Cramer, the King of Market Cheerleader

I don't mean to be picky on him. Look, we just published his Video of his CNBC show and made some comments about him (good or bad), today I can not help to notice that Barron's published an article about him, too:

Shorting Cramer




Listen, I like the guy, he is smart and he tried his best to make you money. I would suspect any other guy doing the show like his would take advantage of his audience and make a penny or two (imagine, he buys ahead of time, when you buy he sells), but I never expect him to do the same. And he didn't, the Barron's article confirms that. My wife is hyptical about his yelling and chair-throwing actions, I don't, I think he is funny. I indeed learnt a lot from him. He mentioned a few defensive stocks and speculative stocks, I made two indices on them. After half a year or so, I did see the expected effects (If you like more info, I will publish them later). That's not the point, the point is you can not take him recommendation as face value (should take some entertainment value first) and go to buy the stock the next day.

You must be so disappointed when you find out -- after saying all the "Booyahhh" or the like -- you bought the stocks you trust so much, that you are so sure it's going to explode, but soon to find out that a few hedge funds shorted these stock right after you bought them!!! You should blame yourself, you left the meat on the table!!!

So that went wrong????

As I mentioned in the earlier post, confirmed by the Barron's, that when hundreds thousands people are watching the show, when everybody rush to buy them the next day, it creates a nice "overbought" situation, that it's so hard for hedgies not to take advantage of. Even Cramer admitted that if he is running a hedge fund he would use this strategy. It does not mean those hedgies are bad (damn it, they are bad!!! They are stealing money from the innocent people -- I call them grandmom, grandpa, but some of them are so young on the show....).

Alright, that's enough for complaining. Actually I am writting this not to demonstrate I am smart that Barron's (as prestige as Wall Street Journal) agreed on my view points (my post was on Friday, by the way), I am writing this because there is a lesson to be learnt.

In the investing community, it's widely excepted that there are two groups of investors: one is value investors, the other is the technicians. Accordingly, when you look for your stocks two buy, you have to consider the market participants (find the beauty pageant that not you think, but everybody considers the prettiest), which means you have to consider both fundamentals and technicals.

If I can get my way, I would add the third important factor, that is investor sentiment. When my daughter got her training, the first course was statistics, the second course was behavior investing.

Even with the strongest fundamentals, don't buy any stock which is overbought -- This is the lesson of today!!

As I am waiting for Pradeep for his new list, may be we should put Cramer on consideration. No, not what you think, I am not going to short Cramer (especially I just cursed the hedgies really good). The Barron's mentioned (Cramer agreed) that if you wait for two weeks then buy some of his recommendation, you actually can make a nice profit. So the idea is get his stocks after two weeks of recommendation, put the list on my spreadsheet, find stocks based on Fundamentals and Technicals and Smart money ownership, it may be a nice strategy.

Here is the website of Cramer stocks: www.yourmoneywatch.com

Please make your opinion registered, I still need to make the survey to work.

Good night everybody,

Mkt Swimmer