Guest Post: Cramer’s Best Buy Earnings Recommendation Gets Crushed
Submitted by Damien Hoffman at Wall St. Cheat Sheet
On last week’s Mad Money, game show host Jim Cramer told his acolytes “to pick up [Best Buy] BBY before Tuesday morning’s announcement.” First, trading stocks ahead of earnings is the riskiest aspect of trading. Most professional traders close their positions ahead of earnings and decide what to do after the announcement. The reason for this risk management strategy: guessing earnings is a complete gamble.
Enter our circus show friend Jim Cramer. While Jim is busy telling people he’s trying to make them better investors, here he is (again) giving investment advice to use the riskiest tactic in trading. Well, I am sad to say Jim’s ESP was dim, and those who started buying BBY into earnings are now getting slammed. The company missed expectations for margins, and the stock is trading down almost 7% as I write.
As Jim says in his Stock-Picking Rules to Live By, “Just because someone says it on TV doesn’t make it so.”
(5 votes)
»
- Login or register to post comments
- Printer-friendly version
- Send to friend
on Tue, 12/15/2009 - 12:11
#164653
I will bet you $1 he is saying buy more this afternoon on his show.
why people still listen to him, or why he has any credibility is beyond me. Thanks for the write up though.
on Tue, 12/15/2009 - 12:27
#164668
Well he had some great picks too.
I stayed off entirely from AAPL train, even though technicals were point to it and I really regret it. My reason? Cramer was pimping it every day and I'm inclined not to like AAPL products. So that sort of analysis threw me off a nice trade.
on Tue, 12/15/2009 - 12:12
#164655
yeah, but give the guy credit on Bear Stearns will you?
or CIT...
on Tue, 12/15/2009 - 12:13
#164657
It never ceases to amaze me that this buffoon remains on the air.
Even more amazing are the chimps that follow this chumps recommendations.
on Tue, 12/15/2009 - 12:13
#164658
Oh yeah.... well AMZN is up .4% today so his $216 price target is still in tact!
on Tue, 12/15/2009 - 12:18
#164663
I'm sure Cramer's probably much better at nose-picking.
on Tue, 12/15/2009 - 12:29
#164671
It was a swell pump and dump by Goldman's very own (and owned) personal garbage disposal - suck the rubes in and sell the pump to them - look at that gap up/island yesterday - can you say Goldman engineering at its finest? Which side of the trade do you think Goldman's prop desk was on yesterday?
Coincidence? I think not.
on Tue, 12/15/2009 - 14:48
#164861
Considering that the specialist for BBY is Spears, Kellog & Leads, which is owned by Goldman Sachs, your suspicions are well-founded.
People, here, wonder why Cramer is still on the air. This is why. He's always willing to do "The Job."
on Tue, 12/15/2009 - 15:40
#164945
Booooyah!
CIT was his best pump job EVER
on Tue, 12/15/2009 - 12:35
#164682
Jim Cramer's advice = Lighting $100 bills with a Zippo. Caveat emptor.
on Tue, 12/15/2009 - 12:45
#164692
Do your homework people - my bad - I will put myself on the wall of shame.
on Tue, 12/15/2009 - 12:56
#164705
"Cramer". 'Nuff said.
on Tue, 12/15/2009 - 13:06
#164716
Coming from your average Joe Six Pack, how could one blindly keep pouring their money into the stock market at all? Your average Joe investor is not picking apart profit and loss statements and if they do take the time needed to do so, they are only given half the knowledge they need about actual assets and liabilities based on fraudulent accounting tricks. The whole thing is a big stinking gamble based on lies and paper promises.
Do you then neglect any appropriate research and let the fund manager take care of the due diligence? Why would it matter when you take into consideration that the fund manager also does not have the whole picture regarding that public firms financial stability and ability due to these accounting gobbildy-gook?
When I pose this question to other average schmucks such as myself, they point into the direction of 401K investments being tax deductible and company matching means. So it is free money. How could walk away from that? That answer, of course, does not address the concerns which I have about accounting fraud and not enough time for proper due diligence on investing prospectus. Free money, so-to-speak, is meaningless when it is taken away through stock dilution and market crashes engineered by the Fed.
The whole game stinks and even when I posture the realities in front of those that blindly sock away any extra income they have into this game, I am greeted with snide smiles indicating that I am nucking futs or the blank stare of a toddler that is busy soiling their diaper.
The hope I have for this society is slim, but at the same time I have been talking so much about this recently that when events come to pass as they will, those same diaper soiling toddlers will be asking me what I was talking about back then. Not that any good will come of it, but I will be there to talk when the time comes.
on Tue, 12/15/2009 - 13:07
#164719
The CNBC pump monkeys continue to be comical. Just now, MLee interviewed Jim Chanos on Fast Money Halftime report. The looks on her face because he wasn't buying into the shit she wanted to pump was classic. Funny interview. Then she interviewed Adami and claimed Chanos was only talking his book. Never hear that when they are pumping their shit. What a joke. Proves your better off listening to Jon Stewart than the so called "best in business worldwide."
on Tue, 12/15/2009 - 13:16
#164731
I don't think it was Tiger Wood's doctor caught at the Canadian border with HGH and steroids in his little black bag...
After all, it is Cramer's nuts that keep shriveling...
on Tue, 12/15/2009 - 13:24
#164747
I'm quite honestly surprised someone has clipped that guy yet.
Last night he said this:
<<<CitiGroup (C Quote) is a "buy, buy, buy," on the heels of its $17 billion equity offering to finally repay its government TARP loan, Jim Cramer told the viewers of his "Mad Money" TV show Monday. >>>
C jumped 2% afterhours on heavy volume only to gap down this morning and resume it's circling of the toilet bowl. He is such a fraud!
on Tue, 12/15/2009 - 13:44
#164780
Seriously, how much money could you make by always doing the opposite of his recommendations? Has anyone analyzed this possibility?
on Tue, 12/15/2009 - 13:45
#164782
Jim Cramer??? Oh, you mean the guy who probably belongs in jail.
www.youtube.com/watch?v=gMShFx5rThI
on Tue, 12/15/2009 - 13:59
#164801
Jimbo should have gotten credit in Rolling Stone for
being court jester of the Rubin court. The CNBC cameras
never pans down to his huge clown shoes.
on Tue, 12/15/2009 - 14:10
#164810
That's funny, buybuybuy sellsellsell Cramer has also warned home-gamers to never mess with a stock immediately before or after earnings report.
on Tue, 12/15/2009 - 14:25
#164831
I find him objectionable on every level
on Tue, 12/15/2009 - 14:31
#164841
This is the same guy who a year ago called the housing bottom for June 30, 2009. Does it look like a bottom here?
Only need to remember one thing ... he works for Wall Street. They have stocks to sell.
on Tue, 12/15/2009 - 14:42
#164852
Anyone who follows his advice deserves all they get.
With his calls on Bear and CIT if people don't aplly due dilligence, then the trade is a risk.
on Tue, 12/15/2009 - 15:02
#164883
"guessing earnings is a complete gamble."
should include the caveat "unless you have good inside information." This wouldn't apply to Cramer as he is only a tool for bucket shops and phony operators.
on Tue, 12/15/2009 - 16:06
#164974
Cramer is (bad) entertainment.
Anybody who takes anything he says seriously is (IMHO) a total mental case.
I imagine he has cost quite a few "unsophisticated" viewers a lot of cash.
He claims he has already been the object of death threats on several occasions which isn't really surprising.
He is a fraud and a shill and yes, he will "Do The Job"
It pays well.
As far as clipping him is concerned, he isn't worth the bullet in my opinion, however, it would be hard to miss that mellon with a double tap....
on Tue, 12/15/2009 - 16:11
#164978
The worst thing about Cramer is when he decides to pimp a stock you already own. I've held Wendy's since 2008. 2009 has given three great peaks to shave off profits, then Cramer decides he likes it. It gets one idjut bump then goes flat. Now I'm looking at changing my whole timeline.
Here's why Cramer stays on the air: stock pickers have to keep up with which of their positions he's going to assassinate each night.
on Tue, 12/15/2009 - 16:12
#164981
Simple procedures sometimes makes big difference. A law could be passed whereby anybody who mentions a stock pick or recommendation,on a national media outlet,has to accompany with his recommendation,a chart with his real time position(with advanced tech available now that should be doable).
on Tue, 12/15/2009 - 18:33
#165158
Ironically Cramer didn't like Best Buy back in February:
Jim Cramer's Lightning Round Cramer's 'Mad Money' Lightning Round: Stay Away from Best Buy
By TheStreet.com Staff 02/13/09 - 07:51 PM EST
Best Buy(BBY Quote): Despite Goldman's comments that Best Buy was going to a huge step up in earnings because of Circuit City, he says consumer spending is too weak and to take your profits on this stock.
on Tue, 12/15/2009 - 20:24
#165324
I guess the cast will be screening out the BBY calls...