This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Kass: Defending Cramer (Part Deux)

As I have defended Jim Cramer from attacks by the media in the past, I will do so again today, hopefully as an impartial and independent observer.

My basic point has been that, above any other media pundit, Jim provides a value-added educational experience for the average individual investor.

He does this in several ways:

  • He goes belly-to-belly with company managements on "Mad Money." He typically doesn't serve up the easy pitch but rather usually goes to the root of the valuation/fundamental controversy.
  • His lightning rounds give his quick and abridged impression of a stock's outlook.
  • He develops investment themes and strategies that are easily understood and developed reasonably well on "Mad Money" and in his books.
  • Most important, on "Mad Money" he provides an educational handbook on how to analyze a company/sector, with a focus on the development of the principal determinants of future stock market behavior.

Jim qualifies almost every investment recommendation with the caveat that investors should not take, prima facie, his word on a stock. He says that every investor has an obligation to do his own homework.

Jim qualifies almost every investment recommendation with another caveat: Don't buy on the spike or strength following his mention. Wait until things calm down, he says.

As to potential leaks, that is an occupational hazard if one is going to carefully research an idea and cover multiple sources. A more comprehensive research approach by "Mad Money" staff is far more preferable than superficial preparation. The same phenomenon occurs in Barron's, the source of this weekend's criticism, as trading desks often "hear" about rumors of Barron's cover stories. Most are specious, but now and again, they are accurate.

The Barron's article analyzes "650-odd" Cramer recommendations and concludes that "his bullish picks underperformed the S&P by about 3.5 percentage points over the 45 trading days after each show."

To that, my response is, So what? Not only is the statistical error broad vis-à-vis the underperformance and the degree of underperformance modest within the context of the volume of recommendations but this analysis presumes a buy/hold strategy, which, particularly in today's volatile times, is plain silly and not the intention that Jim necessarily recommends.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ABT $38.90 0.00%
BMY $72.18 0.00%
BP $33.58 0.00%
COP $47.79 0.00%
GILD $88.21 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs