he has a net worth of … and he's always on the news, so he must be legit… right?
Who Is Jim Cramer?
talking head over at CNBC where he hosts Mad Money, a show
graduated from Harvard College with a bachelor degree in government and later with Juris Doctor degree from the Harvard Law School… and it was during law school that he started investing in the stock market
After graduating with his law degree in 1984 he started working as a stockbroker for Goldman Sachs and then left to start his own hedge fund in 1987.
The Street in 1996 where he used the term “Chicken T!ts Tartars” when referring to stocks he predicted would moon in price
guest commentator on CNBC in the late 90's and started hosting Mad Money on CNBC in 2005, which of course is still around today.
A Track-Record “Slightly Worse Than a Coin Toss”
founder of CXO, Steve LeCompte conducted a study to see just how accurate these investment gurus really are.
gathered 6,584 written forecasts for various investment gurus and tracked the outcome of these predictions
18-month period between 2004 and 2006
There were 62 forecasts made by Jim Cramer during this period, most (maybe all) of which came from a column he used to write for in New York Magazine, and the accuracy rate… only 46.8%
2016 study of his recommendations made via his Action Alerts Plus subscription advisory service found that his portfolio here actually trails the S&P 500, meaning that you'd be better off just buying a good S&P 500 index fund. A study by researchers at Wharton School at the University of Pennsylvania found that from 2001 until the time of the data collection (2016), Cramer's picks trailed by -1.39%. His portfolio did outperform the S&P at some points, such as several years before the 2008 recession due to having selected small-cap companies that performed well pre-recession, but other than that it hasn't faired too well… and the cumulative gains are what we are focused on and are what trailed the S&P 500 altogether.
dogs with the loudest barks
- Told his audience to buy a handful of tech stocks back in 200 before the bubble burst, many of which are bankrupt or have been bought-out
- said buy US banks back in 2007
- Told followers to sell Hewlett-Packard back in Nov 2012… which went on to rise about 100% in 6 months
However, on the upside, he claims to have only one year where his overall returns were negative, which was 1998. And… let's not overlook some of his better moments, such as how he claims to have sold all of his stocks before Black Monday back in 1987… which proved to be a very smart move.
Trouble & Controversy
recommended 3 stocks that he was holding… which he made more than $2 million off of.
Following this recommendation, Smart Money magazine received negative press and had to create more strict rules regarding outside contributors.
Should You Follow His Advice?
Better Alternatives
Enter your text here…
Heading H2…
Enter your text here…
Heading H2…
Enter your text here…
Heading H2…
Enter your text here…