Jim Cramer's nephew gives awful advice too

[DcifrThs]

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Let me be clear, I wasn't accusing him of profiteering from his show, he's clearly doing it for fun. The accusations of "pump and dump" activities occurred during the bubble when he was an active hedge fund manager often interviewed on CNBC. One of his employees wrote a tell all book about it, not sure how credible the accusations ended up being.

And I doubt he was one of the best fund managers. I think he had a very good record, beating the market by 5-10% a year. But there are guys out there beating the market by 30% per year for long periods (Joel Greenblatt 20 years 40% per year or Jim Simons).

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24% a year for 12 years after fees would rank him as one of the best. This isn't quite as good as Jim Simons's 35% a year for 18 years on a larger scale, but that wasn't the contention and the difference isn't quite as large as you make it out to be.

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yes, but 24% relative to what? what is his excess return (i.e. subtracting out his benchmark's return)?

i'm not saying he wasn't a great manager, just that he wasn't one of the best.

Barron

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What's Jim Simons's benchmark? You can claim to use a certain index as a benchmark, but there's absolutely no way to guarantee (even if you knew exactly what the portfolio consisted of at any given moment) that the risk characteristics are similar. Besides you are just arguing semantics at this point - is Roger Clemens one of the best baseball players ever, or is he merely one of the all-time greats?

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Renaissance (from what i udnerstand, i don't know exactly their strategy) is a global macro manager. even if it is a US stock manager, their returns woudl be more impressive by a long shot vs. Cramers.

either way though, you are correct that it is semantics and Cramer was a great manager. i've read stories about his ability to simply KNOW everything on his screens to a baffling level of detail.

i've also read more fun stories about his temper [img]/images/graemlins/smile.gif[/img]

i just think you can't put him inthe league of simons et.al.

it's like comparing doug lidstrom to mark messier imo. (i don't know baseball from sh*t)

Barron

[Kirkrrr]

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What you miss is that active trading of volatile stocks is not equal to buying emerging market index funds.


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...what's your point? In other news, bananas don't taste like oranges and anyone who tells you they do is dead wrong. What exactly are you trying to say?

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Following the article's advice you have a bunch of young financially challenged, inexperienced investors aggressively trying to beat the market. How does this end well for the majority of them?

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It ends well for the majority of them in that they are still at a point in their lives where accumulation of experience and knowledge is a lot more important than paper profits or growing a "nest egg," and the only sure way of doing that is to get out there and fall flat on your face a couple of times. Once they have that experience, their odds of becoming successful investors down the road increase exponentially.

Kirk

[emon87]

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It ends well for the majority of them in that they are still at a point in their lives where accumulation of experience and knowledge is a lot more important than paper profits or growing a "nest egg," and the only sure way of doing that is to get out there and fall flat on your face a couple of times. Once they have that experience, their odds of becoming successful investors down the road increase exponentially.

Kirk

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People like to claim that you have to fail a few times to really be successful or have a chance at being successful. I don't get that at all. Why do you feel that way?

[Kirkrrr]

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People like to claim that you have to fail a few times to really be successful or have a chance at being successful. I don't get that at all. Why do you feel that way?

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Because the people that have tried something and were instantly successful at it - while they do exist - are outliers on the chart of human experience. The vast majority of us have had to try something over and over, and fail over and over, before we learned enough from our mistakes to succeed in the chosen field. More importantly, though, the experience teaches perseverence (sp?) and makes you emotionally tougher for when in the future everything goes against you all at once, as things usually. Having had the experience of trying, failing, and then eventually succeeding in the past gives you the psychological fortitude to withstand the swings when they happen again. On the other hand, someone that just took something up and was instantly successful at it simply wouldn't know how to deal with a bad streak because he hasn't had the experience... yet. I'm sorry if all of this sounds like some psycho-babble but I really do believe it to be true.

Kirk

[bills217]

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For example, I work for a Kellogg business school professor during school. One of the things I do is to make a spreadsheet detailing his trading gains and losses. He basically follows Kramer's advice, and those positions that he has followed his advice have lost him quite a bit of money.

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Ummm...if you're a business prof. at Kellogg, why the [censored] are you following Cramer's picks?

I suddenly feel a lot better about myself.

[emon87]

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For example, I work for a Kellogg business school professor during school. One of the things I do is to make a spreadsheet detailing his trading gains and losses. He basically follows Kramer's advice, and those positions that he has followed his advice have lost him quite a bit of money.

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Ummm...if you're a business prof. at Kellogg, why the [censored] are you following Cramer's picks?

I suddenly feel a lot better about myself.

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He's a Health Industry Management prof. Kellogg has many departments, not all of them related to finance.