Who likes Mad Money by Jim Cramer?

What do you think of him and his ideas? Is he full of it or does he just enjoy watching the "homegamers" try and play follow the leader?

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  • 1 decade ago
    Favorite Answer

    A lot of people will tell you they don't like him, that he's a clown, etc, but remember he is a VERY smart guy. (Graduated from Harvard, worked as a newspaper reporter, got his law degree from Harvard, Harvard Law Review, broker at Goldman Sachs. Co-founded the Street.com. Made $100 million in the stock market and got out at the top. Wrote 3 books and launched a TV and radio show.) That's more than all his detractors have ever accomplished.

    You should understand what he is trying to do - he is TRYING to teach you how to THINK about stocks. Yeah, he makes a lot of recommendations and he's wrong a lot of the time, but he is trying to get you to understand how the stock market works. How professional investors think about stocks and how they go about researching ideas.

    You might not agree with his picks, but he should get you to think.

    I know professional investors who watch the show every night because he is always giving them a new idea to research, a new stock to look at, or something to think about.

    You shouldn't copy him, you should learn how he thinks. That's the value of the show.

  • Anonymous
    1 decade ago

    Academic analysis suggests Cramer's picks don't do that well.

    Kellogg researchers who looked into his recommendations and tracked how they did note for example that:

    "Taken together, our results suggest that the aggregate losers in our event study are the Mad Money viewers who decide to buy the recommended securities when the markets open the following day, and that the winners are the market makers and arbitraguers [sic] who sell the overpriced recommended stocks on day 1, as well as the traders who sell the recommended stocks on days 2 through 12."

    There's a nice analysis of this paper on the 'Seeking Alpha' link below.

    However, having often listened to his radio show via podcast (now cancelled as of the end of 2006 unfortunately) I'd agree with others' responses to your question that he does give new investors great general insights into how markets work (for example in understanding that tech stocks are subject to seasonality i.e. that they usually do better at certain times of the year).

    The only thing is, I suspect that the radio show enabled a looser style where he could digress into this sort of really useful stuff that is not so easy to do in the more pressured environment of TV episodes of Mad Money - TV soundbites and his onscreen antics being what they are. Having watched a few episodes I gave it up.

  • 1 decade ago

    I've made good money learning from Cramer. In less than a year, I'm up 40% on Goldman Sachs.

    Buy & hold as a strategy can be profitable in limited cases. Most people tend to hold stocks for too long. An emotional attachment develops.

    I don't like paying capital gains on my trades & investments, but it's better to have income and pay taxes than not to have the income (or have less).

  • Anonymous
    1 decade ago

    He was good at the start but now there is a serious "Cramer effect" as stocks rise or fall on the panic he can create. I do think he is honest but as he admits, even the best stock experts only bat about 50/50, so as he says "do your homework" and don't gamble money you don't have to spend. Conversely, I trusted AG Edwards years ago, and when they changed from a negative view of Lucent, to "BUY" after it had already quadrupled, I should have had the brains to sell out right then, but their single analyst was in good with the Lucent CEO, and then their "growth potential" in China was undercut by the Chinese embracing the technology, but just duplicating it themselves. They also discouraged me against investing in railroads ten years ago, and they've doubled on average since. When you play "follow the leader" you make their profit by buying what they're selling, but that's the way all the big brokerage houses work, them and their biggest clients first, then they share the "tips" with lower echelons. And I believe he is wrong on alternative energy, if the situation in Iran literally blows up, even though barely any of our oil comes from the region, the profiteering oil companies and gas distributors will hike prices, right now alternative energy is a threat to oil and that is why they lower prices, to lull us into another "shortage" just like they did in the 1970's, when Nixon announced we had to get serious about alternative energy and quit being dependent on importing oil.

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  • Anonymous
    1 decade ago

    Jim Cramer is a very entertaining personality. I don't take his picks seriously but as others have stated there are some real pearls of wisdom in there. I love his analysis of actively traded mutual funds and how these funds are just in business for their shareholders and management fees. It was amazing when he compared a fund company's stock performance versus their best performing mutual fund.

    I'd like to see Kellogg take another look at his picks in a year or two. Short term performance is just noise.

  • 1 decade ago

    Anyone who gets the average person who otherwise would avoid the stock market to become interested in building a portfolio is doing a great service. Whether his track record of his recommendations is on average better than the market index is up for debate but I think that's secondary to the primary benefit of the show and book which is really about providing the tools necessary for the average person to take control of their own investments and becoming a life long investor.

  • 1 decade ago

    Cramer's show is completely speculative. If you want to buy and hold companies to actually invest in he is not a good advisor. Not to mention the serious tax implications of holding stocks for less than a year.

    If you want to seriously invest in good companies for the long run, read some books by Peter Lynch.

  • gatzap
    Lv 5
    1 decade ago

    Most are not as irritating as Kramer but I don't like any of the gurus. With large followings they create a self full-filling tide - for a while at least. Toby and Kramer are prime examples. Like most of them Toby has so many recommendations that it is easy to have a few big winners to lay claim to.

  • Anonymous
    1 decade ago

    Cramer called for all his homegamers to sell tech.....Last I looked tech is roaring ahead stronger than ever.

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