Blog entry about Cramer's show

[chonfilyclown]

Mad Money

I admit it. I love the show Mad Money hosted by Jim Cramer. Cramer is high energy, takes definitive positions on stocks, is tough in interviews of CEOs, reveals his strategies and logic on stock picking with disarming candor, and admits to his winners and losers (although we do not get a total). He also is genuine in his efforts to "make you money."

Here's the rub. The show undoubtly will encourage the home stock pickers to become day traders and lose their shirts. Empricial research by Terrance Odean at the Haas Business School has shown what pros in the brokerage business all know -- individual traders are suckers. ("All that Glitters: The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors") They inevitably lose money to the pros. The best play for home traders is holding some form of investment indexed to a major market index -- an indexed mutual fund or an exchange traded fund (ETF). They minimize trading costs and hold a diversified claim on the market itself.

So the pros will applaud the success of Mad Money hoping that it encourages the marks to trade. Recent callers to the show, tauting gains ("I made 140,000 on your call on Google") should raise red flags. The testimonials (I assume -- hope-- are not stage by the show itself) mimic classic huckerterism. Listen to Cramer and enjoy his show. Do not select a few trades (urged on by the callers that tout big gains) and lose your money. Invest 60 to 85 percent of your money (depending on your abiltiy to take risks) in an indexed fund and put the rest in US Treasuries.

[cnijbtwl14]

Here is another interesting blog post -

BenSilverman.net
Indie Cred Don't Pay The Bills
Thursday, March 24, 2005
Investment Porn: Jim Cramer's Mad Money

My work day ends at 6:00 PM usually. By that time, I've been in front of my computer and on the phone for nine hours. I spend my day researching, analyzing, writing, talking and bullshitting about stocks, the economy and business in general. Come 6:00 PM, I want to crack a beer and forget about EBITDA, inflation and insider stock transactions. Unfortunately, Jim Cramer won't let me.

Cramer's new show, Mad Money (CNBC, weekdays at 6:00 PM ET), has quickly turned into must-see TV for me (ok, I usually listen to the simulcast on XM Satellite Radio while I'm making dinner). Mad Money is an investor's delight - a solid hour of stock picking and commentary from one of the investing world's brightest personalities. It's also an amazing showcase for Cramer, who without Larry Kudlow by his side, can concentrate solely on stocks (I love Kudlow, but he's better suited to dealing with broader subjects and not individual stocks).

The show has a simple format. Cramer takes calls from viewers who have questions about individual stocks and he then takes a few moments to discuss the stock and pass judgment. Later in the show, he does a "Lightning Round" where he simple gives viewers a thumbs up or thumbs down on a stock with no discussion involved. The most intriguing segment of the show, however, is the interviews he conducts with CEOs.

On Wednesday, he had David Aldrich, the CEO of wireless semiconductor outfit Skyworks Solutions (NASDAQ:SWKS) on to defend the company's stock, which was just a few days removed from hitting a new 52-week low. Cramer asked Aldrich point blank if Motorola (NYSE:MOT), a major customer, has been pulling orders. Aldrich, after skirting the issue the first time, finally said no.

Cramer can be accused of being a Wall Street suck-up, and probably not without some reason. He's a former hedge fund manager, and the co-founder of TheStreet.com. He's probably defended more companies and executives than he's attacked, and though often convincing, he can sometimes come off as an apologist for America's ruling class (yes, that's Wall Street and the folks in the board rooms, my friends). He's a Wall Street insider if there ever was one, but that, of course, works in viewers favor.

The rest of the article is here:

http://bensilverman.net/2005/03/investment-porn-jim-cramers-mad-money.html

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Cramer's pre's predictions for 2005

Interesting article in New York Magazine in which Jim Cramer predicts what will happen in 2005. Now that it is half over, it is fun to read where he thought we were headed.

http://www.newyorkmetro.com/nymetro/news/bizfinance/columns/bottomline/10731/
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[cortnkhi26]

Intersting article:
June 29, 2005 - Deconstructing Cramer
from CXOAG Investing/Trading Insights

In this entry, we review the biweekly New York Metro commentary of Jim Cramer regarding the stock market via his archived articles since May 2000. Mr. Cramer is among the most visible and prolific members of the financial media. He is currently the host of Mad Money on CNBC and of RealMoney radio on WOR in New York and TheStreet.com. He is Director, Co-founder, Markets Commentator and Advisor to the CEO at TheStreet.com, where he offers his ActionAlertsPlus email service. He makes hundreds of buy-hold-sell recommendations on individual stocks each month via these channels. We use here his New York Metro commentary because of its lengthy archive and manageable pace. We selected from that commentary all articles which address the future direction of the overall stock market, plus a few articles on high-profile stocks and sectors. The chart below extracts highlights from this commentary and shows the performance of the S&P 500 index over the 21, 63, 126 and 254 trading days after the publication date for each item. Red plus (minus) signs to the right of specific items indicate those subsequently proven right (wrong) by the market. We conclude that:

Mr. Cramer is right about 50% (25 out of 51) of the time with his stock market predictions, prone more to headline hyperbole than equivocation.
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.

See the rest of this article here:
http://www.cxoadvisory.com/blog/reviews/blog6-29-05/

[CUVXN]

For Thierry Martin - what's your suggestion?

In response to Thierry Martin's blog. Is it your recommendation to invest in mutual funds as well as stocks in order to stay diversified?
Should viewers of Jim Cramer's "Mad Money" be somewhat skeptical of his stock picks?
You sound like you don't put much faith in what Jim Cramer says on his show. Is there a reason? :?