Boo-yah! Barron’s is Shorting Cramer

There have been rumors circulating that a major media source was going to pull a hatchet job on JC.

Well, it turns out to be only partly true. Jim Cramer is the subject of this weeks Barron’s cover story: Shorting Cramer. While I would surmise he isn’t thrilled with the coverage, he shouldn’t be all that perturbed. 

In our day, we’ve seen some media hatchet jobs. All things considered, this was a relatively mild ctitique.

The ever popular Ubiq-cerpt:™

"THANKS TO HIS NIGHTLY CNBC SHOW Mad Money, Jim Cramer has become the chief cheerleader for the bull market, or what was the bull market until a few weeks ago. Last spring, he was giddily exhorting the Dow Jones Industrial Average toward 15,000, with no troubles in sight. Earlier this month, as the Dow tumbled in the direction of 13,000, he had an on-air meltdown, complete with screaming, sobs and predictions of financial doom. The clip quickly made the rounds on YouTube. Friday, after the Fed cut the discount rate, he said that the Dow’s run to 14,500 had begun. With dramatic pronouncements like that, it’s no wonder that more than 100,000 viewers tune in each weeknight for his antic mashup of sound effects, Streetwise advice and stock picks.

It’s those stock picks that caught our attention. Cramer, by all accounts, had a stellar career as a hedge-fund manager. And he is held out by CNBC as the guy who can help viewers make big money. But a comprehensive and careful review of his stock picks by Barron’s finds that his picks haven’t beaten the market. Over the past two years, viewers holding Cramer’s stocks would be up 12% while the Dow rose 22% and the S&P 500 16%, according to a record of 1,300 of the CNBC star’s Buy recommendations compiled by, a Website run by a retired stock analyst and loyal Cramer-watcher."

The Barron’s article included two charts. The one analyzing Cramer’s 3458+ stock picks (see 2nd chart below) was not the one that really mattered to me.

Rather, it was the chart of (TSCM) itself.

I first mentioned TSCM’s stock as a buy back on November 15, 2004 and then again on February 06, 2006 and yet again on April 26, 2006.

Since that first mention, the stock price has since tripled . . .


click for bigger graphs






Update: August 22, 2007 10:21am

This has now been moved to the free MSN site . . .

Jim Cramer’s bad bets


Shorting Cramer
The Cramer Effect — and Defect
Barron’s, August 20, 2007

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What's been said:

Discussions found on the web:
  1. Bucky Katt commented on Aug 18

    Bloomberg had a story regarding how it was he, Cramer, that forced the FED into action. After his head stopped swelling, he recanted his importance in the Fed action.

    Aug. 17 (Bloomberg) — Jim Cramer, the CNBC television host who led the howls for the Federal Reserve to cut interest rates, got his wish today.

    “They obviously heard us, they acted,” he said on the air. “This is the beginning of the run to 14,500.”

    The Fed lowered the interest rate on loans to banks by 0.5 percentage point, to 5.75 percent. The surprise action came after weeks of debate between investors looking for looser credit and economists who argued that a rate cut could hasten inflation.

    “It’s a brilliant move by the Fed,” Cramer said. “Two weeks ago when I had my talk with you, they were doing the exact opposite.” On his show “Mad Money” this afternoon, he applauded himself again, saying “I love to say I told you so,” adding later, “I think I nailed it.”

    The idea that Cramer or anyone else outside of the Fed would take credit for the Fed’s action struck some economists as chutzpah.

  2. Marcus Aurelius commented on Aug 18

    I watched the video. I’ve seen two year olds throw similar tantrums. Cramer needs a time out – he’s overwrought.

    Wonder what he’ll do next week.

  3. spencer commented on Aug 18

    3,458 stock picks over three years works out to be something like 9 or 10 per day. If you have any faith in market efficiency, even the very weak case, how can you possibly think it is anywhere remotely possible for anyone to be smarter than everyone else in the market up to 10 times a day.

  4. Barry Ritholtz commented on Aug 18


    Thats a pretty fair assessment

    (Good article, too)

  5. Socalcool commented on Aug 18

    I really don’t understand why everyone is so worked up over Cramer. His ‘melt down’ was necessary and I think he literally ‘saved the day’ by making all of the other idiots at least come to terms with market realities. Let’s face it, he had some brass balls to do what he did, especially since he had down played the entire mortgage mess a week earlier. I don’t think people understand the guy. If you follow what he says, and ‘do your homework’, you can make a lot of money. He explains very thoroughly that all his picks are caveated with certain assumptions. If you don’t understand that, than frankly you need to get another day job. Don’t get me wrong, the guy rubs everyone the wrong way sometimes, but that’s no reason to try and beat him up. And yes, you better believe that Bernanke et al listened. How you like it if some monkey told the public exactly what you knew had to be done a week in advance. The FED still doesn’t get it; Kudlow is right. This is a banking crisis…

  6. jake commented on Aug 18

    in media there’s no such thing as bad publicity…lol i bet he loves it…he probably bought out all the issues at the newstand in his town lol

  7. AD commented on Aug 18

    I especially liked the graphic where we learn that Cramer has been selling his shares in all the way up…but he is for the little guy…right?

  8. Barry Ritholtz commented on Aug 18

    He sells it via a specific program —

    he’s the biggest shareholder, and dumping $4.6 million out of $100 is no big deal

  9. Norman commented on Aug 18

    I’ve noticed the paucity of rigorous ore really any kind of analysis of Barron’s’ own stock picks plus those of their ‘experts’.

    I’ve done some of my own analysis and found that they aren’t that good. You only need to go back to 2000 or 2001 (I think)when the ‘brains’ including Abbey Joseph Cohen (how does she keep her job?) predicted the S&P 500 would be up 30% and instead it was down 20%.

  10. Winston Munn commented on Aug 18

    I really don’t grasp the Cramer bashing. Television is primarily an entertainment vehicle, and Cramer’s show is no exception.

    To follow his advice on investing is like watching the Jerry Springer show for marriage counseling.

  11. David commented on Aug 18

    Jim Cramer is the new clown in the theatre of financial journalism. His clowning is an important performative device, for his words embodies the crude hedonistic
    qualities which make the clown figure so appealing.

    He is CNBC first court jester, for they know that beneath every viewer there lurks a coarse anarchistic soul. Cramer as the clown fit into the hodge podge of viewer from Bears to Bulls.

    Cramer, who is more sophisticated than the carnival barker, still retains many of these qualities. As the jester, joker, or court buffoon, Cramer is not entirely immune from being fired, he lack of judgement in mocking of Bernanke and saying that he (Cramer) control reigns of the financial markets; Cramer has over-reached himself and insulted too many influential financial people.

    Cramer made Bernanke look like a fool and played him like a fiddle.

    King James had a famous jester named Archibald Armstrong, who was fired as he became more intolerable by mocking and manipulating the king.

    So, as William Shakespeare said, “All the world ‘s a stage, and all the men and women merely players. They have their exits and their entrances; And one man in his time plays many parts”.

    Cramer the clown, has become the Fed Chairmann and Bernanke has become his clown.

  12. Stuart commented on Aug 18

    The fact remains, people watch him and are interested in listening to what he says. I think he’s an idiot but that doesn’t stop alot of others who follow him. Look at all the press he’s getting and all the advertising for CNBC amongst others. Like him or hate him, the media is attracted to him.

    It’s quite simple. If people truly can’t stand him, stop watching his show, stop discussing him, and stop publishing articles about him. Ignore him, and he’ll go away.

  13. dukeb commented on Aug 18

    I watched a video of Crazy JC with his *ss kisser sidekick James A. once again talking about the infamous hedge fund days. Crazy JC said that if a prospect came for an interview, he’d ask for 5 investment ideas and give them 2 days to pan out successfully or he’d never consider the person. Kind of appropriate since Crazy JC’s investment ideas tend to be good for no more than 2 days.

  14. Werner Merthens commented on Aug 18

    The first time I saw Cramer on TV, I wondered whether CNBC picks him up from the lunatic asylum just prior to putting him on TV and duly return him afterwards.

    But then again, the guy is probably a shrewd operator. The makes a mint from providing ‘tools and services’ to the many hapless retail speculators out there.

    I have a sneaking suspicion that none of those ‘tools and services’ gives them any edge.

  15. F. Frederson commented on Aug 18

    All of CNBC is a pump-and-dump operation. Cramer is merely the most blatent operator.

  16. Eclectic commented on Aug 18

    Anyone is welcome to their opinion, but mine is that Cramer top-ticked Fed policy. You may say it was coincidental or you may agree with me that it was the initial demonstrative representation of Wall Street’s impassioned request to Bernanke and Poole… but it was the actual precise moment that the whole comportment of The FOMC c-h-a-n-g-e-d.

    He expressed a level of crisis that just days later played out as the very crisis he evoked. I also accept him at his word that his primary motivation was a recognition of events rapidly spinning out of control for the economy. That some of his friends in investment banking might have their situations improved by Fed actions was probably agreeable enough as a secondary objective, but it wasn’t his first objective. His first objective was to be the first beam of light from a lighthouse near a rocky shore.

    Too, I find it hard to believe that anyone could accurately evaluate Cramer’s recommendations, and furthermore, without the constraints of measuring them accurately, he’d otherwise be free to act on his own and possibly to do it non-proportionally. That is – to lose 10% on 100 shares of some stock is not the equivalent of making 10% on 1 million shares of another stock.

  17. Sterling commented on Aug 18

    I quit watching Cramer in May 2005, about two months after his show debuted in March of that year. He got on the air one night and said the Fed was “determined” to “destroy” the economy and the housing market. He offered no evidence for this hypthesis, no reasonable motivation for why the Fed would want a “destroyed” economy or housing market, and then blamed Greenspan for chasing phantom inflation (when in fact, Greenspan was merely very timidly and belatedly trying to remove the overly accomodative rates). I wondered why Cramer was making such hyperbolic and incendiary remarks about Greenspan and the FOMC’s rather dovish (if anything) actions, then I recalled how Cramer had been pumping the home builders since his show debuted two months before, and his advice was looking really, really bad. Ironically, a few weeks after his outburst and changing his home builder calls to SELL, Toll Brothers reported blowout earnings, followed by KBH and all the others. A few days later Cramer went back to BUY on homebuilders, that was in June/July of 2005. Great timing there Jim, buying at the absolute top of that market. Much like his telecom and CLEC BUY calls throughout 1999.

    As a result, I sometimes use Cramer as a good contra indicator, because there’s lots of times when he capitulates and switches to a SELL call on a stock, or even a HOLD on one he had been pumping up in a feverish way for awhile, and then like magic those stocks will start to bottom out not long after. Unless, of course, it involves one of his buddies like Eddie Lampert, then no matter how far it drops he tells the world it’s time to double up on a loser and buy even more. He talks up his book under the guise of trying to help the common man, quite a clever strategy.

    He also did himself no favors early last November when he got on FSN’s Best Damn Sports Show and predicted Andy Reid would be fired as Eagles head coach after the season ended and would be doing NutriSystem commericals in 2007. Starting the very next Sunday the Eagles went on a winning streak, closing the season winning 6 of 7 and winning their division. Like I said, Cramer’s got impeccable timing as a contra-indicator.

    CNBC should require him to wear buckle boots with bells on them, so everyone can hear the court jester coming before he opens his big, whiney, Philly piehole.

  18. CDizzle commented on Aug 18

    Cramer does what he does to make friends and to make himself money. Anyone who ran a hedge fund for as long as he did as successfully as he did is interested in WINNING. He has changed the rules of his game, and he’s definitely winning.

    Anyone who has his track record is worth listening to, for a time. It’s clear to me that Cramer, like 95%+ of America, kept up with his denial pills until such time that it made sense not to. The side effect from removing his head from the sand was the infamous diatribe and subsequent conversion to Socialist.

    As for me, I still favor free markets. What the Fed did yesterday (regardless of ‘why’) will not impact the long term fate of the American economy. It also won’t make it any easier for anyone to pay their mortgage.

  19. John F. commented on Aug 18

    Buying a stock based on a 2-second electrical storm in Cramer’s brain is dumb, but TV makes people do lots of dumb things: ginsu knives, self-help kits, Jackass stunts, etc. ad nauseum. And the comment about TSCM is a cheap shot: more than half of CNBC’s “guests” are there to promote a stock, a fund, or a firm. Speaking of which, can we see a graph of your AUM against number of appearances on CNBC? Mind you, I have no problem with any of it. Even if you aren’t of the “buyer beware” school, we have a public in this country that is far more savvy and skeptical about matters financial than just about anywhere else. As dismal as finance-o-tainment can be (and in so many ways), society is–on balance–better off for it.

  20. dukeb commented on Aug 18

    Anybody remember the rumor-monger Dan Dorfman’s “The Dorfman Report” segments on CNBC? Why do I get the feeling Crazy JC made a case-study out of that the way Ben B supposedly made one out of The Great Depression?

  21. Putsome commented on Aug 18

    The rise of a stock market buffoon into public prominence is the sign of a top.

  22. speedlet commented on Aug 18

    It’s absurd to think that Jim Cramer had any influence whatsoever over the Fed.

    If anything, he probably made it a little more difficult for them to cut rates because they might be seen as capitulating to some maniac on TV.

    The people who influence the Fed don’t do it by throwing chairs on TV. The people who influence the Fed do it very quietly, behind closed doors, with a few well-chosen words. The phone call comes from the big money-center banks, or from the Oval Office. That’s who the Fed Chairman listens to (or ignores, if he has the will). Not game-show hosts.

    If anyone is interested in how the Fed really works, as opposed to absurd speculation, read “Secrets of the Temple” by William Greider. It deals with the Volcker Fed in the 1980’s, which was, if anything, a more embattled Fed than right now.

  23. klaatu commented on Aug 18

    Just because something happens on television doesn’t make it important.

  24. Observer#1 commented on Aug 18

    He has very many valuable insights. But just remember one thing, he is a very shrewd business man. The manner in which he does things are reflective of that. He may look at Coach, and sees they’re able to sell a purse for $400! He values his info/ego as much, and more, and does things in a way that gets him his $400 at the end.

  25. Groty commented on Aug 18

    Cramer is witty, funny, and his antics are perfect for TV. I find his on camera hyperbolic statements annoying, but it works for him.

    In any case, I admire his general business skills more than his trading/investing skills. He’s made a fortune with TSCM. His books appear to sell well. And CNBC pays him to host a cable network program in which he never misses an opportunity to promote his books or to promote the stocks in his charitable trust.

    Given his business skills, I’ve long wondered if he gets a cut from the sale of the bobblehead dolls, Mad Money coffee cups, the foam bulls and bears, and other trinkets.

  26. Sterling commented on Aug 18


    You are so right, “Secrets of the Temple” is a great book for someone who wants to get an introduction into the world of central banking. It’s a long book, very detailed, and can be a heavy read in some chapters because the reader has to keep up with so many different names and the positions they held, but it really reveals how the Fed makes their decisions and why secrecy and timing of announcements are paramount for monetary policymakers. Friday was a prime example of this. You are also right that Paul Volcker’s Fed was far more embattled in the late 70’s/early 80’s than the Bernanke Fed, thus far.

    Another very good book that relates to Friday’s Fed actions is a biography of Alan Greenspan called “Alan Shrugged”. Of particular note is a chapter that deals with the lessons Greenspan learned early on watching his mentor Arthur Burns thoroughly screw up monetary policy in 1971/72 by flooding the banking system with liquidity at the request of Nixon and his team so the economy would seem rosy for the 1972 election. Burns warned Nixon that there would be a price to pay afterwards in the form of high inflation, but the decision was made to play it loose and worry about the future later on. Supposedly Greenspan was very disillusioned that Burns would essentially sell-out his credentials and economic philosophies to stay in good favor with the President who held his fate over whether to reappoint him after the election. Ironic, since Greenspan engaged in very similar practices later on in his own career to hang on to his job.

    Bernanke wouldn’t listen to Cramer regarding monetary policy anymore than Bill Belichik would let the waterboy tell him what play to run on 4th and 2 from the 38 yard line, down by 3, with 45 seconds to go in the Super Bowl. Bernanke didn’t just get dropped out of a helicopter to become Fed Chairman, he actually worked his way up to that position, and beat out some highly regarded men to receive the appointment. Something tells me Bernanke has forgotten more about banking and finance than a clown whose face turns bright red and looks like he’s about to have a heartattack when he talks about Bear Sterns conference calls. Wonder if that “charitable trust” has any provisions for college scholarships for children related to a certain stock picking media personality? No, surely not, it must be for more altruistic purposes.

    Cramer acts like the village idiot of Wall Street, and whatever shred of credibility he still retained simply evaporated when he made himself the laughing stock of the financial world with his meltdown. It won’t matter for his career anyway, because after the Fox/WSJ channel goes on the air in October he will likely sink even further into irrelevancy.

  27. Aaron commented on Aug 18

    I watch Cramer sometimes, and I admit, it does bother me how he goes on about the Fed and Bernanke. I think he takes it way too far. Also, as Barry says in this post, its interesting to look at the TSCM chart and how it has risen since Mad Money became so popular.

  28. Supercoug commented on Aug 19

    Like Cramer or not, where is there a better place for the novice investor to learn about the stock market?

  29. Sheeple Investment Co. commented on Aug 19

    Can I just say, I received this email from Schwab, and, though I didn’t try to do anything on the 16th, this is the stupidest letter I have EVER received.

    On August 16, you may have experienced difficulty accessing Schwab online or through our phone centers as a result of our systems slowdown. We want to apologize and let you know what happened.

    In the process of expanding system capacity earlier that morning, a systems slowdown occurred. As a result, if you tried to access Schwab online or via the phone, you may have experienced slower-than-normal service, or in some cases, may have been unable to access our services at all.

    If you had difficulty accessing your account that you would like to discuss with a Schwab representative, please call 1-800-577-5722. We are committed to providing you the highest level of service, and we sincerely apologize for the trouble this may have caused you.

    In the process of expanding, you may have found that you couldn’t do anything by computer or phone. What a bunch of losers

    Sorry…anyway…Cramer…ordinarily I don’t like him, but there was something “real” about his tirade. I realize it made him a laughing stock, but the credit market was seizing up when he did that and no one was believing it. Now I can go back to not liking him.

  30. VJ commented on Aug 19


    You only need to go back to 2000 or 2001 (I think)when the ‘brains’ including Abbey Joseph Cohen (how does she keep her job?) predicted the S&P 500 would be up 30% and instead it was down 20%.

    Ah, yes. If I hear Abby say “going forward” one more time, I might pull an Elvis and shoot out the TV. Anyway, she was in good company:

    * October 1999: James Glassman, author Dow 36,000

    “What is dangerous is for Americans not to be in the market. We’re going to reach a point where stocks are correctly priced, and we think that’s 36,000 … It’s not a bubble. Far from it. The stock market is undervalued.” (Another one that belongs in the Cracker Jacks box with Larry Kudlow, Jim Cramer, and Stephen Moore)

    * December 1999: Joseph Battipaglia, market analyst

    “Some fear a burst Internet bubble, but our analysis shows that Internet companies account for only 7% of the overall Nasdaq market cap but carry expected long-term growth rates twice those of other rapidly growing segments within tech.” (The Internet Index lost two-thirds of it’s value in the next six months)

    * December 2000: Jeffrey Applegate, Lehman strategist

    “The bulk of the correction is behind us, so now is the time to be offensive, not defensive.” (The bulk of the correction was to come)

    * December 2000: Alan Greenspan, Fed Chairman

    “The three-to-five year earnings projections of more than a thousand analysts, though exhibiting some signs of flattening in recent months, have generally held firm. Such expectations, should they persist, bode well for continued capital deepening and sustained growth.” (Another in a long string of great calls by Greenie)

    * January 2001: Suze Orman, financial guru

    “In the low 60s here, I think the QQQ, they’re a buy. They may go down, but if you dollar-cost average, where you put money every single month into them, I think, in the long run, it’s the way to play the Nasdaq.” (The QQQ fell an additional 60% further)

    * April 2001: Abby Joseph Cohen, Goldman Sachs

    “The time to be nervous was a year ago. The S&P then was overvalued, it’s now undervalued.” (The S&P continued down for another six years)


  31. Mediamania commented on Aug 19

    I always read so many people bashing Cramer …yet I have watched hundreds of his shows and have personally never seen or heard of a caller being negative to Cramer on the air. This begs the question…are the callers plants…or is the show delayed and edited? The first caller always seems to ask an intelligent question directly related to the show’s open.

  32. stockTagger commented on Aug 19

    Cramer is a tool that investor’s/active traders should use with care. Measuring aggregate performance is a fool’s game because of the enormous amount of picks Cramer is making on the show. Cramer needs some defending on some of his better picks. For example, despite being reviled for pushing Jones Soda stock from 10 to 30 back to 10, his record could have made you 90%. See the performance here –

  33. hc commented on Aug 20

    Cramer is the master of spin–I have watched his self back slapping show many times over the last couple of years. He always is the first to say he was right and then sheepishly mentions that he is wrong occasionally.

    I do not find him to be very bright. Yes, he has memorized many stocks but thats about it. He rarely understands the fundamentals behind waht creates value. He is entertaining and his conviction when discussing topics is great. I watched one evening when he said sell RIMM and buy PALM–a few months later–buy RIMM, sell PALM–hilarious

  34. hc commented on Aug 20

    Further, I understand his charitable action alerts plus fund has been an underperformer as well. Im not sure how JC would spin that but you can rest assured that if it were doing better than the market, he’d be telling you nightly.

  35. jdc commented on Aug 21

    Cramer’s made me a lot of cash. None of you have ever made me a dime. Long live Cramer

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