does cramer make the stock market move?

[catalyst]

http://yourmoneywatch.com/index.php?...ory&year=0

[Perplexity]

also www.cramerwatch.org

[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.

[prohornblower]

Cramer is like the Hellmuth of the Stock Market, so, I don't think he has much impact at all whatsoever. He's mostly there for entertainment value, for people who've burned out their Boiler Room DVD.

[Sniper]

You can make money off of Cramer, short term, if you are nimble and follow his other products where he talks about the stuff he is going to talk about on his show first [img]/images/graemlins/wink.gif[/img]

This type of trading though is not for someone who is not spending quite a bit of time doing their own research, specifically into how the market reacts to things he says on the show.

For the average individual stock investor, you can learn some things from the themes he talks about though.

[kimchi]

Cramer is like most other tipsters. He gives people what they want and not what they need. He makes his show all energy and excitement, which is bad news if you're trying to make rational investment/trading decisions.

Giving a buy tip is only about 10% of what you need to consider before you buy a stock - but it's the one 10% that most people are interested.

You can't make money consistently by only considering 10% of a strategy.

[slush fund]

i know for a fact it did with this stock

http://finance.google.com/finance?q=praa

it was about two or three months ago. i just know because i am in this business and my partner told me that kramer recommended the stock the night before. sure enough, it opened two points higher the next day. the whole sector has been on a tear since then

[Shanemex]

I don't watch his show very often, but I did today and he mentioned 3 small cap stocks: CCIX (up 5.8% after hours), FCSX (up 3.3%), and GLDD (up 16.3%). I don't really see any other reason besides cramer's recommendation for the moves, but I don't know how much of those gains will still be there by close tomorrow.

[DcifrThs]

[ QUOTE ]
You can make money off of Cramer, short term, if you are nimble and follow his other products where he talks about the stuff he is going to talk about on his show first [img]/images/graemlins/wink.gif[/img]

This type of trading though is not for someone who is not spending quite a bit of time doing their own research, specifically into how the market reacts to things he says on the show.

For the average individual stock investor, you can learn some things from the themes he talks about though.


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not having done my own research, i'd have to guess one way would be to short his recommendations after they jump. since you can't tell which ones will jump, buying all i think is a mistake given the record.

instead, watch which recommendations move and short the biggest movers since that is likely an overreaction to his statements (obviously with the proviso that you know what would cause the stock to move higher and have a good understanding of each one's fundamentals).

making money like this is never easy, but seems like that is the approach i'd want to research and go for.

Barron

[pig4bill]

[ QUOTE ]
Cramer is like most other tipsters. He gives people what they want and not what they need. He makes his show all energy and excitement, which is bad news if you're trying to make rational investment/trading decisions.

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Absolutely. Cramer often makes stocks move. Sometimes the wrong way. [img]/images/graemlins/smile.gif[/img]

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Giving a buy tip is only about 10% of what you need to consider before you buy a stock - but it's the one 10% that most people are interested.

You can't make money consistently by only considering 10% of a strategy.

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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.

Be aware that Cramer has a radio show during trading hours. Sometimes people will pile into something on his pump during a radio show. Then when he mentions the same stock on tv after-hours, the morning buyers dump into the tv buyers. That's why you'll sometimes see huge volume but the stock doesn't go anywhere.