Jim Cramer doesn’t beat the market

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Alchemist
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Re: Jim Cramer doesn’t beat the market

Post by Alchemist » Tue May 17, 2016 10:17 pm

Day9 wrote:
I was about to comment this identical story. Are you me?
Well clearly not, but I'm glad to hear I am not the only one who benefitted in actually listening to Cramer just long enough to get on the right track and find Bogle. Listening to Cramer about getting in the market (I have to say he deserves some credit for calling the bottom) has already made me tens of thousands of dollars, and that money will continue to compound for decades to come. Additionally he got me interested in studying how the stock market actually works by making it approachable where as most financial shows (to the average person unfamiliar with stocks) seem unbelievably esoteric.

Jim Cramer is not a Boglehead and hosts a show on a Financial Porn network, but I do not believe he is a bad guy and his heart certainly seems to be in the right place. I have a similar opinion about another name that gets thrown around here a lot but I won't derail the thread talking about another financial celebrity.

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Re: Jim Cramer doesn’t beat the market

Post by Leesbro63 » Wed May 18, 2016 5:12 am

Called the bottom? What bottom? In 2008-9, he said we were headed for below 4000.

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Re: Jim Cramer doesn’t beat the market

Post by coachz » Wed May 18, 2016 6:19 am

Leesbro63 wrote:Called the bottom? What bottom? In 2008-9, he said we were headed for below 4000.
That's just it. He calls so many things wrong and people like to only remember the one he called right. :oops: :oops: :oops:

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Re: Jim Cramer doesn’t beat the market

Post by coachz » Wed May 18, 2016 6:21 am

abuss368 wrote:I read his first book "Confessions of a Street Addict" many years ago. The book was not bad at all and one has to respect the work ethic and determination.

Best.
His work ethic and determination does not mean that any of his advice is of any value.

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Re: Jim Cramer doesn’t beat the market

Post by czeckers » Wed May 18, 2016 7:32 am

Say it ain't so! :shock:

I'm actually impressed that the difference is so small over the course of 15 years.
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Re: Jim Cramer doesn’t beat the market

Post by rakamaka » Wed May 18, 2016 10:15 am

Jim Cramer or his fund is not in the business of beating the market. He is educator+ entertainer about stock market for common people. He has rare ability to entertain about boring and dry subjects of financial world. You have choice of not listening to him.
Define market returns, SP500 or VG total stk mkt?
Check 10 yr cumulative returns of vanguard funds. VG 500 index 94.85% VG total mkt 96.61%
There are many VG non-index funds which beat market, Some don't. Ranging from 128% to 61%. Everything is subjective. Otherwise all BH folio investors should liquidate their portfolios and invest everything in VG Dividend Growth fund. 129% for 10 yrs beating handsomely to market, right?
https://investor.vanguard.com/mutual-fu ... ve-returns

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Re: Jim Cramer doesn’t beat the market

Post by tetractys » Wed May 18, 2016 11:07 am

Camer exemplifies the reasons I avoid TV.
Alchemist wrote:... Listening to Cramer about getting in the market (I have to say he deserves some credit for calling the bottom) has already made me tens of thousands of dollars, and that money will continue to compound for decades to come....
Two perfect examples of dumb luck in one sentence; ooh, maybe three... -- Tet

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Re: Jim Cramer doesn’t beat the market

Post by abuss368 » Wed May 18, 2016 4:15 pm

Bogleheads,

I am surprised that after all these years, Mad Money is still on CNBC.

Best.
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The Power of the media

Post by Taylor Larimore » Wed May 18, 2016 4:40 pm

abuss368 wrote:Bogleheads,

I am surprised that after all these years, Mad Money is still on CNBC.

Best.
Abuss368:

Never underestimate the power of the media to make people behave against their best interest.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Jim Cramer doesn’t beat the market

Post by sharpjm » Wed May 18, 2016 4:52 pm

Dopey wrote:So he's lagged the S&P by less than 1% over the last 15 years? I bet most of our Boglehead portfolios have lagged by more than that with our conservative asset allocations.
Also, active vs passive fund strategy is a completely unrelated topic to asset allocation so I'm not sure how a conservative AA has anything to do with the discussion. Either way, I'd take that bet with a 90/10 or even 80/20 portfolio assuming annual re balances.

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Re: The Power of the media

Post by abuss368 » Wed May 18, 2016 5:06 pm

Taylor Larimore wrote:
abuss368 wrote:Bogleheads,

I am surprised that after all these years, Mad Money is still on CNBC.

Best.
Abuss368:

Never underestimate the power of the media to make people behave against their best interest.

Best wishes.
Taylor
Indeed!
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: Jim Cramer doesn’t beat the market

Post by fischer2785 » Wed May 25, 2016 10:31 am

Doesn't seem too bad considering some of the trading restrictions they have. As far as I know the trust is restricted from trading any stock for 3 days after Cramer mentions it on CNBC, they don't reinvest dividends (divs. go to charity), and they don't execute trades until 60minutes (I think, might be a little less than that) after a trade alert is posted.

(source: had a free trial to the service)

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Re: Jim Cramer doesn’t beat the market

Post by Lindawilliams1960 » Tue Nov 14, 2017 8:29 pm

When the tide turns from passive investing, I would not be surprised to see Ramen beat the market by a large amount. Right now it is hard for anyone actively picking stocks.

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Re: Jim Cramer doesn’t beat the market

Post by Taylor Larimore » Tue Nov 14, 2017 8:58 pm

Lindawilliams1960 wrote:
Tue Nov 14, 2017 8:29 pm
When the tide turns from passive investing, I would not be surprised to see Ramen beat the market by a large amount. Right now it is hard for anyone actively picking stocks.
Lindawilliams1960:

You have revised a year-old thread. Two questions:

1. What makes you think that the tide will turn from passive investing?

2. Who is "Ramen?"

Thank you and best wishes.

Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Jim Cramer doesn’t beat the market

Post by Pajamas » Tue Nov 14, 2017 9:00 pm

Jim Cramer is an entertainer.

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Re: Jim Cramer doesn’t beat the market

Post by EyeYield » Wed Nov 15, 2017 2:48 am

Lindawilliams1960 wrote:
Tue Nov 14, 2017 8:29 pm
When the tide turns from passive investing, I would not be surprised to see Ramen beat the market by a large amount. Right now it is hard for anyone actively picking stocks.
Ramen, a Chinese-style wheat noodle, has just as good a chance of beating the market as tea leaves, fortune cookies, tarot cards, monkeys throwing darts or you and me. With Ramen, it's all in the wrist and the ability to read the noodles. It takes years of experience with trial and error methodology to develop a system.
What is your level of experience with Ramen and when the tide turns will it be incoming, outgoing or ominous?
"The stock market is a giant distraction from the business of investing." - Jack Bogle

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Re: Jim Cramer doesn’t beat the market

Post by angelescrest » Wed Nov 15, 2017 7:15 am

nisiprius wrote:
Tue May 17, 2016 6:50 pm
I think it's very important to establish that Cramer hasn't been beating the market. The article doesn't address the question of risk, which is also important because even if he were beating the market it wouldn't mean much if he were doing it by taking more risk. Conversely, the underperformance might be excused (as people like to do with hedge fund underperformance) if it could be shown that he was achieving his results with substantially less risk. My eyeballs are not good enough to judge from the charts.

The problem is not just Cramer, but the myth that it is quite easy for anyone to beat the market if they are just willing to put in a little time and effort with individual stocks, rather than taking the lazy way out with index funds. This myth presents itself in a thousand forms. As with the Beardstown Ladies, everyone would like to believe that any ordering investor can beat the market with a little gumption and attentiont details. Dozens of advisors would like their clients to believe that they, they advisors, can easily beat the market on their client's behalf. But it's not at all easy to do. The record of actively managed funds suggests that some managers actually can beat it by a small amount like 0.5%, but they take it all themselves in the expense ratio, so there's about zero benefit to the fund shareholders after costs.

It's mildly interesting that Cramer hasn't been doing it because he's such a prominent name. But financial data being what it is there's a lot of luck involved and perhaps someday in a few years his record will show that he's beating it. Shrug.
Really good points. Nisiprius, is there a link or article that shows how bad advisors, hedge fund managers, or stock picking elite, have fared in comparison to the S&P500 over the years? I read about that a lot on the forum but it is something I’ve wanted to actually show my friends. It would be a good sticky, too, to let people post all the elites who underperform the market year after year. As you point out, it’s the big myth that keeps the industry going.

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Re: Jim Cramer doesn’t beat the market

Post by bobandsherry » Wed Nov 15, 2017 7:40 am

I liken Jim to a gambler to walks up to craps table and gets hits it big a couple times. People begin to think he's an expert on gambling and start to follow him. Then it's just one crap out after another, people at the table lose their stakes. They only remember the win and continue to follow him on hopes of repeating the big hit once again.

Jim has been wrong on many big time endorsements he's made on stocks. To name a few, Wells Fargo (he said that would be better investment than JPMm HA!), GE (we've all see where that's gone, he continued to recommend this all the way to the bottom) and Schlumberger (that he called the best of breed, recommended over Halliburton, HAL has outperformed SLB since). I'd guess my Magic 8 Ball would get it "right" just as often.

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Re: Jim Cramer doesn’t beat the market

Post by azanon » Wed Nov 15, 2017 9:49 am

EyeYield wrote:
Wed Nov 15, 2017 2:48 am
Lindawilliams1960 wrote:
Tue Nov 14, 2017 8:29 pm
When the tide turns from passive investing, I would not be surprised to see Ramen beat the market by a large amount. Right now it is hard for anyone actively picking stocks.
Ramen, a Chinese-style wheat noodle, has just as good a chance of beating the market as tea leaves, fortune cookies, tarot cards, monkeys throwing darts or you and me. With Ramen, it's all in the wrist and the ability to read the noodles. It takes years of experience with trial and error methodology to develop a system.
What is your level of experience with Ramen and when the tide turns will it be incoming, outgoing or ominous?
Maybe Ramen has something to teach us about stocks. I find that generally its best to cook it 30 seconds to 1 minute less than the package says (aka al dente), so maybe that's like buy on the rumor sell on the news. Also just like global investing is regarded as desirable investing, I strongly recommend buying and sampling ramen from many countries, and also recommend overweigthing Asia for your ramen portfolio. Also, paying more upfront (aka ordering the good stuff on Amazon), pays dividends in the end in terms of taste.

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Re: Jim Cramer doesn’t beat the market

Post by deltaneutral83 » Wed Nov 15, 2017 10:06 am

The only thing I don't like about these types of pundits is when they state "market returns" and equate them to "average returns." This is simply false. Financial Porn for entertainment doesn't bother me in the least, "You can beat the market by x%" or "trade like a pro." Sure, fine whatever. But to flat out state the market returns and average returns are the same thing is patently false. By default, unless your adviser is working for free, then advisers as a whole are losing to the benchmark(s).

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Re: Jim Cramer doesn’t beat the market

Post by Lindawilliams1960 » Thu Nov 23, 2017 8:51 am

I am not in any way endorsing Jim Cramer. I subscribed to his Action Alert but did not renew. I learned a lot from it and it has helped me to do better in the market.
Cramer has good concepts. He recommends lots of stocks. Some win some lose. He has been wrong on GE but so has everyone. The passive funds hold GE by default.

I also subscribed to several other services. Cramer is better than most of them. The two services that have made me money have been Lowry Report and The Arora Report. Indexing has lot of merit but so does finding someone who consistently beats the market. There are not many who beat the market but there are a few.
I listen to Cramer show once a while. He does have good interviews with CEOs of companies in the news.

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Re: Jim Cramer doesn’t beat the market

Post by abuss368 » Thu Nov 23, 2017 8:59 am

In turning on CNBC the other day, I was surprised to know that Jim Cramers television show Mad Money was still on the air as it has been many years. I turned it off as I learned many years ago there is no investment value.

Wasn't he recommending Chipolte at $450?
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Re: Jim Cramer doesn’t beat the market

Post by abuss368 » Thu Nov 23, 2017 9:00 am

In addition, I confess that many years ago before becoming a Boglehead, I read a few of Jim Cramer's books. At the time, they had a place on my book shelf. It was "investment porn" in many respects.

I stay with our low cost index fund portfolio and The Wall Street Journal.
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Re: Jim Cramer doesn’t beat the market

Post by dbr » Thu Nov 23, 2017 9:25 am

What do you mean? Cramer is a big winner in his market, which is public entertainment.

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Re: Jim Cramer doesn’t beat the market

Post by Dottie57 » Thu Nov 23, 2017 9:33 am

Toons wrote:
Fri May 13, 2016 7:24 pm
Cramer is entertaining. :happy
For my temperament, he drives me crazy.

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Re: Jim Cramer doesn’t beat the market

Post by Nicolas » Thu Nov 23, 2017 10:39 am

I took his advice to buy AAPL in 2010, for that I am thankful. (Still holding).
De gustibus non est disputandum.

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Re: Jim Cramer doesn’t beat the market

Post by abuss368 » Thu Nov 23, 2017 10:44 am

dbr wrote:
Thu Nov 23, 2017 9:25 am
What do you mean? Cramer is a big winner in his market, which is public entertainment.
Well Said.
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Re: Jim Cramer doesn’t beat the market

Post by abuss368 » Thu Nov 23, 2017 10:45 am

The only book I found interesting was his first "Confessions of a Street Addict". The lifestyle and pressures were crazy.
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Re: Jim Cramer doesn’t beat the market

Post by BuyAndHoldOn » Thu Nov 23, 2017 12:13 pm

nedsaid wrote:
Fri May 13, 2016 5:57 pm
I like Jim Cramer. He is worth listening to because he did run a hedge fund and knows a lot about the market. A very smart and entertaining guy to listen to. I also like him because he is so human, he lets it all hang out, his strengths and faults are there for everyone to see. You can listen and learn but it doesn't mean you have to take his investment advice.

I agree and feel the same.

I have never taken one of Jim's suggestions, but I have looked in to some of them. (Again, I never acted on them).

He's like a weather man telling you the weather, today. He can tell you what equity markets (US mainly) are doing, but he doesn't have a crystal ball.

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Re: Jim Cramer doesn’t beat the market

Post by munemaker » Thu Nov 23, 2017 12:33 pm

I am surprised that so many people on this forum react to bozos like Jim Cramer, Dave Ramsey and Suze Orman.

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Re: Jim Cramer doesn’t beat the market

Post by arcticpineapplecorp. » Thu Nov 23, 2017 1:10 pm

Nicolas wrote:
Thu Nov 23, 2017 10:39 am
I took his advice to buy AAPL in 2010, for that I am thankful. (Still holding).
but what about others who upon his advice in 2009 waited to get into the market until the Dow reached 5000 (Cramer's notion of what the bottom was to be)? For those who would take his advice on that one, they'd still be waiting on the sidelines in cash since the Dow never got that low during/after the Great Recession.

See the problem? We choose to salute his winning picks and forget his picks that didn't turn out well. Well, how are we supposed to know which of his NEXT picks will do well or poorly? We don't. That's why it's foolish to listen to him at all, least of all invest any actual money based on any of his recommendations, which are nothing more than guesses. I can guess too and probably be as right and wrong as Cramer. I don't need him for that.

So you're confusing outcome with strategy as Larry Swedroe says. Just because your outcome with Apple worked out well, doesn't mean the strategy was good. Luck is not an investable strategy. Those who invested in the total stock market also got the return of Apple.

Cramer and others say things like, "Well, not all my picks turn out well, but my winners more than make up for my losers". I'm not sure about that. Unless someone really pores over his investments and compares it to an appropriate benchmark we really don't know what's going on. There's a lack of transparency with Cramer and others who like to puff their chests on TV.

But (and this has been said so many times I can't believe it has to be said again) if he's so brilliant why is he sharing this information with you?? And why isn't he retired? If he's so smart as an investor shouldn't he be on his own private island somewhere where we never hear from him again (wish fulfillment on my part I readily admit).
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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Re: Jim Cramer doesn’t beat the market

Post by bobandsherry » Thu Nov 23, 2017 1:15 pm

arcticpineapplecorp. wrote:
Thu Nov 23, 2017 1:10 pm
Nicolas wrote:
Thu Nov 23, 2017 10:39 am
I took his advice to buy AAPL in 2010, for that I am thankful. (Still holding).
but what about others who upon his advice in 2009 waited to get into the market until the Dow reached 5000 (Cramer's notion of what the bottom was to be)? For those who would take his advice on that one, they'd still be waiting on the sidelines in cash since the Dow never got that low during/after the Great Recession.

See the problem? We choose to salute his winning picks and forget his picks that didn't turn out well. Well, how are we supposed to know which of his NEXT picks will do well or poorly? We don't. That's why it's foolish to listen to him at all, least of all invest any actual money based on any of his recommendations, which are nothing more than guesses. I can guess too and probably be as right and wrong as Cramer. I don't need him for that.

So you're confusing outcome with strategy as Larry Swedroe says. Just because your outcome with Apple worked out well, doesn't mean the strategy was good. Luck is not an investable strategy. Those who invested in the total stock market also got the return of Apple.

Cramer and others say things like, "Well, not all my picks turn out well, but my winners more than make up for my losers". I'm not sure about that. Unless someone really pores over his investments and compares it to an appropriate benchmark we really don't know what's going on. There's a lack of transparency with Cramer and others who like to puff their chests on TV.

But (and this has been said so many times I can't believe it has to be said again) if he's so brilliant why is he sharing this information with you?? And why isn't he retired? If he's so smart as an investor shouldn't he be on his own private island somewhere where we never hear from him again (wish fulfillment on my part I readily admit).
+1!

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Re: Jim Cramer doesn’t beat the market

Post by Nicolas » Thu Nov 23, 2017 3:32 pm

arcticpineapplecorp. wrote:
Thu Nov 23, 2017 1:10 pm
Nicolas wrote:
Thu Nov 23, 2017 10:39 am
I took his advice to buy AAPL in 2010, for that I am thankful. (Still holding).
but what about others who upon his advice in 2009 waited to get into the market until the Dow reached 5000 (Cramer's notion of what the bottom was to be)? For those who would take his advice on that one, they'd still be waiting on the sidelines in cash since the Dow never got that low during/after the Great Recession.

See the problem? We choose to salute his winning picks and forget his picks that didn't turn out well. Well, how are we supposed to know which of his NEXT picks will do well or poorly? We don't. That's why it's foolish to listen to him at all, least of all invest any actual money based on any of his recommendations, which are nothing more than guesses. I can guess too and probably be as right and wrong as Cramer. I don't need him for that.

So you're confusing outcome with strategy as Larry Swedroe says. Just because your outcome with Apple worked out well, doesn't mean the strategy was good. Luck is not an investable strategy. Those who invested in the total stock market also got the return of Apple.

Cramer and others say things like, "Well, not all my picks turn out well, but my winners more than make up for my losers". I'm not sure about that. Unless someone really pores over his investments and compares it to an appropriate benchmark we really don't know what's going on. There's a lack of transparency with Cramer and others who like to puff their chests on TV.

But (and this has been said so many times I can't believe it has to be said again) if he's so brilliant why is he sharing this information with you?? And why isn't he retired? If he's so smart as an investor shouldn't he be on his own private island somewhere where we never hear from him again (wish fulfillment on my part I readily admit).
Agreed, that's the only thing I ever bought that he recommended. I only watched for entertainment purposes but I did see his point about AAPL, that's why I bought. I've made a bundle. He also recommended SHLD (Sears Holdings) which is being run by one of his buddies, and also SUP (Superior Industries Intl), really bad calls and neither of which I bought, anyway I cut the cord since then so don't watch him anymore.
De gustibus non est disputandum.

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Re: Jim Cramer doesn’t beat the market

Post by danaht » Thu Nov 23, 2017 3:45 pm

Definitely should be watched for entertainment purposes only. I think he also has some good advice as well as bad advice.

The good advice that most bogleheads would probably agree with:
1) He believes that the majority of investments should be in index funds - and not individual stocks. He only recommends buying individual stocks with a small % of the total.
2) He believes people should stay invested in a diversified portfolio of equities.

The bad advice:
Probably everything else involving market timing.

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Re: Jim Cramer doesn’t beat the market

Post by Nate79 » Thu Nov 23, 2017 5:45 pm

I find Cramer entertaining and very knowledgeable. The smug attitude in this thread is a little over the top. I guess there are no hypocrites here that use any active funds, right?

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Re: Jim Cramer doesn’t beat the market

Post by arcticpineapplecorp. » Thu Nov 23, 2017 9:18 pm

Nicolas wrote:
Thu Nov 23, 2017 3:32 pm
Agreed, that's the only thing I ever bought that he recommended. I only watched for entertainment purposes but I did see his point about AAPL, that's why I bought. I've made a bundle. He also recommended SHLD (Sears Holdings) which is being run by one of his buddies, and also SUP (Superior Industries Intl), really bad calls and neither of which I bought, anyway I cut the cord since then so don't watch him anymore.
congratulations on cutting the cord. So two out of three calls are bad ones. Not a good track record then. So you should admit you got lucky (or he got lucky and you did by proxy) with Apple. But again, luck is not something you can replicate.

I'm curious when you say you've "made a bundle" does that mean you've sold all your Apple stock? Because if you're still holding it, then you haven't "made" anything. You only make money when you sell your shares for more than you've bought them. Until you sell them, you could lose it all if the company goes bankrupt. And of course nobody ever thinks that will happen to any company they own, especially the biggest company in the world, right?
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Re: Jim Cramer doesn’t beat the market

Post by JBTX » Thu Nov 23, 2017 10:00 pm

joebh wrote:
Fri May 13, 2016 6:58 pm
raspino wrote:I agree that while this is not news, it helps to underscore many of the things that are said here. There is nothing wrong with enforcing many of the ideas that are espoused by BH.
I wasn't being critical of your post.

In fact, I think it might be a handy (if rather long) thread if everyone responded with the name of a high-profile investing celebrity in the news who didn't beat the market. That way, folks searching for that name would find it.

I was just pointing out that you could have put pretty much any name there and I wouldn't be surprised.
That’s a good idea. Something like an investment advisor hall of shame thread.

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Re: Jim Cramer doesn’t beat the market

Post by MidwestMike » Thu Nov 23, 2017 10:15 pm

arcticpineapplecorp. wrote:
Thu Nov 23, 2017 9:18 pm
I’m curious when you say you've "made a bundle" does that mean you've sold all your Apple stock? Because if you're still holding it, then you haven't "made" anything. You only make money when you sell your shares for more than you've bought them.
I know many say this but I think it is so wrong. If you believe that then you must likewise believe that if you are holding a stock, say Enron, that has gone down a lot then you haven’t lost anything.

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arcticpineapplecorp.
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Re: Jim Cramer doesn’t beat the market

Post by arcticpineapplecorp. » Thu Nov 23, 2017 10:25 pm

MidwestMike wrote:
Thu Nov 23, 2017 10:15 pm
arcticpineapplecorp. wrote:
Thu Nov 23, 2017 9:18 pm
I’m curious when you say you've "made a bundle" does that mean you've sold all your Apple stock? Because if you're still holding it, then you haven't "made" anything. You only make money when you sell your shares for more than you've bought them.
I know many say this but I think it is so wrong. If you believe that then you must likewise believe that if you are holding a stock, say Enron, that has gone down a lot then you haven’t lost anything.
no actually, you've made an additional point I didn't make, but am willing to add--

you only make money when you sell an asset for more than you've paid originally
you can lose money either selling for less than you paid originally and/or
holding onto an asset that loses value (below what you paid) and never gets back to the original amount paid.

Again, this is why individual stocks are more risky than the broad market. An individual stock can go to zero. The chances/probability of this happening with the broad market are not as great (when you consider the world market as your investing universe). An individual stock can fall and never recover. The broad market (when you diversify world-wide) has never done that. Could it? Sure. But again, your chances of these bad scenarios are far greater with individual stocks than with the entire world stock market.

Also, if you hold the world market, you will continue to receive dividends as long as you hold. With Enron, despite holding (not selling) that stock, they won't be paying dividends ever again (and haven't since 2000). source: http://picker.uchicago.edu/Enron/EnronA ... rt2000.pdf
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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Re: Jim Cramer doesn’t beat the market

Post by MidwestMike » Thu Nov 23, 2017 10:35 pm

arcticpineapplecorp. wrote:
Thu Nov 23, 2017 10:25 pm
MidwestMike wrote:
Thu Nov 23, 2017 10:15 pm
arcticpineapplecorp. wrote:
Thu Nov 23, 2017 9:18 pm
I’m curious when you say you've "made a bundle" does that mean you've sold all your Apple stock? Because if you're still holding it, then you haven't "made" anything. You only make money when you sell your shares for more than you've bought them.
I know many say this but I think it is so wrong. If you believe that then you must likewise believe that if you are holding a stock, say Enron, that has gone down a lot then you haven’t lost anything.
no actually, you've made an additional point I didn't make, but am willing to add--

you only make money when you sell an asset for more than you've paid originally
you can lose money either selling for less than you paid originally and/or
holding onto an asset that loses value (below what you paid) and never gets back to the original amount paid.

Again, this is why individual stocks are more risky than the broad market. An individual stock can go to zero. The chances/probability of this happening with the broad market are not as great (when you consider the world market as your investing universe). An individual stock can fall and never recover. The broad market (when you diversify world-wide) has never done that. Could it? Sure. But again, your chances of these bad scenarios are far greater with individual stocks than with the entire world stock market.

Also, if you hold the world market, you will continue to receive dividends as long as you hold. With Enron, despite holding (not selling) that stock, they won't be paying dividends ever again (and haven't since 2000). source: http://picker.uchicago.edu/Enron/EnronA ... rt2000.pdf
I was using Enron as an example. I still contend that you should value your security holdings at their current value not what you paid for them. Do you include your securities in calculating your net worth?

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Re: Jim Cramer doesn’t beat the market

Post by arcticpineapplecorp. » Thu Nov 23, 2017 10:55 pm

MidwestMike wrote:
Thu Nov 23, 2017 10:35 pm
I was using Enron as an example. I still contend that you should value your security holdings at their current value not what you paid for them. Do you include your securities in calculating your net worth?
it was a good example, though. For starters very few saw it coming until it was too late (as can happen with companies). It was also a big company (one article said it was the 6th largest company at one point, though that's debatable and rests on some questionable accounting as Enron was known for).

I don't own or invest in any individual stocks because I believe they're far risker and require making concentrated bets (gambling) instead of investing in the entire world stock market. Yes you could say that since I only have 30% international (which is less than the world market capitalization) I'm actively investing. I won't argue that point. But I don't believe the world markets will go to zero like is possible (probable?) with most individual companies. Apple already nearly went bankrupt in the past and could do it again if they don't continue to innovate. The bigger they are the harder they fall.

Most would agree with you that net worth changes with current values of your portfolio. But just because your portfolio is up doesn't mean you've "made" money until you sell for a gain. If my net worth is up today but down tomorrow have I made or lost money? Well, technically, neither. The answer depends on when I sell. If I sell after the market fell, I've lost money. If I hold and sell at a future date after the value of my investments return (or go higher than today) then I've made money. So it doesn't necessarily matter what the value of my investments are worth today or tomorrow if I'm not planning on selling any of these for another 20+ years. And since my net worth will go up and down over those years along with the market and my new contributions, does it matter what my net worth is? Many track it, but I'm not really that interested. I'm really only interested in what my investments will be worth when I need to sell them 20+ years from now. I expect the markets to continue to rise over time. The same can not be said for all individual companies, which is why I get concerned when I hear (more than once now) proclamations like "I've made a killing on Apple" even though they've never actually sold any of their stock. Until they do, they haven't technically made anything and could lose it all. I'd hate to see that happen, so I counsel diversification. Especially when one's stock prowess (getting back to the OP) is based on one of Cramer's past picks (while acknowledging his other two stock picks did horribly).
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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Re: Jim Cramer doesn’t beat the market

Post by munemaker » Thu Nov 23, 2017 11:00 pm

dbr wrote:
Thu Nov 23, 2017 9:25 am
What do you mean? Cramer is a big winner in his market, which is public entertainment.
For entertainment, I would rather watch football or catch a movie.

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Re: Jim Cramer doesn’t beat the market

Post by Nicolas » Thu Nov 23, 2017 11:26 pm

arcticpineapplecorp. wrote:
Thu Nov 23, 2017 9:18 pm
Nicolas wrote:
Thu Nov 23, 2017 3:32 pm
Agreed, that's the only thing I ever bought that he recommended. I only watched for entertainment purposes but I did see his point about AAPL, that's why I bought. I've made a bundle. He also recommended SHLD (Sears Holdings) which is being run by one of his buddies, and also SUP (Superior Industries Intl), really bad calls and neither of which I bought, anyway I cut the cord since then so don't watch him anymore.
congratulations on cutting the cord. So two out of three calls are bad ones. Not a good track record then. So you should admit you got lucky (or he got lucky and you did by proxy) with Apple. But again, luck is not something you can replicate.

I'm curious when you say you've "made a bundle" does that mean you've sold all your Apple stock? Because if you're still holding it, then you haven't "made" anything. You only make money when you sell your shares for more than you've bought them. Until you sell them, you could lose it all if the company goes bankrupt. And of course nobody ever thinks that will happen to any company they own, especially the biggest company in the world, right?
No, I haven't sold a single share yet so you're right, I haven't made a cent. I'm paralyzed with the fear that as soon as I've sold it will march straight through the $200/sh barrier and I'll be left with lifelong regret. It's about 15% of my portfolio.

Eventually I will sell and have to pay capital gains tax which will put me firmly in AMT territory if I sell it all in the same tax year (I won't donate it or leave it to my heirs). The bulk of my holdings is in taxable though I do hold about a fourth in a Roth. I could sell that with only my regret as a possible consequence. (Of course it could go the other way and I would regret not selling).

Picking the sell point is the problem. When I finally do sell I'll reinvest it in index funds, it's my last individual stock holding.
De gustibus non est disputandum.

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Re: Jim Cramer doesn’t beat the market

Post by BW1985 » Fri Nov 24, 2017 12:51 am

Its like watching an expert video on how to play blackjack. Odds are you’re still going to lose..
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

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Re: Jim Cramer doesn’t beat the market

Post by arcticpineapplecorp. » Fri Nov 24, 2017 8:55 am

Nicolas wrote:
Thu Nov 23, 2017 11:26 pm
arcticpineapplecorp. wrote:
Thu Nov 23, 2017 9:18 pm
Nicolas wrote:
Thu Nov 23, 2017 3:32 pm
Agreed, that's the only thing I ever bought that he recommended. I only watched for entertainment purposes but I did see his point about AAPL, that's why I bought. I've made a bundle. He also recommended SHLD (Sears Holdings) which is being run by one of his buddies, and also SUP (Superior Industries Intl), really bad calls and neither of which I bought, anyway I cut the cord since then so don't watch him anymore.
congratulations on cutting the cord. So two out of three calls are bad ones. Not a good track record then. So you should admit you got lucky (or he got lucky and you did by proxy) with Apple. But again, luck is not something you can replicate.

I'm curious when you say you've "made a bundle" does that mean you've sold all your Apple stock? Because if you're still holding it, then you haven't "made" anything. You only make money when you sell your shares for more than you've bought them. Until you sell them, you could lose it all if the company goes bankrupt. And of course nobody ever thinks that will happen to any company they own, especially the biggest company in the world, right?
No, I haven't sold a single share yet so you're right, I haven't made a cent. I'm paralyzed with the fear that as soon as I've sold it will march straight through the $200/sh barrier and I'll be left with lifelong regret. It's about 15% of my portfolio.

Eventually I will sell and have to pay capital gains tax which will put me firmly in AMT territory if I sell it all in the same tax year (I won't donate it or leave it to my heirs). The bulk of my holdings is in taxable though I do hold about a fourth in a Roth. I could sell that with only my regret as a possible consequence. (Of course it could go the other way and I would regret not selling).

Picking the sell point is the problem. When I finally do sell I'll reinvest it in index funds, it's my last individual stock holding.
Thanks for your honesty. The sell point is the problem. You'll never know until after the fact. It's one of the reasons I don't invest in individual stocks. What you describe and what I believe many are dealing with FOMO (fear of missing out) either they buy a stock that has done well because they don't want to miss out on what they think will be continued gains (often not) and then they hold on far too long for fear of missing out again if they sell and it does well in the future (but it might not, it's best days could be behind it). I guess I don't have the FOMO but rather the fear of tracking error regret. I'd feel worse picking a stock that didn't do as well as "the market" when I could have just gotten the return of the market. I'm ok with the return of the market. Some aren't and they seek ever higher returns. But I think that's greed that drives them to do that, which is another type of mistake that drives investors. Thanks for your explanation and honesty. I think it can help others who may not have thought about this from buying stock and later having analysis paralysis.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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Re: Jim Cramer doesn’t beat the market

Post by bogglehead125 » Fri Nov 24, 2017 10:37 am

FWIW, there is a well-known hedge fund strategy to do precisely the opposite of a Jim Cramer call -- the idea being that his calls historically have had no predictive power, but seem to move prices anyway! This strategy was profitable once upon a time, but is now too popular and has become folklore.

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Re: Jim Cramer doesn’t beat the market

Post by abuss368 » Fri Nov 24, 2017 1:16 pm

I spent Thanksgiving at Cramer's house. He recommended Pets.com, AOL, and Worldcom to start. He mentioned his claims are hoping for a 10 bagger with Enron!
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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