Jim Cramer Discussion
 

Love him or hate him (is there any middle?), Jim Cramer is becoming THE voice of stock market analysis much the way Louis Rukeyser (sp?) was for years. He has his webpage, book, radio show and cable show with one topic--buying and selling stocks. So, I thought we should have a place where we discuss his picks and pans, make a record of what he said and when, and see how things unfold.

An example of what I have in mind: He switched to bullish on Cisco (CSCO) about 10-15 days ago (I don't recall exactly) for the rest of the year. It's not moved much since then--it's been between 19 and 20 during that time--but he didn't pick it for quick pop. Same for Microsoft (MSFT).

One thing about Cramer--he's a momentum player, and if the momentum for those stocks or others switches, so will he; he'll do it publicly, and he may be wrong, but at least he'll make the call.

Any other fans/detractors out there?

I'm always very skeptical when it comes to stock market pundits and their opinions, and Jim Cramer is no exception. I do however understand that he is exceptionally influential and his words really can make prices move. I have not actually seen him on TV ever (don't have cable) but from what I gather, he seems like more of an entertainer than anything else.

I'm as skeptical as anyone else, but you have to remember that Cramer has the goods to back up the talk. He had an excellent record of making money as a hedge fund manager, so he's not just another talking head. Having said that, I have been a member of his website since its inception. I have learned a tremendous amount from reading him, but its mainly about style, discipline, and the macroeconomic picture. I haven't made any $$ from his stock picking. There are other commentators there who have made me some serious cash.

All I know is this guy started frowning on my company's stock last week, and now we are down about 10%, after about 6 months of consistent gains. The company is in great shape with record earnings and consistent growth so it doesn't make sense to me. Of course, the stock market as a whole doesn't make sense to me either.

eribrav: Cramer's site is Realmoney.com, right? I checked it out and it looked alright. After hearing your opinion on it, I think I might try their 30 day free trial. :)

Goddfather40: If you don't mind sharing, what company do you work for?

Correct
 

The other pay site I belong to is Bill Fleckenstein's website. Fleckensteincapital.com He's my axe for precious metals investing. I don't know if he does a free trial.

Almost on cue, Cramer provided this list on his website. I didn't see Friday's show, but I know he's on vacation and it was a packaged rerun--a greatest hits, of sorts. Here's the link:

http://www.thestreet.com/_yahoo/fund...FREE&cm_ite=NA

For me personally, here's some of what I hold and the latest opinion that I can remember he gave. If I misstate any of his positions, it is solely my fault and not intended to cast a good or bad light on Cramer. We don't learn about his ability as a stock picker if we don't analyze correct data.

EMC--he liked it but has now cooled on it. I think it was up about 7% from when he was more bullish.

EP--he thinks they have their act together now, and it's up about 10% from where he said he was bullish.

KFX--he didn't like it a few weeks ago and then seemed to be more lukewarm last time he was asked. I think it's up about 12% from when he didn't like it and 7% from when he was less adamant.

HDI--He's not liked it since the company reported bad numbers and fell about 8% in a day (maybe a bit more). I bought it before the report and didn't sell it as I should have (I've since adopted the Investor Business Daily rules as my own), but it has steadily crept back up. He gave the "get out" around 45.50 and it's back up about 10% since then.

AIG is the one in the portfolio I can say I bought because of his recommendation--at least it was because of it that I looked at it and decided to buy. It's up 13% since I did so.

C--I owned it before his show started, and it's been flat for the most part, but Cramer almost always mentions it in a good light.

FRO--Cramer is down on all the tanker stocks, and may be right. This one rose from his last "not for me" by about 8% on a couple of good days this week while he was gone. Overall, it's been pretty flat for me since I bought it in April, mainly for the great dividend. If the dividend can't hold, though, the stock will plummet, I think.

PG--pretty much the same as C, although I swapped out of WMT to buy it a month or so ago, and it's actually gone down some. I don't "double down" anymore, but I am thinking of adding to this position, as I took Cramer's advice and nibbled at the stock rather than committing the whole portion that I wanted to buy at once.

PGH--Cramer has natural gas trusts that he likes better, and those may be doing better, but PGH is up 11% since I bought it, and most of that gain is after I heard Cramer say he wasn't a buyer.

LU--I've been in Lucent for years (a major reason I'm taking IBD's rules to heart) but actually bought some more around 3 late last year. Cramer likes it still, but doesn't understand why it's stuck. Me either.

That's about it for what I'm holding. As you can see, I've got mixed results--his advice sometimes works and sometimes doesn't. I keep in mind the old axiom "You can't kiss all the pretty girls" and when Cramer says he likes something better than the stock I have interest in, that could mean that he's looking at something that would give better returns.

Hmm... Looking at the companies you mentioned above, I can't see any consistacy between each of their numbers (except maybe earnings growth). Does Cramer merely look for technical strength? I'm interested in knowing how Cramer screens for his stocks.

And why is LU a pick? This is one of his picks I have known about for a while and could never figure out why it is so popular. Is there a turnaround on the horizon or something else that would make its price go up?

Edit: eribrav and AVOR, thanks for the links. I'll be checking them out today.

I've decided to set up a mock mutual fund with all those picks on the site I posted (plus a few from earlier in the week). I was going to do it on Yahoo or Marketocracy, but don't know if there's a way I can so that everyone that is interested can follow what I'm doing. So, do any of you (a) know of a place where I can set up something like this that can be followed by those that want or (b) know how I can set up something like there at Yahoo and/or Marketocracy where all that want to can watch the progress?

I apologize, but I'd rather not divulge in the open forum. I've posted about what I do a few times in the other forums, but haven't stated the actual company. I'm probably just paranoid. What I'll say is that it is a small to mid cap (~$1.5 billion) that got some wall street buzz surrounding it the last couple years. I can PM you the company if you like though.

I could go for that PM. And I can assure you that no one will learn where you work from me.

I entered about half the Cramer picks into a Marketocracy account for today's trading, in an amount of $201,000. The account rose about $1,400.

This afternoon, I put in the rest of the picks, 65 in all, I think. I'll keep you posted here periodically.

for every talking head saying one thing, there's another saying another...

I don't believe ANY of them.

Every time someone is selling a stock, there's a buyer thinking it is going higher yet. The successful investor is not the one that is right ALL the time, but most of the time. Same with the talking heads--some of them are going to be right more often than the others. The point of this thread is to figure out if Cramer--the most visible talking head on stocks these days--is reliable, not to determine if he's perfect.

Agreed, but the way that most people eulogize the fund managers, it's like their god like.

Excellent point Voice.

I like the idea of this thread and it will be interesting to see how well Cramer actually performs. There's an old saying that goes something like "the quickest pathway to extreme wealth is to educate others on how to get there". So in essence ... if you write a book on stock trading, sell tapes and cd's on real estate foreclosures, and any other "program" ala Carlton Sheets, et al that can guide people to riches and you will reap the rewards of a fool and his money.

On Cynthetiq's comment above I have to agree. Just because Cramer says it with conviction doesn't mean that anyone should not do their homework. No one, Cramer included, can know the specifics on each company that he rates during his "lightning round" well enough to make the brash, off the cuff comments that he makes. In my opinion (so you know what that's worth :) ) his advice and methodology is sound. He too is usually straight up when he makes a bad call which is refreshing.

Someone else said above that he's more entertainer than analyst which likens him in my mind to Rush Limbaugh. They both have informed opions on what they speak but at the end of the day it's opinion, conjecture, and entertainment.

I like him. I'm entertained by his show. I didn't really care for him on Kudlow & Cramer or what others have called Cuddly & Crabby :D but he's grown on me a bit since then.

Do your own homework and know what you are buying before pulling the trigger on any stock purchase.

Ahhh, but there is a built-in human error in this evaluation--this human. I put all those stocks in the fake mutual fund, but I did them at different levels based on the IBD ratings. For instance, if TOL was a 99 rated stock, I put $9900 in it. If LU was 42 rated, I bought $4200. Now, we'll be able to see the percentage run up for each of Cramer's picks, and I'll be able to see how well the top rated IBD stocks did, but when I say the account is up or down a percentage as a whole, those reading need to know what I did in weighting the stocks in the account.

Second, I'm leaving everything where it is until Cramer says "sell sell sell" or rings the register or whatever he does. He advises taking a little of the table at a time when a stock is going good, but I won't have time to tend this account daily as I'd like, so it's going to be pretty much a weekly reevaluation of what stays and what goes. Some nights, I'll try to have the laptop on while I watch the show (Lightning Round especially) and make changes immediately.

Cramer says the same thing. He tells folks all the time "don't buy just because I say it, do your homework." Naturally, that's the legal eagles telling him to do that, but . . .


It is amazing how much he knows about so many companies, even if it is just shallow knowledge. And yes, I've seen him say "I blew that one" when a stock went the other direction from what he said.

Not a bad analogy, although I'm not sure I'd say either were MORE entertainer than analyst; I'd give equal weight to both portions of their knowledge and presentation.

Today, Cramer was back from vacation with a double Lightning Round, and I snagged about 35 more names to add to the list. This violates the very principles he talks about--diversification and not buying without homework. I also decided to do $5000 buys in each of the new ones because I don't have time tonight to look at IBD to set prices as I did over the weekend. In the next few days, I'll equalize the whole Marketocracy account to $5000 per holding.

He went negative on JP Morgan (JPM) and I sold my shares entirely.

The very idea that the fund managers and analysts say things like buy and sell, and then package and market those to the masses, well I'm still not sold.

The general populace is not that educated in lots of things and just goes with what seems to be a trend. Look at the pharmaceutical business and the advertised meds and ask around. People take things just because they ask their doctor and their doctor says, "Sure, I don't see any negatives to your request" and fills out a prescription a majority of the time.

Fund managers don't just make their money on their holdings, it's only a small percentage. They make money on YOUR transactions too, if you buy or if you sell, which is the bulk their income.

As I understand Cramer's current situation (and I could be wrong, and welcome correction), he has a fund he manages for a charitable foundation. Now, I'm quite sure he wants it to do well, and part of making a fund of this nature do well is to pump up the stock, but he's not currently involved in the transaction business.

He is a major stockholder in www.thestreet.com and as such, wants the public to be interested in the market. In that respect, he has an interest in getting his forecasts right rather than just getting movement in the market where he can make commissions.

When I watch the shows on Fox on Saturday morning, I'm always interested in how many shares of a stock the person discussing it presently owns, because if he or she can get a bump in the stock the next week, they have a good selling opportunity. After awhile, I've gotten where I sort of know which ones are "pump and dumpers" and which aren't, but even then, I'm not perfectly sure.

My exercise in tracking Cramers' bulls is to try to get an idea if he really has a good feel for the market as a whole, not necessarily individual stocks.

I just finished reading one of Jim Cramer's Books ( You Got Screwed ), and have a few more on reserve at the library. In the book, he spends the first two thirds of the book talking about all of the corruption on Wall Street, and spends the last third giving advice to the reader. After reading the book, it seems that Cramer's words and actions are IMHO not completely consistent.

In this quote and for much of the book, Cramer talks about how brokerage houses, mutual funds, the media, and the academics collectively screw average investors out of their money. Cramer recognizes the negative effect the media have, yet he remains the most recognized stock market pundit on the most mainstream financial news television station (in other words, he is exceptionally influential). Why would he take part in an activity he knows can hurt the average investor? To me, it's like a beer salesman who writes a book about the inherent risks involved with drinking alcohol but continues to promote his product.

DRINK DUFF (responsibly)

I might stop by at the library today and pick up his other books. I'm still interested in how he goes about his stock picking.

Where better for someone that is concerned for the average investor to be than in the media? Many times, Cramer starts a sentence with "the brokerage houses don't want you to know this, but . . . "

Not saying he's pure as the driven snow, just observing that a crusader needs a platform, too. Whether he is part of the problem or part of the solution may remain to be seen.

Hmm... Perhaps Cramer isn't as bad as I thought. After doing a bit of research, I found that Cramer owns ~10% of thestreet.com's stock. That is a significant portion of stock for an entire group of insiders to own, let alone a single insider.

In his book, You Got Screwed, He talks about how top level executives would dump their stock off as soon as they legally could after going public (and in some cases, they would sooner). But Cramer has done the exact opposite and held onto TSCM ever since its IPO, despite its horrible performance:

http://bullishness.com/images/blog/tscm0.PNG

Still wouldn't invest in his picks, but I do have a little more respect for him.

I use Cramer as a starting point for my research. I don't have time to scour all the companies out there, and in the last three months, I've been trying to invest smarter--reading IBD and trying to instill some discipline that will keep me from riding a CMGI or LU from way up there to way down there as I did in the past, thinking all will turn around.

In the Marketocracy fund I started this week, I added several more picks from Friday's show, and sold two that he no longer liked (even though he did a week ago): WWW and UPS. These will be sold on Monday morning. I also pruned back to about $5000 any of the first round of purchases that I made keyed to the IBD ratings. For instance, I had $9900 in TOL, and sold it back to $5000. Those under $5000 to begin with, like LU or BOW were left where I started with them.

Behold: the sickeningly comprehensive Business Week Stock Screener (it's free too :) ).

How's the Cramer Portfolio doing so far?

The Marketocracy funds stake the player to $1,000,000 to begin with. I haven't gotten it fully invested--only up to 75% at the end of the week. For the first week, it was up $5979, but that's with a quarter of the money in cash and with a $500 error in entering the wrong symbol and losing money because of it. I'd call it .75% or so for the week based on what was invested correctly.

These six picks all made more than 5% for the week: NSM, OVEN, MFE, GME, CHTT, MRVL

This one lost at least 5% for the week: ROST


And thanks for that link, I'll check it out. I've spend a lot of hours at www.investors.com (where it does cost to see all the sections, and I've not paid for all the premium content). I'm looking for a place that gives the earnings growth rates for the past quarters and years, as I'm looking for those showing increases in those areas for possible investments.

I just looked at the Business Week Stock Screener and am TOTALLY impressed. Thank you for the guidance in that direction.

Sigh... There goes my "market edge".

Heh heh. Just kidding of course (I never had an edge to begin with anyway :lol: ). Have fun with the screener. :thumbsup:

Yahoo has a screener but it's not quite that good. I'm looking to incorporate IBD's CAN SLIM method into stock picking, and the screener at Business Week seems to have what I'm looking for as far as earning growth numbers. Cramer scouts 'em, I screens them.

About 17 more stocks were mentioned favorably, and were added to my Marketocracy account. None were sold, but Cramer is now somewhat bearish on drug stocks and transports. He declared a new bull market has begun, in part on the fact that good news didn't drive down stocks--earning season has begun and stocks are reacting well to good news.

The account is up to $1,010,516 for a gain of 1% in the first five days.

Managing this account is largely going to be at my discretion; if I think a stock has run up enough or dropped too much (I'm using IBD's 8% rule on drops), I will have to make the call as to the sell. As such, it probably won't mirror Cramer's own ActionAlertPlus fund, but that was never the point in the first place.

Another 2 dozen stocks added today. With $700,000 of my stake invested, the account is up $11,510. I'm going to be about 85% invested after the trades tonight are made in the morning. Also, I've dropped TMX, DIS and TIBX. Cramer didn't actually say to sell the first two, but he was lukewarm on them. He said to get out of TIBX, and I'm not sure why, but in accordance with my guidelines, those are being sold. DIS was up 1.72%, TIBX up 2.81% and TWX was down 0.18% in the week I held them.

I sold ROST last night when it was down 8% from the purchase price. Cramer actually mentioned it last night, said it was OK, but he liked TGT better. Not quite a ringing endorsement, and I already have decided how to manage the account. Another 20 or so stocks were bought, bringing my fund to around 90% invested.

HOWEVER, a caller asked this precise question--do I sell when something is down 8%, and Cramer said "It depends on why you bought." If for a trade, then yes, get out. If for an investment, then it's time to check the fundamentals and see if maybe it's a better buying opportunity. Buying more at 8% down is hardly doubling down, but in this instance, Cramer is in direct conflict with William O'Neill of IBD, who has the firm rule that 8% down equals an exit from the stock.

Cramer is very hot on tech, and is blessing many stocks that would not pass the IBD test of being in the upper 80% of earnings growth. For example, PEP is only rated as C+ on IBD and he liked it, and PIXR was one he said he wished he owned, and it has a D rating. He is, at the moment, a raging bull on buying stocks. He just slobbers when DNA is being discussed. That one, however, is an A+ on IBD's list.

How is the IBD grading system set up?

See note 24. I abandoned that, because with Cramer firing two dozen new names at me every night, I didn't have time to look 'em up on IBD and then enter them; I just went with a standard $5000 start on each.

I'm about to decide to try ONE more fund, and this one will not be based on single mentions in a lightning round, but rather those that he goes to great length to explain why it's going to do well. TOL, DNA, PEP, MSFT, INTL, and the like. His off-the-hip remarks are fun to hear, but they are just that.

Having 200 stocks in a fund is going to be hard to watch carefully and manage as I would in real life, and that's the biggest part of this exercise--to see if Cramer is a good starting point for research.

I didn't see Thursday's show, but did grab about 20 new names for the list on Friday. Cramer is now a raging bull, and blessing a lot of things that he didn't care for a month ago.

BTW, Soma, you said you don't have cable, but you can get a dose of what Cramer is like by listening to his radio show online. Go to http://www.thestreet.com/m/_tscradio/radio/ and I think you can hear whatever the last show was. According to the site, Cramer didn't host on Friday, July 15, so you may want to wait until he does host again next week.

When I started this, I didn't realize what an undertaking it was going to be. I have to jot down the symbols of the stocks and then go to the Marketocracy page to make whatever buys or sells I have to do. Last night, I watched it with my 7 year old in the room and couldn't keep up.

Add to that the feeling I get that the snap decisions Cramer rattles off are just that--snap judgments--and I think I'm going to modify my plan of tracking him to adding only those stocks he talks about in a separate segment, not the lightning round. Those sections of the show are planned, research is done, and the opinions would be more subject to scrutinty (i.e. the basis behind them).

So, in the next few days, I'm going to modify the account to reflect my new attitude (and time limitations).

I thought this was hilarious. (FYI, Yahoo! was down 10% today after releasing its 2nd quarter earnings report.)

http://fickletrader.blogspot.com/2005/07/good-ad.html

Here is a site tracking the performance of Cramer's picks. They are just getting started but I'll be keeping an eye on it.

http://www.positionplays.com/madmoney.html

I think this site is going to be doing what I was trying to do--give an objective report on what Cramer was saying OVERALL, not singling out a stock that he's missed or gotten right.

JcS

I had time today to look at the Marketocracy account. Three stocks needed to be dropped as violating my 8% down rule. AMLN, FFIV and DLB were all down more than 10%, and were sold.

On the up side, the account looks to have 2/3 of the stocks picked up (some as little as .28%, some over 20%) and the total position is up $12,000 since I started (1.2%) With better attention paid to this, the losses would not have been so steep in those that were sold today.