how to pick individual stocks since indexing doesn't work?

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how to pick individual stocks since indexing doesn't work?

Postby quanuec » Fri Jul 26, 2013 7:57 pm

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Re: how to pick individual stocks since indexing doesn't wor

Postby JoMoney » Fri Jul 26, 2013 8:04 pm

Cramer is very entertaining... As far as "educating/teaching" like he claims.. he's not teaching anything that will help you.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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Re: how to pick individual stocks since indexing doesn't wor

Postby 22twain » Fri Jul 26, 2013 9:48 pm

Indexing doesn't work for Cramer because it doesn't give him enough to talk about to fill up his show every day. :happy
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Re: how to pick individual stocks since indexing doesn't wor

Postby nedsaid » Fri Jul 26, 2013 10:41 pm

I don't know, my US Total Stock Market Index has done pretty well.

Cramer has a trader's mentaility and not an investor's mentality. He was probably very good at trading. I have noticed that he runs hot and cold on his recommendations and his market outlook. Within a week!!! One week he might be bullish and a week later be bearish. Like watching a Tennis match. My neck hurts on the back and forth of his recommendations.
A fool and his money are good for business.
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Re: how to pick individual stocks since indexing doesn't wor

Postby Padlin » Sat Jul 27, 2013 2:30 am

22twain has it right, Index funds are boring.
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Re: how to pick individual stocks since indexing doesn't wor

Postby stemikger » Sat Jul 27, 2013 2:33 am

quanuec wrote:some words of wisdom from cramer...
http://video.cnbc.com/gallery/?play=1&video=3000185989


I remember years ago when Cramer had a radio show and he advised many people to invest in the Vanguard Index 500 fund. It was almost like a broken record. I guess indexing wasn't sexy enough for television.
Stay the Course!
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Re: how to pick individual stocks since indexing doesn't wor

Postby M_to_the_G » Sat Jul 27, 2013 5:44 am

nedsaid wrote:I don't know, my US Total Stock Market Index has done pretty well.

Cramer has a trader's mentaility and not an investor's mentality. He was probably very good at trading. I have noticed that he runs hot and cold on his recommendations and his market outlook. Within a week!!! One week he might be bullish and a week later be bearish. Like watching a Tennis match. My neck hurts on the back and forth of his recommendations.


He was not good at stock picking -- just like 9 out of 10 people (and closer to 10 out of 10 over the long term). He was a hedge fund manager, i.e. he made his money by short selling and market/stock manipulation. And he's still not good at stock picking. Someone (I think Ferri maybe?) linked an article here not too long ago that discussed the performance of his "hot tips." Dismal. A randomly chosen stock portfolio would have outperformed his suggestions in most cases during the period in question. I'm too lazy to locate and link the article here.
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Re: how to pick individual stocks since indexing doesn't wor

Postby JoMoney » Sat Jul 27, 2013 5:57 am

This is how Cramer makes people money with his stock picks:
A 2007 review by Barron's that found the only way to reliably profit from Cramer's stock picks was to short them (see "Shorting Cramer," Aug. 20, 2007).

That seems to be what smart traders have done, from the evidence of options-market activity examined by a finance professor, who found that betting against Mad Money's Buy recommendations can yield 25% in a month.

http://online.barrons.com/article/SB123397107399659271.html#articleTabs_article%3D1
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Re: how to pick individual stocks since indexing doesn't wor

Postby Jim180 » Sun Jul 28, 2013 12:46 am

Cramer mentions in that video that he waits for a stock on the new high list to pull back 5-8% and then buys. Imagine if someone would have done that with Apple. If they didn't have a "stop-loss" in place they would have gotten creamed. I've read Cramer has a net worth of about $100M. I don't know how much of that is book sales and how much is from investing. That's a lot of money to us, but a guy who claims to have a system for picking stocks should be a billionaire, not a millionaire. In fact, such a person should be one of the most wealthy men in the world. (like Buffett)
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Re: how to pick individual stocks since indexing doesn't wor

Postby jdb » Sun Jul 28, 2013 11:57 am

This thread reminds me of a game which my mother got me for Christmas when in high school many years ago and which I think of when listening to Cramer and his ilk. It was called "The Stock Market Game" or something like that and my mother thought would help me learn secrets of stock investing. Turned out to contain small bean bags which threw at board with slots entitled Buy and Sell and Hold and Big Loser and Big Winner etc. with numbers assigned. Rather sad look on mother when she thought there was nothing to learn from this game. But in reality I learned a lot, value when realized game had elemental truth: Priceless.
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