Jim Cramer on Positive Academic Study of His Portfolio/Stock Picking Performance

(5/19/09) Selected Findings of Study: The cumulative return for this portfolio for the entire period is 31.75%, or an annualized return of 12.09%...The S&P 500 earned 18.72%, or 7.35% annualized over the same period. The Russell 1000 Growth and Value indexes earned 24.54% (9.51% annualized) and 24.77% (9.59% annualized), respectively. The Russell 2000 Growth and Value indexes earned 22.51% (8.76% annualized) and 9.39% (3.78% annualized), respectively. Thus, the Cramer portfolio outperformed all of these benchmarks. Overall, the results suggest that, while Cramer may be entertaining and mesmerizing to many of his viewers, his aggregate or average stock recommendations are neither extraordinarily good nor unusually bad. To his credit, he regularly exhorts his viewers to do their own homework and make sure they have a handle on their personal investment objectives. He frequently reminds viewers to wait at least a day or two before making any purchases to let the hubbub subside. (Source): Paul J. Bolster and Emery A. Trahan, "Investing in Mad Money: Price and Style Effects": pp. 2, 16, 23. Background Article: "Taking Stock of Jim Cramers Picks": http://dealbook.blogs.nytimes.com/2009/05/20/taking-stock-of-jim-cramers-picks (Copy of Study): http://www.cba.neu.edu/documents/Investing_in_Mad_Money.pdf Video: CNBC's "Mad Money" w/ Jim Cramer

Comments

1. LMAOxD LET IT GOOOOOOO!!! He is a smart man, but he has gotten himself far deeper into this than he should.... let it go!