Monday, August 13, 2007

Follow-Up Request- Cramer's Record

GUEST BLOG


Hello AllAllan Readers:

Although I am neither a stock trader nor a follower of Jim Cramer’s, I’ve been following this blog thread for some time now and am interested in following up on this topic.

I’ve been told by various individuals, including but not limited to Allan Harris, that Cramer’s portfolio does not consistently outperform the stock market. They indicate that he is as much ahead of the market in any given year as he is behind it.

I checked his website and, since I am not willing to pay for his service, I cannot verify these statements.

I’m certainly aware of his popularity and am interested if this is due ONLY to his personality and NOT to his actual ROE performance. If that is the case, that, in my opinion, would be an outrageous circumstance.

Thus, my questions to the readership are:

1) Can anyone else confirm or deny, on the record, that they have followed this portfolio and that it has underperformed (or at least not consistently outperformed) the stock market index returns?

2) Has anyone seen a counter-documentary on this guy from an outside and objective news source or publication of some substance? If so, could you provide a citation?

3) I’m told that FOX is starting its own all-business cable channel soon to compete with CNBC. Can anyone verify this?

4) If #3 above is true, does anyone have any personal internal contacts at FOX with whom we could correspond? It seems that this would be an interesting story.

5) While his portfolio profits, if any, go to charity, can anyone tell me where the revenue from his website are purported to go? If they go to him or to CNBC that would seem to be a significant conflict of interest. What about revenue from sales of books, or DVDs or other materials? Do such revenues, if any, go to charity as well? This would be materially different from TV advertising revenue which we would assume would go to the cable network itself and should- CNBC needs to get its bills paid. But it would be interesting to know if this secondary revenue stream of books, DVDs, etc. went to Cramer personally or to CNBC instead of to charity.

Again, I am neither a fan of Cramer’s nor do I have any economic interest at all in being one of his detractors, but I am somewhat astonished if this is, in fact, a monumental case of the emperor’s having no clothes.

Indeed, if what I’ve been reading here is even remotely true, the emperor seems to not even to know the way to the tailor.

Thanks for your comments,


Professor John Kercheval

6 comments:

Anonymous said...

Just checkout Cramer's Wiki page

http://en.wikipedia.org/wiki/Jim_Cramer

There was a guy that wrote a book called Trading with the Enemy and other shady stuff he might have done plus I remember during the stock market bubble, he was recommending stocks like crazy and if you listened to him, you'd be one broke sob.


Fox Business Network is launching on October 15 2007

http://www.newscorp.com/news/news_344.html

Allan said...

Professor:

I have been reporting on Cramer's performance for a couple of years now. Search my Blog, using "Cramer." to get to them all. All performance numbers are taken directly from Cramer's web page for his Action Alerts service. So those performance numbers are his own. I take them with a grain of salt, since he never really defines when he buys or sells a stock and at what price.

I am assuming he has a choice of entry/exit prices to pick from and is unlikely to pick prices that make his trade look bad. But since it is possible he is accurately reporting actual fills, lets give him the benefit of the doubt and use them, they're bad enough as is.

A

Anonymous said...

Astonishing.

Makes one call forth:

"How did this individual get so big with all of this folly laid out so plainly for the kingdom to see?"


Leonidas
Southern Greece

Anonymous said...

Hi Leonidas, We here in the US give complete support to eloquent idiots. Often just plain idiot is good enough, being able to enunciate is optional. Look at who we elect and listen to on the radio and TV (more cramers).

curt

Allan said...

curt,

please don't forget angelina jolie, some of our icons are deservedly worshiped.

a

Anonymous said...

Curt:

Politicians are the same here in the former Greek empire as in the US.

I suppose why Cramer is somewhat different than America's Mr. Bush, or Rush Limbaugh or the left wing's Dan Rather, CNN, etc. is that his results are perfectly quantifiable.

Thusly, he cannot really just "shoot off his mouth" because the numerical results are there- laid out for the world to see. He has a much harder time hiding things.

Further, since his online service is PAID you would think people would get angry- you don't have to pay to listen to Rush Limbaugh or politicians talk.

Even those wo don't pay for his online service and just watch his show, presumably have $$ lost because they follow at least some of his picks.


Leonidas
Southern Greece