Maybe you read the Barron’s article, which found that Cramer’s picks underperform the S&P if held longer than two months. They did beat the market over shorter periods, but I’m not sure transaction costs or bid/ask spreads were included.
I believe he’s good at making himself money, and many people find him entertaining. When I’ve watched his show, I don’t believe he emphasizes the risks & costs of short-term trading enough, and I think he encourages trading practices that will lead to underperformance by individual investors.
I’m not interested in buying his books, but I’ve read a few reviews of the newer book delirium mentioned that are encouraging. Cramer apparently recommends passive index funds for many folks, which I agree is the best strategy for most individuals. He’s a natural showman, but maybe he can dial it down in his writing.
I don’t know many popular media investment personalities, but I find Suze Orman’s approach more likely to be helpful to the average investor, relative to Cramer. She has some strange biases with which I disagree, but she’s generally grounded.
You could, but you would be wrong to do so. Sidd’s article actually argues your point, not the article that was posted earlier (the Seeking Alpha article). Thanks Sidd.
He doesn’t beat the S&P. I was being overly generous in my memory of what I’d read.
1 is true even if you don’t include Lightning Round picks.
As for beating the S&P consistently, well, that takes talent but there are a lot of people who do that. Everyone will have periods over a long run where they either outperform or underperform, but Cramer has consistently underperformed.
Personally I still suspect he’s the face for a mass volume pump and dump scam. Imagine being a friend of his and building a moderate position in even a tenth of the stocks he goes bull on, and preparing to meet demand. You sell the day of the announcement, maybe even short your own stock if the Cramer audience really buys his spiel, and then funnel the proceeds into a stock he’s going to pump next day, next week, next month - whatever, depends on the stock.
In the long run, you win, easily beating the market. Just can’t get too greedy.
Cramer never picks shit stocks so his audience never gets really burned. More likely than not, they buy, they see it stagnate, and they think “aww, it’s just the one Cramer misses every now and then”, forgiving all because after all, he’s Cramer. Magna cum laude superfund manager etc., but with the common man humility to be able to face up to the occasional gaffe, showing you that he cares. He’ll also find gems every now and then, like anyone else does, and be able to point to them.
