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View Full Version : Jim Cramer's Advice Slightly Worse Than A Coin Toss?


jason
12-24-2008, 07:49 AM
http://consumerist.com/5116676/jim-cramers-advice-slightly-worse-than-a-coin-toss?skyline=true&s=x

In a not-so-shocking analysis of one of the most-watched TV investment advisers, author Eric Tyson argues that Jim Cramer's actual stock-picking performance doesn't match the strength of his bellowing. Besides his show Mad Money, Cramer is all over CNBC dispensing investment advice left and right. He's got to be out-performing other investment advisers and especially the market, right? Not really.

Tyson points out that Cramer's past hedge fund results (the basis for his claim of investment success) have never been audited or independently verified. Then Tyson starts his assault on Cramer's more-trackable public stock recommendations with the following:

CXO found that Cramer's stock market predictions (monitored from 2000 onward) were worse than average and even worse than simply flipping a coin. Cramer's prognostications fared better than the market averages only 47 percent of the time. Regarding Cramer's predictions, CXO comments that, "His predictions sometimes swing dramatically from optimistic to pessimistic, and back again, over short periods. It is difficult to infer his guiding valuation theory, if he has one. We wonder whether he tends to be swayed by the arguments of forceful advocates with whom he most recently interacted...He seems more a stream of uncalibrated opinion than a stock market maven."

Finally, Tyson includes a link to a video where Cramer, "boldly proclaimed that the stock market lows hit in mid-July marked the end of the stock market's downturn!" We all know what's happened to the market since then — July was certainly not anywhere near the low point.

As with any advice, Tyson says it's "buyer beware" when listening to financial advisers who claim to have superior knowledge but no real proof of success. Media outlets build up investment "experts" (or "personalities" if you prefer) to generate ratings, period. If the advisers can do that, they're a success for TV. But that in no way means their advice will prove success for the viewer that applies it. Think about it this way, do you really want to take investment advice from an actor?

Ross
12-24-2008, 08:50 AM
Yes it is about time somebody kicked the stuffing out of Cramer.

What troubles me is the mentality of the media moguls who employ Cramer.
Clearly they are more interested in a 'Performance' than the welfare of their
listeners .

Sysiphus
12-24-2008, 02:39 PM
Yes it is about time somebody kicked the stuffing out of Cramer.

It's about time someone sued the stuffing out of him.

frodo
12-24-2008, 03:18 PM
Cramer is about "Theatre", as is Fox News. It's a content free zone.

Fiddlerdave
12-26-2008, 02:13 PM
Yes it is about time somebody kicked the stuffing out of Cramer.

What troubles me is the mentality of the media moguls who employ Cramer.
Clearly they are more interested in a 'Performance' than the welfare of their
listeners .:lol: To be a media mogul, the FIRST requirement is that you have no interest in the welfare of your listeners.

penguinzee
12-26-2008, 11:45 PM
I know people who use Cramer as a contrary indicator...:rimshot: :rofl: whenever he says "Buy! Buy! Buy!" my friends often "Sell! Sell! Sell!"... I think they also made some coin on the deals...:yes:

Franc (penguinzee)

DReynolds
12-27-2008, 12:10 AM
What troubles me is the mentality of the media moguls who employ Cramer.
Clearly they are more interested in a 'Performance' than the welfare of their
listeners .
Cramer works for the same network that employs Maria Bartiromo, a sultry moron who is employed because of her physical attributes. For the same money they pay the pretty but daft and incoherent Bartiromo, they could hire a knowledgable and experienced Economics professor from a top school. But they don't. They'd rather have bafoons and hot chicks.

CNBC is no more reliable for financial advice than a used dealer is for car advice. Never forget that, and you'll do better than the average schmuck who listened to the irrational exuberance of the talking head for the last 18 years and who is now listening to irrational pessimism.

BirdGuano
12-27-2008, 03:13 AM
Hey now..... the "money honey's" are easy on the eyes, but if you rely on them (or Cramer) for financial advice you are an idiot.

They're still nice to look at with the sound muted. :D

Cramer is not.

Fattail
12-29-2008, 03:39 PM
Cramer works for the same network that employs Maria Bartiromo, a sultry moron who is employed because of her physical attributes. For the same money they pay the pretty but daft and incoherent Bartiromo, they could hire a knowledgable and experienced Economics professor from a top school. But they don't. They'd rather have bafoons and hot chicks.

CNBC is no more reliable for financial advice than a used dealer is for car advice. Never forget that, and you'll do better than the average schmuck who listened to the irrational exuberance of the talking head for the last 18 years and who is now listening to irrational pessimism.

First of all Bartiromo is not the hottest chick on cnbc, nor is she a bufoon. I would say the hottest hotty on CNBC is Erin Burnett.

Second, you can have 47% winners and make a ton of money, it depends on the amount of money you risk into each trade.

Thirdly, I would also like to say that investment advice from a Economics professor is hardly going to be any better than the TV hotty since the professor is a civil servant and not an actual trader, and thus has none of his own skin in the game.

I sat next to one of those economic's professors on a panel on a local TV program. He was as knowledgeable as anyone else on the panel and expressed his points better. ( no doubt due to his teaching experience.) I talked to him afterwards about trading and the markets and come to find out he owned ONE stock outside his 401k. It was Arch Coal and at the time it had gone down a ton of course, and he was complaining about that. I asked him if he ever used options when he made a trade. He said, "No", and intonated that it was just simpler to buy the stock. Here was guy with as much knowledge and capability to be in the market, and he owned one stock.


Investment advice on TV is worth exactly what you pay for it. My question is always," if your advice is so good, why aren't you rich." There is no magic algorithim or computer program that will magically print money for you. If there was, you wouldn't have enough money to buy it. You beat the market by doing your own work, and that is the only way IMO.

Ross
12-29-2008, 08:31 PM
Erin Burnett
http://www.dealbreaker.com/images/entries/Erin%20Burnett.bmp


Maria Bartiromo
http://www.gonomad.com/readuponit/uploaded_images/maria-790037.jpg

Fattail .... they both look ok to me but from that photo Erin Burnett does have
an edge . I however totally agree with ...
You beat the market by doing your own work, and that is the only way IMO.

BirdGuano
12-29-2008, 08:53 PM
The CNBC International Money Honeys are MUCH better, but any of them beat this a$%clown:

http://mike.blogs.com/photos/uncategorized/madmoney.jpg