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http://yourmoneywatch.com/index.php?...ory&year=0
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well obviously nothing is conclusive because of the way the study was done...
...BUT, it is pretty clear that if you don't get a strength signal from him (i.e. you simply buy X# of shares of a stock when he tells you to) then you might as well just put your money in an index fund.
he loses the diversification argument too since he had more stock recommendations than any of the indices have members (save Russell, which has like >4000 IIRC).
one thing i don't know is if he comes back and says to sell a stock he previously said buy, is that included in the yourmoneywatch.com stats? if not, that is pretty significant, if it does, then his record is pretty crappy. one, provable but hard to get at, argument against this is that the #s do not include "buy re-iterations." so a simple strategy of doubling your # of shares in a stock he reiterates might have made up the difference in performance. i highly doubt it but it's worth a shot from his backers' point of view.
his overall value added was (non weighted on average vs. all indices) -14.3275%. so listening to cramer instead of ivnesting an equal amt in each of the indices netted you about a 14% loss since 7/28/2005.
pretty VERY crappy!
Barron
PS- there is one line item i don't understand:
"(Gain/Loss after 1st day traded: 2.37%)" ... i don't know if that means on 7/29/2005 he made 2.37% or if the average gain immediately after he recommends a stock is 2.37% and then goes down or what? i dunno. doesn't really matter in terms of the above discussion.
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Do those websites differentiate between the emphasis of his recommendations? The 2 or 3 stocks he starts the show off and features for 10-15 mins are very different from the 30 stocks in 2-3 mins lightning crap. He also sets no targets and horizons for the latter but simply buy/sell - so analyzing this via overall return by a certain date is obviously retarded.
Imagine going to one of the poker strategy forums and answering 30 posts in 3 mins and then your performance there being bunched together for evaluation with the serious posts you make in those forums.
And in general, there are definitely ways to make money off the impact of the recommendations(rather than recommendations themselves), but they are close to complexity as other strategies that make money and require similar levels of understanding.