Guru Ratings
Jim Cramer
Bad.
Remember my ratings criteria. I’m not judging these gurus on “global” or moral values, but very specific criteria. Many of my favorite books would be rated “bad” by my criteria for self-help (probably, because they are not self-help books). My ratings don’t reflect how well an author met his own goals, but how well they met my criteria for useful, accurate self-help.
Jim Cramer runs a popular investing show, Mad Money. He predicts the stock market and tells his viewers which stocks to buy.
In the 1990s, SmartMoney magazine wrote that Cramer was a great stock picker. But that was based on Cramer’s self-reported hedge fund returns. When finance writer Eric Tyson asked to see documentation of this, his calls were not returned. Cramer’s returns have never been independently audited.
A study by Barron’s showed that Cramer’s picks actually underperform the market average. You’re better off buying an Index Fund.
The website www.yourmoneywatch.com tracks every stock recommendation ever made on Cramer’s show. His picks have underperformed the Dow Jones Industrial Average.
The CXO Advisory Group evaluates financial gurus. They found that Cramer’s picks since 2000 have been worse than the market average. They are even worse than flipping a coin. Also see CXO’s Top Ten Reasons Gurus Make Bad Predictions.
I don’t recommend his books any more than I recommend his show.