does cramer make the stock market move?

[Shanemex]

I actually like Cramer's show, and credit it for getting me interested in the stock market. It's probably just a coincidence that I started to get more involved at a really good time (last September), but I still based pretty much all of my stock picks on his advice. Now granted, this were pretty big-cap companies, so anyone could have recommended them.

I still have AAPL (bought at 73), GOOG (Bought at 396), GS (bought at 162), and SHLD (bought at 151). I also had a fifth stock slot that I've changed a few times which had 2 around 7% losses, one quick 10% gain, and one that is still unchanged. Overall I may not be much better off than the market average, but I am still quite happy that Cramer made the market interesting enough to try and buy individual stocks instead of mutual funds.

I'm also very suspicious of the accuracy for those Cramer tracking sites. I happened to take a look at some of the lowest stocks on the complete best to worst list at yourmoneywatch and found these five stocks:
FMX Buy: 91.32 Cur: 39.84 Gain%: -56.37, split 3:1, so actually up 31%
Volv Buy: 44.06 Cur: 21.03 Gain%: -52.27, split 5:1, so actually up 139%
NKE Buy: 95.23 Cur 56.75 Gain: -40.41, split 2:1, so actually up 19%
TRMB Buy: 41.95 Cir: 29.19 Gain%: -34.97, split 2:1, so actually up 39%
HITK Buy: 29.60 Cur: 11.80 Gain: -60.14, split 3:2, so down only 40%

There are probably several other examples, some even much higher up the list, of stock splits that were not taken into account. Because of this, and the fact they don't update to close the position when Cramer recommends a sell, I don't think you can really judge him based on those results alone.

[APXG]

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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.

[DcifrThs]

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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.

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good points, but they are all covered in the post you quoted & the subsequent one i made about profiting from cramer.

1) no strength signal
2) no sell included
3) possible to make money from recommendations by studying what effect they have on the mkt. hard to do, just like any trading strategy.

Barron

[yourmoneywatch]

Yourmoneywatch.com does record the performance of stocks that are sold. If Cramer re-recommends the stock, it is considered a new recommendation & is counted in the performance numbers (all prior trades/comments are shown under the ticker for reference - use Search by Symbol to see them). The scoreboards include only new recommedations & not reiterations. However, on our new "Major Buy Reiterations" page we calculate the performance of the reits since the date of the reit to present.

The "Gain/Loss After 1st Day Traded" is the average gain/loss from all stock recommendations from their closing price the day before the recommendation to the close on the next trading day. It is an attempt to see the possible Cramer Effect" on these stocks. The "next day close" can also be seen in the archived comments/performance for each recommendation.

If you have any other questions, please use the "Feedback" link on the site.

Editor,
yourmoneywatch.com

[fearme]

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Cramer will sometimes hype a complete turd. This is a beauty short if you can research it quickly enough and smoke it out. He often does little or no research on his pumps. Or sometimes he knows he's hyping crap, but he's got friends that are stuck, and he tries to bail them out. Cramerplays can be profitable if you are quick.


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is this for real?

[Shanemex]

I seriously doubt it. He had a great record in his hedge fund, so he obviously knows how to pick stocks. He also must have made a fair amount of money through it, so I doubt he would risk throwing it all away if he got caught pumping and dumping stocks for friends. Obviously some of his picks can be very wrong, and apparently his track record since starting the show is not very good, but I don't think he is acting unethically.