Jim Cramer's Stock Picks Don't Measure UP

[Nbadan]

The usually exuberant, uber-conservative finanicial GURU with the squeely voice who recently had a on-air melt-down about the ongoing subprime and commercial loan crisis has been under-performing the markets for 2 years running...



NEW YORK (Reuters) - Jim Cramer's stock picks on his nightly CNBC show "Mad Money" haven't beaten the market over the past two years, according to an article in the August 20 edition of Barron's.

Over that period, Cramer's stocks rose 12 percent, compared with a 22 percent rise in the Dow Jones industrial average and a 16 percent rise in the Standard & Poor's 500 index, Barron's said.

The data is based on a record of 1,300 of the CNBC star's buy recommendations compiled by YourMoneyWatch.com, a Web site run by a retired stock analyst and loyal Cramer-watcher, said the report.

Yahoooo (http://news.yahoo.com/s/nm/20070819/bs_nm/cramer_barrons_dc)

All these supposed financial GURUs on Conservative radio, including Cramer and Dave Ramsey are frauds....Ramsey regularly dispenses advice to cash-strapped consumers that is detrimental to their financial positions but very good for banks and credit card companies...he calls it 'taking personal responsibility - hummm...I wonder what he calls the FEDS bailing-out speculators who have raped our medical, infrastructure, and now want to shove toll-roads down our collective throats?...

[Holt's Cat]

Cramer is a "conservative"?

[Wild Cobra]

Cramer is a "conservative"?
I don't know who he is well enough, so I don't have an valid opinion. However, if he is conservative with stocks, then he plays the less risky lower yield types.

[Nbadan]

Anyone with any financial sense could see this liquidation crisis coming from a mile away, even I have been writing about it for at least a year now, but Cramer kept encouraging his listeners to pump more money into a stock market frought with dangerous pitfalls, never signaling trouble ahead, and now he's acting like this crisis just materialized out of no-where, what a fraud....

[boutons_]

"liquidation crisis"

do you mean liquidity? that's the crisis the central banks are attacking by pumping 10s of $Bs into the system. Liquidity crisis as in:

Businesses Pinched as Loan Spigot Shuts Off
By David Cho and Thomas Heath
Washington Post Staff Writers
Monday, August 20, 2007; A01


U.S. corporations for years operated by the maxim that you have to borrow money to make money. Now, the well of cheap loans is running dry.

The corporate bond market, the MasterCard (http://www.washingtonpost.com/ac2/related/topic/MasterCard+Inc.?tid=informline) for U.S. companies, has slowed to levels not seen since the recession of the early 1990s, as rising defaults among mortgage borrowers are causing lenders to question loans going to companies as well.

Without a healthy bond market, a swath of corporate activity is eliminated and the economy slows down. Firms stop borrowing to buy drilling equipment for coal mines, plants for manufacturing cars and land for expanding restaurant chains.

"It affects everything," Michael Tarsala, an analyst for Thomson Squawk Box, said of the bond market. "It's access to capital. It's the lifeblood of a lot of big S&P companies. . . . They've been encouraged to borrow money to make money for so long, and now the spigot's suddenly been shut off."

Shares of Hertz dropped 6 percent last week after concerns that it will struggle to get low-rate loans, the key source of financing for rental-fleet purchases.

Farm-equipment maker Deere & Co. (http://financial.washingtonpost.com/custom/wpost/html-qcn.asp?dispnav=business&mwpage=qcn&symb=DE&nav=el) said last week that it is "putting the brakes" on production of construction vehicles.

Mortgage giant Countrywide Financial (http://financial.washingtonpost.com/custom/wpost/html-qcn.asp?dispnav=business&mwpage=qcn&symb=CFC&nav=el) on Thursday had to tap its entire $11.3 billion emergency funding line after it could not get short-term loans, known as "commercial paper," from the bond markets.

Home Depot (http://financial.washingtonpost.com/custom/wpost/html-qcn.asp?dispnav=business&mwpage=qcn&symb=HD&nav=el) is rethinking a plan to borrow money to buy back $22 billion worth of its stock. The turmoil in the debt markets might also scuttle the $10.3 billion sale of its wholesale supply business.

Six years ago, a similar scenario played out when business spending ground to a halt during a recession. Factory floors went idle. The markets dropped about 600 points in August 2001. But consumer spending stayed strong and pulled the economy through.

This time, declining home values are leaving many consumers feeling less wealthy. They might not have enough cash to make up for a loss in business spending.

"Corporate earnings and corporate balance sheets are strong; that's the good news," said John Delaney of CapitalSource (http://financial.washingtonpost.com/custom/wpost/html-qcn.asp?dispnav=business&mwpage=qcn&symb=CSE&nav=el), a Chevy Chase (http://www.washingtonpost.com/ac2/related/topic/Chevy+Chase?tid=informline) lender to medium-size businesses. "What effect the current mortgage market will have on the consumer is the open question."

The summer tends to be a slow time for bonds. But it usually is not this bad: There were fewer corporate bond deals in July than in any month since December 1990, according to Thomson Financial.

The seizure of the corporate bond market might be temporary and is not necessarily a sign of recession. On Friday, the market enjoyed some relief. Several big firms, including Johnson & Johnson (http://financial.washingtonpost.com/custom/wpost/html-qcn.asp?dispnav=business&mwpage=qcn&symb=JNJ&nav=el) and Wal-Mart (http://www.washingtonpost.com/ac2/related/topic/Wal-Mart+Stores+Inc.?tid=informline), announced multibillion-dollar bond deals, jumping on market optimism from the Federal Reserve (http://www.washingtonpost.com/ac2/related/topic/U.S.+Federal+Reserve?tid=informline)'s surprise decision to cut its lending rate for banks.

Yet some economists worry that a prolonged slowdown in the bond markets would damage company earnings, which have been the lone bright spot in the worsening credit crunch.

"Main Street needs Wall Street (http://www.washingtonpost.com/ac2/related/topic/Wall+Street?tid=informline). Main Street produces the real stuff in the economy, but ultimately that's financed through Wall Street," said David Rosenberg, Merrill Lynch (http://financial.washingtonpost.com/custom/wpost/html-qcn.asp?dispnav=business&mwpage=qcn&symb=MER&nav=el)'s chief economist for North America (http://www.washingtonpost.com/ac2/related/topic/North+America?tid=informline). "The question remains: Who will provide credit to the economy?"

A prolonged credit crunch could also spoil some bond deals in the works. According to Dealogic (http://www.washingtonpost.com/ac2/related/topic/Dealogic+Holdings+plc?tid=informline), a research firm, corporations have withdrawn at least $60 billion worth of bond offerings since late June because no one would fund them at low rates. That figure probably represents just a fraction of the loans pulled off the bond markets but never officially announced, an analyst from the firm said.

Quebecor Media, the Canadian media giant that owns the Toronto Sun and a television station in Montreal (http://www.washingtonpost.com/ac2/related/topic/Montreal?tid=informline), canceled a $750 million debt offering last month after the bond markets started going haywire.

"We were going to the markets. . . . We would get capital at a very, very low cost," said Luc Lavoie, executive vice president at Quebecor Inc., the holding company for Quebecor Media. "We were more in the process of building a war chest more than anything else. We went to the market, and the market was backfiring that very week. It started going up, up, up. We said, the hell with it. We didn't need it."

Some Washington financial companies are also feeling the pinch in the credit markets. Malon Wilkus, chairman and chief executive of Bethesda (http://www.washingtonpost.com/ac2/related/topic/Bethesda?tid=informline)-based American Capital (http://www.washingtonpost.com/ac2/related/topic/American+Capital+Strategies+Ltd.?tid=informline), said the company sold $338 million, or only about 70 percent, of the $500 million in corporate debt it wanted to place last month.

Wilkus said investors are demanding a higher rate of return on their corporate bonds. "We cleared a little less in this offering than we normally clear," he said. "There definitely was pushback. The market is more demanding."

The problems in the corporate bonds market began when the market for high-yield junk bonds, which are loans given to companies with poor or short financial histories, closed down early in the summer, a spillover from the mortgage mess. As Wall Street's credit problems worsened, panic gripped the markets and other parts of the bond market began to stall.

The market for investment-grade bonds -- or money lent to companies with great credit -- has virtually stopped for the past few weeks. Only companies with credit as good as the U.S. government, such as General Electric (http://financial.washingtonpost.com/custom/wpost/html-qcn.asp?dispnav=business&mwpage=qcn&symb=GE&nav=el), have been able to get low-rate loans from the bond market.

If consumer spending drops, these companies could be hit by a double-whammy -- less money coming in through the cash register and no place to go for low-rate loans.

( so watch consumer spending reports in the next weeks and months)


Several bond traders and company executives said in interviews that there was still a lot of fear in the markets, but that the problems should work themselves out in the fall.

If not, it could be a very harsh winter for corporate America.

"If corporations have to postpone their borrowing, it can have real economic effects," said Michael Decker, head of research at the Securities Industry and Financial Markets Association (http://www.washingtonpost.com/ac2/related/topic/Securities+Industry+and+Financial+Markets+Associat ion?tid=informline). "That's new investment that might get canceled, acquisitions that aren't happening, and real economic activity that might not take place."

[smeagol]

Cramer is not uber-conservative.

[Switchman]

Ramsey is the man.

But carry on, Conservatives are evil :sleep :sleep :sleep

[Nbadan]

Ramsey is the man.

But carry on, Conservatives are evil :sleep :sleep :sleep

Yeah, call good ole' Dave and tell him that you have a credit debtor that you haven't paid in 5 years, you have very little extra cash to settle the debt, and let's see what he tells you...I guarantee you he will side with the credit company.......this despite the fact that if they haven't sued you by then, they legally can't sue......

[Aggie Hoopsfan]

Anyone who gets their stock tips from a talking head on a network deserves to lose their money.

[DarkReign]

Ive watched that stupid show for its entertainment value ALONE, but have never once thought of the dude as either red or blue.

Bottom line, who gives a shit?

[1369]

Yeah, call good ole' Dave and tell him that you have a credit debtor that you haven't paid in 5 years, you have very little extra cash to settle the debt, and let's see what he tells you...I guarantee you he will side with the credit company.......this despite the fact that if they haven't sued you by then, they legally can't sue......

Why wouldn't he side with the credit company, the debt is real and legitimate isn't it?

[Holt's Cat]

Nbadan is slowly circling down the porcelain bowl.

[2centsworth]

NBADan hates anything having to do with capitalism, so he makes stuff up that makes absolutely no sense to anyone except for the ignorant in financial matters.

btw, Kramer is an ultra lib.

[Nbadan]

Anyone who gets their stock tips from a talking head on a network deserves to lose their money.

Yeah, right....then why does his show even exist if not to give stocktips? He certainly isn't gonna have a show on how to calculate Betas.....

:sleep

[Nbadan]

Why wouldn't he side with the credit company, the debt is real and legitimate isn't it?

That's a matter of perception.....for instance, the U.S. debt is real and legitimate of the G-bonds sitting in our Social Security accounts too, trillions of dollars worth, but I bet you would be the first too argue that SS is broke......

[Nbadan]

Nbadan is slowly circling down the porcelain bowl.

Is the little kitty in a bad mood? no kiity-nip?

[Nbadan]

NBADan hates anything having to do with capitalism, so he makes stuff up that makes absolutely no sense to anyone except for the ignorant in financial matters.

btw, Kramer is an ultra lib.

Yep........and I'm a completely partisan Demo too......

:rolleyes

[1369]

That's a matter of perception.....for instance, the U.S. debt is real and legitimate of the G-bonds sitting in our Social Security accounts too, trillions of dollars worth, but I bet you would be the first too argue that SS is broke......

And what does this have to do with Dave Ramsey and some guy with credit card debt?

[L.I.T]

Yeah, right....then why does his show even exist if not to give stocktips? He certainly isn't gonna have a show on how to calculate Betas.....

:sleep

Unless an investor is benchmarking the performance of their portfolio or funning a tracker fund I fail to see how beta can help them.

Unless you're arguing that they need to be aware of the beta of an individual stock for risk management purposes.

[smeagol]

Only people who are right 100% of the time can give stock tips in TV shows.

[Hoover]

Cramer sucks.

[xrayzebra]

Yeah, right....then why does his show even exist if not to give stocktips? He certainly isn't gonna have a show on how to calculate Betas.....

:sleep

Some folks listen to the talking heads not for tips but
to get information from their guest.

Personally I never heard of Jim Cramer.

[Nbadan]

Unless an investor is benchmarking the performance of their portfolio or funning a tracker fund I fail to see how beta can help them.

Unless you're arguing that they need to be aware of the beta of an individual stock for risk management purposes.


My point is that no one is gonna listen to a investment show to learn how to calculate technical information that could make you a better investor....every one is looking for the easy money.......including listening to crack-pots like Cramer who hasn't beat the market in two years....Cramer's show is all about giving stock tips......

[L.I.T]

My point is that no one is gonna listen to a investment show to learn how to calculate technical information that could make you a better investor....every one is looking for the easy money.......including listening to crack-pots like Cramer who hasn't beat the market in two years....Cramer's show is all about giving stock tips......

I agree with you, I just wasn't sure where you were going with the beta thing, since that's an easy concept to understand, but a difficult to concept to implement. I'd just like to see a show that actually teaches investors how to understand what they are seeing.

I don't know Jim Cramer at all, but there is a saying amongst fund managers: If the housewife knows about it, it's already too late.

[Nbadan]

Cramer blowing a head-gasket while on-air (http://youtube.com/watch?v=rOVXh4xM-Ww)

[L.I.T]

Cramer blowing a head-gasket while on-air (http://youtube.com/watch?v=rOVXh4xM-Ww)


He worked fixed income at Goldman Sachs? Who the fuck is this fucker? That irritated the hell outta me. You know what he's bitching about, Bernanke didn't call him. He didnt' call him. Jesus, the guy is a moron. He went half a bill on Citi? Big fucking whoopdidoo. And people listen to this douche-bag?

Look, I'm going say this nicely, but the fixed-income market has been in need of a repricing for a long time. Emerging markets saw gains of 400 basis points over three to four day periods last year, are you trying to tell me that that isn't putting pressure on markets? They needed to reprice. When you have credit premiums running less than 100 basis points between the the benchmarks EMs and US treasuries, we have a problem.

God never mind. Douches like that remind me why I got out of the game.

[smeagol]

Cramer blowing a head-gasket while on-air (http://youtube.com/watch?v=rOVXh4xM-Ww)
The guy is an idiot, but what he is asking Bernkake to do (and this seems to be posted on August 3rd), Bernake finally did it last Thursday, August 16th (cut the discount rate).

So the guys wasn't so wrong after all.

[Aggie Hoopsfan]

Yeah, right....then why does his show even exist if not to give stocktips? He certainly isn't gonna have a show on how to calculate Betas.....

:sleep

I've watched it for entertainment value, and that's all people should watch it for.

He does have some good theories on what to look for in stocks, but if it's your money on the line, you should research the company on your own, not rely on some talking head going a mile a minute, to tell you how to invest your cash.

He advances some good theories (some should be familiar for anyone who has studied Warren Buffett's investment principles, some from finance 101 courses from college), but you've got to take the underlying guidance and apply it to your investments.

You're really reaching with this one.

[smeagol]

You're really reaching with this one.

I'd say he has reached much further away with other ones than with this one.

[L.I.T]

The guy is an idiot, but what he is asking Bernkake to do (and this seems to be posted on August 3rd), Bernake finally did it last Thursday, August 16th (cut the discount rate).

So the guys wasn't so wrong after all.

The guy was right with the action; but it wasn't as if he was the only one to figure that out. It was the only logical step Bernanke could take to alleviate some of the pressure. Tweaking the discount window is a small move that would have a big impact on the market; unlike quickly slashing the Fed funds rate, which would inevitably have cause more volatility and panic in the market. The Feds fund rate is like a sledgehammer, in this case something a bit more measured was required. Actually, what everyone is overlooking is the most important tweak Bernanke made; allowing term loans. This more than the cut is what would help the banks.

Again, this guy's advice was right, but, unlike what he was trying to project, it was something only he in his infinite wisdom devised. And I think that's what irks me about this guy the most. He acts as if he's the Fed chairman, what the hell is he supposed to do? He's going on and on about how people were calling him for assistance and asking him what to do. Bullshit. A two-bit tv stock 'guru' can do jack shit to move markets and smoothen out volatility. Please.

Damn straight you should research what you're investing into. You should also go into an investment that corrolates to your investment goals. The stupidest thing investors do is jump into something that doesn't fit their needs. That's the surest way to lose money and put yourself and your future financial wherewithal in jeopardy.

For you guys who want a good place to look at stocks check out The Motley Fool (www.fool.com).

[Soul_Patch]

Motley fool is one of the best stock radio shows imo.


I always watched this cramer guy because his show is so over the top. My wife and i laugh about it, and sort of get mesmerized by his ridiculousness.

[Nbadan]

From the get a Hint files : Dave Ramsey appearing semi-regularly on Neil Cavoto doesn't lend credibility to either FAUX or Ramsey....

[Nbadan]

Speaking of Ramsey, he was in deep denial today that those consumers with even reasonable credit are getting their mortgage applications re-evaluated, possible even being denyed, but at the very least having to pay a higher interest rate than before the whole subprime mess exploded......it got so bad even Cavoto, another shill, disagreed with him......

[Holt's Cat]

Left-wing partisan nutjobs keep the right-wing partisan nutjobs of the media in business.

[Switchman]

I love Ramsey. I have been listening to him since I was around 16. I'm 21 now.

I don't agree with a lot of what he says, I believe in good debt-business wise, but he puts you in the right mindframe. That's why I like listening to his show when I have a chance. Only a fool takes in information from one source and forms their entire belief system around it.

Most of the people that call his show and have XX,XXX+ dollars of stupid debt are morons and have made idiot decisions.

An 18 yr old who hasn't been lucky enough to have a parent or someone else teach them about rothIRAs for example, will have ultimately lost out on hundreds of thousands of dollars if they would have waited till after college. Or even a million dollars had they waited until their 30s to start one up. I'm a firm believer that listening to Ramsey at a young age supplements a future life of wealth.