Jim Cramer: A Stream of Uncalibrated Opinion

I have faith that the average reader of this blog is discerning enough to know where not to gather thine financial advice.

The ilk that is The Motley, Suze, and Jim Cramer is categorized by many financial advisers as “Financial Pornography.”

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.

Cramer’s picks, after being held accountable for trading fees, have performed worse than the broad market averages. His overall average with simply picking stocks that go up is pretty dismal. The most recent tally shows that out of more than 1500 stock recommendations, more than half have gone down!

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.

…but he stayed at a Holiday Inn Express.

If only double-digit ratings translated to double-digit returns for viewers.

In times like this, in times not like this, and all the times in between, the strategies that work for investors are not sexy, not even exciting, rarely worth raising one’s voice over, and are so very, very rarely dispensed by entertainers.

1 thought on “Jim Cramer: A Stream of Uncalibrated Opinion

  1. How smart are those involved in “high finance?” Bogle got a lousy grade on his thesis presenting the idea of index funds, which was derided as “un-American.”

    Off topic, consider this “how farked are we” factoid:

    The S&P is down 40% this year — which makes the US market the best performing major market in the world.

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