The Investment Scientist

Posts Tagged ‘Jim Cramer

New Year's investment resolutions

New Year’s investment resolutions

After working as a financial advisor for six years and after reading tons of research, I have developed a good sense about how the average investor loses money. As the New Year approaches, I think it’s good to share my insight so that readers can determine if they are making these mistakes.

Conflict of interest

I cannot emphasize this enough: Wall Street firms don’t work for you. If you have a Merrill Lynch or Morgan Stanley advisor, expect to give away 2.5% of your money every year – about half of it will be in explicit fees, the other half will be in hidden fees. If you invest through insurance products, expect to give up 3.5 percent of your money.

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Jim Cramer on Greek crisisOn April 15:

Bad news for the euro and Greece is good news for US. Get in at a better price than you should be able to, on the Dow 12,000 freeway

On April 26:

It because of Greece the market is going higher

On May 7:

Don’t buy any stocks until DOW 9000. The Dow’s decline was the natural result of Europe’s debt troubles and the riots in Greece. Investors should wait for the decline before they buy anything again

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Boo-Yahhh

Never underestimate what a bull market could do to Jim Cramer. After shying from making any top picks for 2009, presumably because he didn’t see any stocks worthy of buying at the beginning of 2009, he is back to his own game with a vengeance this year. We’ll see if his 2010 picks below will turnout as dismal as his 2008 ones.

  • Apple (AAPL)
  • Google (GOOG)
  • Crown Castle (CCI)
  • American Tower (AMT)
  • SBC Communications (SBC)
  • Skyworks Solution (SWKS)
  • Altera (ALTR)
  • Cypress Semi (CY)
  • Xilinx (XLNX)
  • Amazon (AMZN)
  • Cisco (CSCO)
  • Electronic Arts (ERTS)
  • Qualcomm (QCOM)

Jim Cramer: “Watch TV, Get Rich!”

If you watch his show, you certainly would not forget the Top Ten predictions he made in January 2nd, 2008. Now that we are well into 2009, it’s about time to check the accuracy of his predictions.

On Goldman Sachs (GS)

Goldman Sachs (GS) makes more money than every other brokerage firm in New York combined and finishes the year at $300 a share. Not a prediction—an inevitability. In fact, it’s only January, and I think it’s already come true.

GS lost 59.06% last year, 22% more than the S&P 500 Index.

On oil and Transocean (RIG)

Oil goes much higher, maybe as much as $125 a barrel… We are running out of oil more quickly than people can imagine, and that means great returns for oil companies. Just buy the stock of the company you filled up at today or buy a driller (Transocean (RIG) is my favorite), then sit back and make money.

RIG lost a total of 67.64% last year, 29% more than the S&P 500 Index.

On Arabic bailout of Citigroup (C)

The Fed arranges an Arabic Heimlich maneuver on Citigroup (C), so the banking giant doesn’t choke on the worst mortgage portfolio in the country.

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Watch Cramer lied on Jon Stewart’s show and got caught!!!

In a recent ABC news piece, Dr. David Swensen, manager of $34 billion Yale Endowment had this to say about Jim Cramer:

On ‘Mad Money,’ Cramer promotes a mindless short-term approach to markets by encouraging frenetic trading of individual stocks. Such a high-cost, tax-inefficient strategy almost guarantees failure.

In the same article, my view on Jim Cramer was also mentioned:

Zhuang is no fan of Cramer. Like Swensen and Ehrenberg, he argues against frequent trades and says Cramer may be influencing investors to overreact to financial news.

(For Swensen’s stellar track record, click here.)

8/11/08 Mad Money:

I called the bottom in the financial stocks on July 15. Since that call, many of the banking stocks are up, and up big. Wachovia Bank was $8.90; now $18.60 a share. WaMu was $3; now $4.08 a share. Incredibly AIG was $20; now $24 a share. Even the troubled Fannie Mae is up from a low of $6.90 a share to $8.30 a share today.

9/5/08 Lightning Round:

I like (Wachovia) CEO Bob Steele, so this stock is a buy.

9/10/08 Lightning Round:

Consider buying Wachovia on any weakness.

9/18 Mad Money:

Investment banks, like Goldman Sachs just cannot be owned …The time has come to put the investment banks, like Goldman, on the back burner, and instead focus on the deposit banks, such as Wells Fargo, US Bancorp, Bank of America, Wachovia and JPMorgan Chase.

9/25 Mad Money:

Wachovia will also benefit from the bailout. With CEO Bob Steel’s previous government experience, he will be able to take advantage of the plan by splitting Wachovia into good and bad components and sell off the bad parts quickly to the government.

9/29/08 Mad Money:

Wachovia was toast.

Note: Jim Cramer is a vivid example of investing by a hunch, a gut feeling and hearsay. The opposite is Harvard and Yale style of investing, which is rigorous and disciplined.


Author

Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.

Twitter: @mzhuang

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