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Finance Professor "Invests" In Jim Cramer's "Buy Right Now" Portfolio, Loses Money On 72% Of Stock Picks
On April 6, just as the market was topping out, Jim Cramer wrote a column laying out what he called were "49 Stocks to Buy Right Now" which he qualified as "stocks that are clearly marked as winners no matter what, because they are domestic and because they do well precisely in this kind of environment."
He further rammed his picks down the throats of anyone gullible enough to actually listen to Cramer by saying that "every single one of these companies reported excellent last quarters, and with no exceptions their charts are pretty much perfectly made for this downturn.... You would not be able to get into these stocks without this selloff, and all of these companies are simply not going to skip a beat because of what came out on Friday."
One person decided to test just how "made perfectly for this downturn" Cramer's stock choices really were.
On April 6, a retired Professor of Finance in Southern Illinois, David England, unveiled the "Cramer Challenge" when he bought $1,000 of each security on Cramer’s list (in a paper-trade account of course - because in this day and age, everyone "trades" virtually, plus who would actually risk real money listening to Cramer) at the close of the following day.
England further put his own money on the table with his Gentleman’s Challenge. His offer was that after six months (October 7, 2015), if more of Cramer’s stock picks were up than down, England would pay for Cramer to fly from New York to Marion IL, put him up in a local Holiday Inn, and treat him to dinner. Cramer was to return the favor in New York, if more than half of his picks were down.
Cramer never responded to the wager offer.
England proceeded to tack the portfolio’s performance. England kept a weekly record of the results for the last six months. He also had the results audited by an independent third party.
Six months later, on October 7, England unveiled the results, and the performance of Cramer's "Buy Right Now" stocks that were "marked as winners no matter what."
His findings: only 14 of Cramer’s 49 stocks closed higher than their April trading price, 28% success rate. It also means that 35, or 72% of the total, closed lower than the day Cramer recommended said portfolio of stocks.
What was the total portfolio return? A 7.09% loss in just 6 months.
In lieu of a free dinner paid by the Mad Money host, England had this to say:
"No one is looking out for the little guy – the investor on Main Street,” England says. “Wall Street will always be taken care of. When was the last time you saw any national media audit the results of the so-called 'Market Gurus'?"
"I have nothing against Mr. Cramer personally, but investors have to be aware of the risks if they blindly follow these so-called Market Guru’s. As a trader, investor, and Financial Educator, I have seen students of all ages jump in head first, purchasing stocks on “Buy” lists without using any buying systems as analysis. I understand the temptation because it’s so easy to just follow these recommendations and purchase the stocks. But it can be a recipe for financial disaster."
* * *
None of this should be news to anyone, and we are confused why England wasted his time with this particular exercise when he could have simply done the opposite of what Gartman recommended for the past 6 months (with the benefit that it changes every single day), and be the owner of several Greek islands by now.
For those curious, here is Cramer's "Buy Right Now" portfolio as announced on April 6, and how it traded through October 7.
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So, what are you saying? Bear Stearns is fine....
https://youtu.be/V9EbPxTm5_s
Just goes to show what 'leaders' of higher ed don't know.
Serves him right.
===> Not Shocked
===> Shocked
Everyone should be grateful that the 72% loss goes to Kramer and his buds and pays to keep him providing that great entertainment and advice.
Plus, folks get to keep 28%.
Kind’a like the government and the Hillary circus.
He's a professor, therefore he's a fool.
A fool and his money are soon parted.
And one last note, HA-HA!!
Thanks for the 'insight' professor, but here is a harder question for you. Who's the greater fools? Cramer's 'students' or your students? Now that's an answer I might pay to know.
Oops, I misread in my initial scan of the article.
The actual loss was only 7.09 %.
Kramer is way better than I thought..
I'll go with the random monkey dart board picks.
Probably do better to short Cramer's buys.
This a guaranteed way to make money. Cramer is a contrarian indicator. If you're doing the opposite of what he's saying, you'll be just fine.
Im Shocked........ That He ONLY Lost 7% ...
If stawks are doing wrong then buy US treasuries, problem solved ;)
Zerohedge, please stop posting Kramer stories, we all know he's a complete fraud like the "market game"and he doesn't deserve the attention.
It's not even funny anymore.
In case you are confused his job is to sell shitty stocks owned by institutions, to morons.
Job well done fuckhead!
RIPS
You've managed to compress the man's entire existence into a succint sentence. Well done, sir! Have an upvote.
I think Jim Cramer missed his calling. As a fluffer. He seems really good at it.
pods
Hey, the post collapse world will be an interesting place for the Cramers of the world. People gotta eat.
I downvoted because I was shocked, simply shocked, by this outcome! #shocking
-7% funny had to read again
Yeah, Jim ia professional.
So, his advice is as valuable as an education at your university type of place of learning is, Professor boy.
Think of your investment being like voluntary professor type student loans, and you got a good look at the real world.
lol suck shit retard professor
wow -16 votes! what did i say?
you wrote, "lol suck shit retard professor"
I personally found it really funny. To do some really stupid shit things, one needs an education. The more expensive, the better. I upvoted you.
Professor was merely running an experiment to test Cramer's investment prowess. By exposing what most ZH readers already knew, he is providing a service to the public, thus he is not a bad guy.
Cramer, on the other hand, should be the one designated as the shit sucking retard.
oh so prof. was doing a " fantasy " investment, just tracking them not really buying them, i guess he really did deserve that professorship. i take it back. he aint sooo retarded after all.
Professor, apparently you didn't realize that Cramer is entertainment posing as tradeable advice.
You and I have to very different ideas of what entertainment is.
So you're more of a 'Tijuana Donkey Show' kinda guy? Me too, though they're not all that different.
No, the 'Tijuana Donkey Show' does nothing for me. No I'm more of a Portland Pull Start kind of guy. And in case you're wondering:
This is best done on a fat girl you can trick into anal play. The great thing about the Portland pull-start is that all you need is a fat girl and some butt beads. The larger the beads, the larger the fun. Get her on all fours and get behind her. Insert all the beads very, very gently while playing with her fat vagina. Now place your left hand on the middle of her fat back while still holding onto the butt beads with your right and PULL START that bitch!! If you are wondering ‘Why the fat girl?’ It’s so you can get away.
It worked, you warned me off any thought of messin' with you in the future!
Lol...+1
If one were to donkey punch the said land whale, one could just stroll away.
So far three fat down voters have been on the receiving end of the pull start. :)
"Two very different ideas". Fuck, I'm as retarded as Cramer.
Cheerleaders. Not journalists.
Yeah, but at least Cramer warned us about Bear Stearns.
And he didn't have Valeant as a pick either.
"House of Pain"!
I guess it's good to have the facts to back up the impression. Everyone has known that cramer is a Jackwad for over a decade now. Hell, he lost his broker's license due to miscreant activities.
It's entertainment, not investment advice. He pushes his buttons and honks his horns, yells, shouts, howls and makes faces. Thats not sound advice. That's a halfwit doing a song and dance routine.
The only people surprised about this are the sheep and that tends to be ex post facto, but they'll line right up for another shearing as soon as possible......
The monkey throwing darts at a stock board does better at stock picking.
And works for bananas.
Yaaaa, I know that monkey. He can pull chicks too.
Finally, the professor gets educated.
first clue? "Mad" Money...silly stock loser didn't get the TRUE agenda memo for the show.
Had Money, with Jim Cramer!
Everyone knows you need short hair and a pony tail to pick stocks....
https://www.youtube.com/watch?v=BpLfOF4zZW0
Jon Stewart And Jim Cramer Face Off! Great WatchCramer needs a yellow star and a ticket to the gas chamber, asap
What idiot listens to Cramit anyway?
I recall Cramit reccing PXD at 190 or so. It balsted to 226 and is now 120-130 thre last time i checked.
His rec is the kiss of death and at most may be pumps n dumps. You pump Cramit's recs and he takes
a dump on your head!
Well wait a minute! Isn't that a 28% profit?
A 7.09% loss in just 6 months.
About the same as gold.
Sorry for the buzz-kill fellow doomers
Gold bugs dont like reality.
Yea I used to be like that.
Now back to your feel good Cramer bashing.
Over my adult lifetime, precious metals and real estate made me a small fortune and the stock market cost me money (esp., during the 2008 crash).
Coincidence.
No Serendipidious
Fair points. Certain asset classes do differently over different periods.
Im not selling my PM's (sadly they fell deep in the atlantic during a boating accident)
but rather ,its all time sensitive.
Cramer is a clown and shill for the Fed. ,but who (here) is surprised.
What if Cramer would of gotten "lucky" and his picks went up?
Would ZH of posted the piece?
It depends on what you are looking for in said reality. I like PM's, I like land that you can produce on....whether it be crops, animals, timber...... If I own it and protect it, I have control.
You don't have much control over something you don't hold.......like pm's in a vault or stock on an exchange, or fiat. That's paper.
I am confident any pm or land will hold out better over my timeline better than stawks. To each his own reality and comfort.
30% of the time you make money all of the time.
I'm here for pictures of hot bikini ass ads. Cramer is irrelevant.
Cramer is jew. Why do you expect honest advice from him???
From Wiki: Cramer was born to Jewish parents[4] in Wyndmoor, Pennsylvania, a suburb of Philadelphia.
https://en.wikipedia.org/wiki/Jim_Cramer
It's pretty clear Cramer wasn't following the U.S. department/apparel story very closely. Everyone in the space knew names like Kohl's, Macy's, Dillard's and Urban Outfitters were incredibly overvalued, with the department stores delivering two or three quarters of flat to declining sales and URBN at an absurd P/E of 28x right around April. I'm sure without those turds the results would be in line with the market's 4% loss over the same span.
i would have been better off asking "Dear Abby" or "Ann Landers" for stock tips... but they're both kikes too! where to turn?
For those who didn't actually read the full article and jumped on the prof...he essentially tried to "bet" Cramer that more than half of Cramer's picks would be wrong. Cramer never took him up on the bet.
The point was that the market is rigged against the Mom and Pop investors and that Cramer's advice is basically bunk.
The prof did a good job proving his point.
Exactly C Bob. The prof did not actually invest, that would have been stupid. Funny how many zh readers read the article as closely as college students do, at least the ones i flunk.
Buy and hold does not work and short term trading does not work and dollar cost averaging does not work and hedging does not work and the bull side is not working and the bear side is not working and, basically, nothing is working. It's simply very hard to make money in the markets, today. Cash and physical gold is my main play.
Stock market-wise, trading tactics, e.g., money management and timing of trade entries and exits, seems to be more critical to my performance than my market strategy or my views on the economy. When I am trading, short term, I find my market opinions are more likely to hurt me than help me.
However, longer term, it is critical to understand the fundamental economic risks. I keep those firmly in mind at all times which is why I've sharply limited my market exposure.
Summary: Market odds are against you...
special events are similar to the merger arbitrage plays of the 80s and early 90s
How did the rest of the cast of Gilligan's Island do?
http://www.thestreet.com/mad-money/index.html <- this is always worth a laugh.. Of course, he says buy KSS at 78 and sell at 50something. He has a triple F rating approaching Gartman levels. That's Flip Flop Frequency for all you home gamers.
Tis guy is not a idiot,he is a calculated operative,just watch this interview https://search.yahoo.com/yhs/search?p=CRAMER+ADMIDS&ei=UTF-8&hspart=mozi...
Crummer Cheerleading
Stupid is as stupid does.
Does Cramer actually do any analysis before he throws out names? I wouldn't consider buying most of those stocks for very simple reasons:
AutoNation: No dividend.
AutoZone: No dividend.
CarMax: No dividend.
Cracker Barrel: Too expensive.
Costco: Too expensive.
CVS: Too expensive.
Darden: Too expensive.
Dillard's: This one looks good.
Dick's: This one looks good.
Dollar Tree: Too expensive.
He needs to start listening to the trading desks of Gold Sachs & JP. They had a 100% record on their picks last year. Not the ones that they recommended to their customers, mind you, only the trades in their "in house" accounts. I'm not a statistician, but what would that be like, what, 10 standard deviations?
What a joke!
jim cramer's the algo everyone is looking for ... the one that tells you where you shouldn't invest !
BREAKING NEWS. Michael J Fox arrested for insider sports betting. LOL
http://stubhillnews.com/2015/10/21/michael-j-fox-arrested/
It all depends on what your definition of "loss" is...
-Argenta
The only reason shows like Cramers exist is to "market" stocks to idiots.
hes a corporate puppet there to push equities onto the public so that these Ponzi corporations can remain liquid.
How fitting that his name is cramer, when all he does is cram garbage into peoples portfolios lol
Could'a told you that more than a decade ago when I rant the same thing.....trounced Crapper -25 vs +106%....same time frame...
Hey did you hear the one about the Professor who got fucked ha ha ha its a kicker!
Stock picks from the bully pulpit are more likely talking your book than an actual pick...always.
So, you have to ask yourself, "Is this guy counting on me to buy it so he can get out?" OR "Is this guy putting, and looking for his listeners to hit his strike price?" Or "Is this guy shorting, and looking for the inevitable dip that will follow the blip his followers will make?"
I thought it was common knowledge that Cramer is a short portfolio, not a long.
All reported financial returns should be risk-adjusted. Gold is low beta compared to stocks, yet you see people in the press describe gold as volatile and dangerous and stocks as prudent and conservative. Backwards...
the winners are in 1/3 of all picks, and the median loss is around 10%. to be fair to Cramer, which is not my desire or intent, we should say this is not a stockpickers markeet. losses roughly twice what the index suffered is probably not unusual, but Cramer took a pretty big bite, 50 stocks (buy a big enough bite and you have the index) and it may be that next year this time he is above water, but its pretty clear at this point that he can't do better than indexing.
I'm too lazy to actually continue, but I ran the initial handful of quotes to check the current price... and they're currently markedly higher. I'd be interested to see how this panned out had it actually been a year...
I'm not defending Cramer by any stretch, but I do tend to believe that people assess returns over a longer time frame... at least a year!
Like even after today. Also not defending cram er, but cherry picked dates can yield greatly different outcomes.
As much as I disbelieve stockpickers, I immediately question how the market indexes performed over the subject period. Was this a strong underperform? Slight underperform? I know Cramer is quoted saying perfectly suited for this environment, but I still want the context.
When questioned about the negative 7% performance, Crammer was heard to say "I can lose more than 72% next time. I can do better!"
Why is anyone even talking about Cramer? Just because he's on teevee?? The guy is a complete asshole . . . and an incompetent one at that!
Asshole, he is...
How this guy got his own show is beyond me. I'd do better throwing a dart at the WSJ
B/c he's in the club, plain and simple. The point of his show is NOT to make you money, it's about ratings and keeping the sheep interested in a phony, rigged market.
This retard professor has nothing better to do with his taxpayer funded pension than blindly follow a "market guru?" Ten minutes of searching will show what a phony and fraud Cramer is. I just wish he got wiped out. That would have been even funnier.
I didn't know Cramer was jewish.... it all makes sense now
Did you really think he got the job on his 'abilities'?
...er.
How does anyone give any credence to this dickhead's stock picks?
Many years ago the Irish Independent at the beginning of every year threw a dart at the Irish Stock Exchange listing, 'selecting' 20 stocks. At the end of the year the 'portfolio' was was compared to those of the experts. Invariably the random dart thrower finished better.
"In the long run......"
He did it to prove a point... any idiot can recommend a stock.
Big deal. I'm not a fan of Cramer, but unless you're a trader, the time period is relatively short. The S&P 500 is down about -6% and GLD is down over -7% same time period.
Creamed with Cramer ..... Had Money..... Buy ! Buy !! Buy !!! Forgot to tell you---Buy Puts
Sell, Sell, Sell!!!!
He followed Jim Cramer and he is a professor in fiance. What the bloody fuck!!??
Jim Cramer works for banks and big corporations to off load their junk shits.
THIS FUCKING ARSEWHOLE NEEDS A LAMPOST if he's defrauded his followers, you idiot "investors" got what u deserve
BOOYA!
someone should start a jim cramer INVERSE ETF
leveered options on all of his picks in reverse lol
Anybody believe in Kramer's?? Need to be checked in Asylum..
Heh. I have to laugh.