Anyone trust Jim Cramer's "Mad Money" recommendations?

[Dunbar]

Originally posted by: MaxDepth
The pressure of managing a fund got to him. He was very successful but it finally got to him and he had one of those Jerry Maquire moments (although he wasn't fired, he just quit.)

I heard an NPR interview with him a few years back (I think it was about how money changes your relationship with people.) He basically quit because he could never get over the trades that he lost money on. One year he made something like 450 million and lost 300 million on his trades. Even though netted a signifigant profit he couldn't sleep at night thinking about the losses. Even after he became successful he was scared to get mortgage on a house. So at that point, since he could afford to, he retired.

Personally, I think that he has a lot of "energy" but his show lacks the content to keep my interest.

 

[ballmode]

Business week did an article about him, and they kept track of his stock picks over the past year. He was like up 2.79% or something which was higher than the 1.4% the market went at. Keep in mind it was every stock he suggested on the show over the whole year

That has credibility imo.

 

[Descartes]

Well, I can't match JLGatsby's well-connected nature since he's obviously the great, but...

I am an active trader with about 10-20 trades a day and an average holding time of 4-7 days. I have an automated strategy that I built that puts together my trades for me so as to remove my discretion and emotion involved with the plays. I average about 2% a week.

That said, I have actually made money on Cramer's plays... many times. I have seen many up his picks rally up 10% or more from the time of his mention, and I've been on-board for the ride quite a number of times. I remember when he pumped SWN last year, and I ran that for what seemed to be an unstoppable rally all the way into the $70s. There are also some active traders that base their strategies on Cramer picks for quick gains. This is typically referred to as scalping.

That said, I do not follow his picks blindly like so many do. A lot of people lose a lot of money by following Cramer's picks, but they do so partially because he's such a fantastic showman, imo. People get excited, make horribly irrational decisions and lose a lot of money; sadly for them it's the disciplined traders that take their money.

Cramer is great for entertainment value, but for the average investor I think his enthusiasm is actually quite dangerous. Do your OWN research or let someone else manage your money for you.

 

[Descartes]

Originally posted by: Syringer

Originally posted by: JLGatsby

Originally posted by: MikeyIs4Dcats

Originally posted by: JLGatsby

Originally posted by: talyn00

Originally posted by: JLGatsby
As someone well contected to the stock trading community, most experienced traders regard him, CNBC, and TheStreet as a joke.

what's contected? And which experienced traders regard him, CNBC, and thestreet.com as a joke??

Most respectable traders I've met online.

Most true experts regard him as a joke.

I'd rather listen to someone like TokyoJoe, he has 10 times the trading skill than Cramer.

you are "well connected" because you talk to traders online? That's like me saying I'm an IT guru.

What would you define as well connected?

I know personally some of the top online traders. Big time guys.

I've worked in the investor relations industry.

I was posting on Silicon Investor as early as 1997.

I know all the histories. All the names. All the stories. I watched the whole trading boom of the late nineties from start to finish.

And I've been a trader myself for 6 years.

So what in the hell would you define as "connected" if I do not fit that description?

How can you be a trader if you're posting at noon on a Monday?

I am a trader, I have a full-time consulting job, and I post here at noon.

Trading does not take a lot of your time. I do my research at night, find my plays, put them into my system and let it run. The only thing I do is occasionally look at the results for the day.

 

[middlehead]

Originally posted by: glugglug
A good example is last week I saw him hyping Seagate, because the hard drive industry will improve with drives being used in MP3 players and DVRs, etc. But that isn't where seagate really shines over other drive manufacturers -- they are big in the server segment of the market, not the cheap stuff that would go in a DVR, or the high capacity that will be needed when DVRs are recording in HDTV. Maxtor would be a better pick given his reasoning.

And Seagate's buying Maxtor. Research is useful

 

[Dunbar]

For all you traders, how much money have you actually netted after losses and trading expenses? Percentages are one thing, but I'm interested in how much mula you're actually making.