Jim Cramer's 2-Year Return Fails to Beat S&P

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I know there are already too many threads on Cramer in BF&I, but I guess one more can't hurt. In Barron's this week, there was an article talking about his track record over the past two years. Here are some of the main points:

1. Over the past two years, viewers holding Cramer's stocks would be up 12% while the Dow rose 22% and the S&P 500 16%.

2. Over the past six months, his Mad Money picks (3,458 in total) were flat compared to the market, EXCLUDING commissions.

3. When shown to CNBC, they made a lot of excuses, such as what stocks to consider as his picks and when to buy them. CNBC analyzed his picks under these commissions and said that if held for one month, they beat the S&P by 0.8%. CNBC did its analysis incorrectly, however, and the stocks beat the S&P by 0.4% in one month. The stocks fell short of the S&P 2.2% through last week.

4. On average, the stocks jumped 2% the day after he mentioned the and over the following month moved sideways or down.

I don’t think any of these points come as a huge surprise. He’s giving out too many recommendations from a long-term, value standpoint. Traders will definitely be able to take advantage of his picks (especially shorting them in subsequent months), but obviously the majority of his 100K daily viewers aren’t traders. Even though CNBC says the show is mostly for educational purposes, in actuality this is far from true – most viewers tune in not to learn, but to make money.