.

You gots to understand, index funds are BORING. Boring does not sell on TV.

I do not agree with Jim Cramer's assessment of index funds. I also think it is very unfair to choose 10 great stocks of the decade and conveniently forget about the 50 stocks that "looked good at the time", but were losers over the long run.

Nevertheless, I have learned a lot from his show. I ignore all of his advice that does not make sense to me, but the stuff I have acted on has been very profitable for me.

I also might add that statistically, you can be wrong 60% of the time and still be GREAT. Cramer seems to cut his losses quickly on the "wrongs" and let the "rights" run. The dollars you make when Cramer is right far exceeds the dollars you lose when he is wrong (i.e. apple). No one can be right all the time and Jim doesn't claim to be. I give him his "due" however because he is one of the few who stands up each day and gives specific opinions. He doesn't sit on the sidelines (like others) and say "It probably will go up, but watch out if it goes down", I hate those guys.
I know it is popular to bash Cramer, but I also like the guy and more importantly find him very educational. I don't buy or sell cause Cramer says to do, but my ears perk up when he mentioned one of my holdings or a stock I have been watching. I typically only watch him a couple of times a week, so I don't even keep track of his recommendations.

If you listen carefully and don't get turned off by all of the crazy stunts he actually provides a very good educational primer on how to do fundamental analysis on stocks. One of the things I've learned from him is that technical analysis matters. Now I don't how to do it TA and don't really believe in using it as a system. But when the fundamental analysis say to buy, but the chart say the stock is going down, I throw the stock into the too hard category and find something else to invest in.
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Old 12-23-2010, 11:41 PM   #18
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Originally Posted by Onward View Post
Last year an article in Barrons calculated the performance of all his buy and sell recommendations on the show to date. The resulting return lagged the S&P by about 5%/yr, as I recall.

I know Cramer claims he averaged about 24%/yr compounded while running his hedge fund. But would anyone with those kinds of returns give up managing money?
I'm sure he was, when you take fees and commissions into account. The question is, what were his investor's returns?
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Old 12-24-2010, 01:48 AM   #19
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IMO he's an intelligent, entertaining guy dispensing investment porn.
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Old 12-24-2010, 05:18 AM   #20
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My wife's brother has POA and is trustee of their mother's estate. Their mother has no concept of investing and has always been very conservative with her money.
During the last year he has bought and sold stocks from the trust. He has always been one of those folks who likes the get rich quick schemes and I'm sure that Cramer is his source of investment information. Although he thinks he knows it all he has no experience with investing. My wife and I wish there was a way to stop him. We went through this same thing with my brother with bad results.
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