Jim Cramer: You Have To Be ‘Mad’ To Trust Him With Your Money

December 24, 2008

US (ChattahBox) – Anyone who has ever ventured into the world of business television, or even just the stock exchange, probably knows about Jim Cramer. Believing that there is always a bull market somewhere, he spends his mornings shouting advice (and often cliché market jargon) at various CNBC viewers and other presenters.   It’s a good shtick but is it on the money or all show?

Some people think that his aggressive approach to marketing tips is a show of his confidence, ability, and track record. Unfortunately, those people would be very wrong, and there are plenty of statistics to prove it.

The former hedge fund manager, and best-selling author, is the host of CNBC’s Mad Money, and co-founder of TheStreet.com. Despite the credentials he is apparently not a stock genius and there’s more bull than market in his predictions. In fact, he is rarely even right, and his ratio for good vs bad financial advice speaks for itself. According to http://yourmoneywatch.com/, a website that has been tracking his recommendations since 2005, he has made 207 total recommendations in 2008; 46 have managed to be correct, 160 have been proven wrong, and 1 is unknown, giving Cramer a final portfolio performance percentage of -26.48% ! And for those of you who think it’s unfair to judge his performance based on a year of economic decline, I am afraid that his other annual recommendations didn’t fare much better.

Several sources have commented on these ratings, but my favorite had to be a quote by CXO Advisory:

“His predictions sometimes swing dramatically from optimistic to pessimistic, and back again, over short periods. It is difficult to infer his guiding valuation theory, if he has one. We wonder whether he tends to be swayed by the arguments of forceful advocates with whom he most recently interacted…He seems more a stream of uncalibrated opinion than a stock market maven.”

We couldn’t agree more.


One Response to “Jim Cramer: You Have To Be ‘Mad’ To Trust Him With Your Money”

  1. Frederick on December 28th, 2008 12:36 pm

    Agree completely. The man is nothing but a blowhard egomaniac who loves to hear himself speak. Unfortunately the man has almost certainly caused financial misery for the people who are duped into acting on his advice. That website you mentioned that tracks his picks and performance is great. The best parts are the comments attached to the price and date of the mention. Make sure to click on “see all calls for this stock” to see how hilariously awful he has been on most stuff. He is wildly emotional at tops, egging people on with fantastic predictions for the indices and individual picks, and he capitulates after some stocks have taken 80-99% beatings after he chose them. He has no sell discipline whatsoever. From a regulatory and suitability(know your customer) angle, this show should not be allowed to exist. Just turn him off, people.

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