Yesterday, I watched Jim Cramer’s Mad Money show on CNBC for the first time. I found him very entertaining and enjoyed his (admittedly nutzo) method of dispensing investment advice.
My question is: does he really know what he’s talking about or is he just another clown with a gimmick?
I think he’s a clown with a gimmick and a good research service.
One part of what makes a TV analyst “right” is self-fulfilling prophecy. Cramer’s got a following who may act on his advice. Consequently, the stock is going to do what he says because he’s telling people to act in a way that’ll make the stock do what he says it’s going to do. The stock market is based partly on economics and largely on human behavior, and I think he exploits that second part rather well. What he offers is generic advice based on his own preferences.
My stepfather-in-law likes this fruit loop and watches the show daily and takes careful notes on what Cramer says to do; for all I know, he does it. I don’t care for the show and wouldn’t take financial advice from a TV host, but it’s not my money that’s being invested.
Robin