We add another chapter in the ongoing debate between Barron’s, the weekly paper that is sister to the WSJ, and James Cramer, the former hedge fund manager now turned pundit/CNBC star/game show host.

The back and forth between CNBC and Barron’s amounts to an absurd debate over what Cramer’s stock picking record on the show actually is. CNBC claims Cramer’s calls have saved viewers millions of dollars; Barron’s claims Cramer’s picks seriously underperform the markets, and are primarily momentum based. They show that where Cramer responds to viewer queries — when viewers call in to ask him questions sua sponte — are actually are better than his prepared picks.

My take? Its a silly and irrelevant argument. Its TELEVISION, for crying out loud. Television is about entertainment, not actual investing. It can be fun, informative, annoying, laughable and on rare occasion, actually provide a modicum of common sense and information — but it is not the advised way you should be managing your personal finances, retirement accounts, or even your play money.

If you make investments based on a tv show, you deserve to not only to underperform, but to lose ALL OF YOUR MONEY. That should be the penalty for being that stupid — destitution.

As I noted 4 years ago in Lose the News:

“Sure, the data points on occasion may be important, but the rest is essentially infotainment and filler. I find CNBC both informative and entertaining — but it’s not the basis of my investment decisions. This explains why there aren’t any hedge funds running money on the basis of what’s on TV.”

Of course, most media do not go outof their way to tell you this. But now you know, so adjust accordingly.

Barron’s vs. Cramer: The Charts can be found here.


Lose the News (June 16 2005)


Cramer’s Star Outshines His Stock Picks
Barron’s FEBRUARY 7, 2009


Category: Financial Press, Hedge Funds, Really, really bad calls, Television

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

28 Responses to “Barron’s vs. Cramer, Part II”

  1. But Barry, you do TV. Are you saying you are merely entertaining us?

    Well, for the most part, yes. Its infotainment.

    Recall that I have spent years warning you not to listen to what you hear on tv, but to learn to think for yourself.

    Second, I always try to bring something worthwhile to the debate and discussion. As been written, I try to bring a “counterweight of rationality to the typical ravings heard there.” But that doesn’t mean everyone else has the same agenda.

    Lastly, I do TV because it is a fun experience — I meet and hang with some great people; My partners always enjoy the publicity — it isn’t bad for business; and, the financial tv groupies are totally awesome.

  2. Marcus Aurelius says:

    So you mean that there story about the hillwilliam who got rich while huntin’ fer his dinner weren’t true?

    Damn. I ben shootin’ into the ground fer nothin’ all these years.

  3. dead hobo says:

    BR said

    If you make investments based on a tv show, you deserve to not only to underperform, but to lose ALL OF YOUR MONEY. That should be the penalty for being that stupid — destitution.


    As opposed to the steady wealth you will earn by giving your cash to Uncle Bernie or one of his analogs elsewhere. I repeat, most people should just put their cash in bank CDs. Investing in financial instruments has nothing to do with science and everything to do with luck. BTW, I think momentum is a primary component of many scientific investment systems, especially those that take the emotion out of decision making..

  4. That’s very true.

    I am reading a book (I’ll post a review in the Book Club eventually) that actually states most Alpha achieved can be traceable to momentum strategies.

    Fusion IQ uses momentum in a few ways, tracking Short (ST), medium (MT) and long (LT) term trends.

  5. hipster says:

    I want to know why the fuck no one is making any noise about the fact that CNBC’s Parent company GE is reaffirming its dividend, paying a healthy one when they are recipients of the backstopping of our federal government. I’m fucking livid. Taxpayers are footing these dividend, or at least guaranteeing them.

    You have to think at some point our great leaders are going to realize that the equity/bondholders are going to need to take a further haircut for all these rescues/guarantees.

  6. Charlatan says:

    BR, your take really surprises me. It is simply not an irrelevant or silly argument in the least. Jim Cramer is someone who really only knows what he’s talking about 5% of the time (a few tips on momentum trading or whatever), and yet he chimes in every 20 minutes of every weekday. Why? To fill his and his handlers wallets……period. And the only way that is possible is not because he’s entertaining, but because there is a huge effort always underway to create the impression that Cramer is on top of the situation and really nailing it, even though he has been terrible. Do you think that his show would be watched by anyone at all, no matter how entertaining he was, if they weren’t fooled into thinking that nearly every word out of his mouth was a pearl of wisdom? CNBC doesn’t run ads that say, “Hey, we know he’s really sucked for years at calling this market, but what a crack-up!!!!!” No, they run melodramatic spots with the very serious slogan, “In Cramer We Trust.” Just because you know that he sucks, doesn’t mean the public does. And trying to cut through the very real and dangerous charade is not silly at all.


    BR: I can’t say it any simpler: Do not make investment decisions by watching tv.

  7. wswainwright says:

    Infotainment at it’s best…

    CRAMER prognostications:

    MARCH 06, 2007 – The financials are bottoming now.
    MAY 11, 2007 – The worst is baked into the retail stocks

    June 13, 2007 – Fed easing is off the table. The market has hit bottom and is ready to roll again.

    JULY 05, 2007 – Negative rumors may continue but it’s important that you stay strong. The bears will continue to be wrong. Still see the Dow going to 14,548 this year. This is the season to be in technology

    JULY 09, 2007 – We are in a dramatic, runaway bull market. Stocks that go to 80 tend to go to 120. Tech, cable & telecom will work. Oil goes to the mid 80’s.

    JULY 10, 2007 – Even with the selloff, minerals are in total bull market mode.

    JULY 13, 2007 – The move in tech is for real. Am begging you to buy tech!

    JULY 25, 2007 – Over the next few months there’s just a huge amount of money to be made owning the technology stocks. Now’s the time (USE KEYWORD “HORSEMEN” TO SEE CRAMER’S FAVORITE TECH STOCKS). The refiners’ margins are being squeezed

    JULY 26, 2007 – The selling today was pure fear – but 500 points on the Dow may not be enough. Would sell anything mortgage or corporate credit related.

    JULY 27, 2007 – The banks, brokers and homebuilders look cheap but the earnings estimates are too high and will be slashed. We want to buy stocks of companies that have just beat the numbers and have taken damage in the sell-off.

    JULY 30, 2007 – The market will go up again tomorrow as the institutions buy stocks at the end of the quarter to make their performance look better.

    JULY 31, 2007 – The worst case scenario keeps playing out – you have to sell the financials on any strength.

    AUGUST 02, 2007 – The Dow is going up when it should be going down.

    AUGUST 03, 2007 – The markets will stabilize. Until then, preservation of capital is a priority. Want you to stay in the game.
    **AUGUST 07, 2007 – The ‘Rant’. What the heck happened from July 27th? http://allday.msnbc.msn.com/archive/2007/08/07/307269.aspx
    AUGUST 09, 2007 (Dow -387) – The European blowup is not over. Sell if you have any gains in MTG, MBI, KBH, BX, CTX, BZH & WM.

    AUGUST 13, 2007 – The market action today (Dow -3) is saying that the Fed is going to cut rates – but don’t buy it. Bernanke wants to take us perilously close to recession by not cutting rates.

    AUGUST 17, 2007 (Dow up 233) – The Fed blinked today with a discount rate cut. The rules of the game have changed. The consequences are all positive. Think the analysts will start reiterating their buys on Monday. The Fed will now cut the Fed funds rate making dividend stocks more attractive.

    AUGUST 23, 2007 (Dow down .25) – The market is in recovery mode and will be fueled by Fed rate cuts.

    AUGUST 28, 2007 (Dow down 280) – In the midst of the sell-off there is a bull market in gambling stocks. Casual dining is in a bear market.

    SEPTEMBER 07, 2007 (Dow down 250) – The Fed will have to cut rates “big” now (after today’s poor jobs report) because we could be staring at a recession.

    SEPTEMBER 10, 2007 (Dow up 14) – Expect only a 25 basis point cut from the Fed. Rates will not be cut deep enough to do anything this year.

    SEPTEMBER 18, 2007 (Dow up 336) – The credit crisis may soon be over. The time to worry has come and gone. The 50 basis point rate cut today by the Fed is only the first cut – see three more

    SEPTEMBER 19, 2007 (Dow up 76) – The rally of the last two days is just the beginning. History says it’s not too late to get on board. It’s time to buy. Don’t pay attention to the bears. Wouldn’t touch the homebuilders. Feel good about owning the banks: Wachovia (WB), Downey Savings (DSL) & FirstFed (FED). Like the dividend payers like AT&T (T), Verizon (VZ), Con Ed (ED) & Genesis Lease (GLS). The Fed cuts will also help retailers like Kohl’s (KSS), Target (TGT) and Sears (SHLD). The US dollar will go higher, not lower

    SEPTEMBER 21, 2007 (Dow up 53) – We are now in a true bull market. We are going to get close to Dow 14000 within the next two weeks. More Fed cuts are ahead preventing steep declines. We will see “shocking” advances on the way to the 14500 target by the end of the year. Not worried about the weak dollar – makes U.S. assets cheaper for foreign acquisition.

    SEPTEMBER 26, 2007 (Dow up 99) – If Warren Buffett takes a stake in Bear Stearns (BSC) you will see a move in Citigroup (C), AIG (AIG), J.P. Morgan (JPM) and American Express (AXP) that have held back the Dow.

    OCTOBER 01, 2007 (Dow up 192) – The market will go higher because rates are going lower and the Fed is easing.

    NOVEMBER 07, 2007 (Dow down 361) – Would avoid the financials like the plague.

    NOVEMBER 12, 2007 – We are not at a bottom but the market is oversold. Capital preservation must come first (use keywords “recession-proof portfolio” for Cramer’s defensive picks.

    NOVEMBER 16, 2007 – Maybe the Fed is done easing. That’s why commodities are dropping like rocks – gold could get crushed.

    NOVEMBER 28, 2007 (Dow up 331) – The market is bottoming just like in 1990. The Fed has woken up. We can buy selected stocks (see today’s recommendations and major reiterations.

    NOVEMBER 29, 2007 – The financials have bottomed. Cash is not king now as rates are going lower. The Fed may cut rates by 100-150 basis points.

    NOVEMBER 30, 2007 (Dow up 60) – You want to stay in the financials now that Bernanke has signaled more rate cuts (see today’s recommendations/reiterations).They will go much higher.

    DECEMBER 13, 2007 – Think the Fed’s cutting rates will cause the US dollar to rise dramatically.

    DECEMBER 17, 2007 – See oil going to $150/bbl.

    JANUARY 03, 2008 – Natural gas prices will outperform oil in 2008.

    JANUARY 22, 2008 – The Fed woke up today with its 3/4 point cut – we need them to take the Fed funds rate down to 2 3/4% so higher rate mortgages can be refinanced.

    JANUARY 23, 2008 (Dow up 299) – The market bottomed today. The new leaders are the financials & retailers.

    JANUARY 24, 2007 – The stimulus package will help retail – will improve same store sales comps that drive retail stocks.

    JANUARY 30, 2008 – Now that the Fed has cut rates another half point catastrophe has been taken off the table. The market selloff is a buying opportunity. You have a once in a decade chance to make big money right now. Only the mortgage insurers stand in the way of a full blown housing recovery that no one is expecting.

    JANUARY 31, 2008 – When rates are coming down you buy the retailers, financials and homebuilders. The mortgage insurer problem will be resolved. Don’t want to be defensive now. The dry bulk shippers are overvalued.

    FEBRUARY 01, 2008 – The banks will go higher because the Fed is still behind the curve and must continue cutting rates.

    FEBRUARY 04, 2008 – Can’t recommend tech stocks again until August. The banks and the homebuilders should be bought on weakness. Momentum stocks should be avoided. Won’t make a lot of money on the casino stocks.

    FEBRUARY 05, 2008 (Dow down 370) – The Fed rate cuts will prevail. We will get the housing bottom after Fed funds goes to 1.75%. The new market leaders will be the banks, retailers and the brokers.

    FEBRUARY 07, 2008 – The summer has been bad for tech for 16 of the last 17 years. Holding on to tech shares past the Goldman tech conference in two weeks is a mistake. The tech money will flow into the financials and retailers.

    FEBRUARY 14, 2008 – The brokers will not bottom until all the analysts have cut their estimates.

    MARCH 11, 2008 (Dow up 417) – The rally is not done – we could be in for a week of higher prices.

    MARCH 13, 2008 – If the Fed buys $50B of agency securities we could see 1000 points on the Dow. The oversold rally will contiue another 4-5 days.

    MARCH 18, 2008 (Dow up 420) – Think we’re seeing a legitimate bottom in the market. Do not sell this rally. Expect more bank failures.

    MARCH 19, 2008 (Dow down 293) – Don’t see any upside in the trucking stocks. The four horsemen of the potential Apocalypse are Merrill (MER) ,Citigroup (C), Washington Mutual (WM) & UBS (UBS).

    MARCH 25, 2008 – Prefer the natural gas stocks vs the integrated oils.

    APRIL 10, 2008 – The golds have simply pulled back in a bull market – IMF selling is a buying opportunity. Goes to $1600/oz

    APRIL 28, 2008 – Am bullish whether or not the Fed cuts rates – don’t get shaken out. Have been buying the gold stocks all the way down.

    MAY 13, 2008 – The housing stocks have bottomed but don’t have the “all clear” to buy. Don’t want to get near the refiners.

    MAY 30, 2008 – The action in the housing stocks may mean that things will get better for the homebuilders – watch for comments from Toll Brothers (TOL) and Hovnanian (HOV) when they report next Tuesday. If things have stabilized we could get a rally in the financials.

    JUNE 10, 2008 – Don’t be fooled by the rally in the bank stocks today – they are in real trouble because the Fed may decide to raise rates. Can’t get behind solar now. Don’t like any ethanol plays here.


    JUNE 19, 2008 – Would buy the natural gas stocks (see 6/18 Major Reiterations for names) after weakness today. Want to buy the steel and fertilizer stocks on any pullback. The banks (BAC, C, CMA, EWBC, FHN, HBAN, KEY, MI, NCC, BPOP, WB & WM) will have to raise more capital – would avoid.

    JUNE 20, 2008 (Dow down 220) – Don’t try to bottom fish housing, autos, banks or the retailers. Like agriculture, minerals, mining, aerospace & defense, infrastructure, and particularly the petroleum complex including natural gas, crude, and the related service companies. Natural gas goes higher.

    JULY 02, 2008 (Dow down 167) – The market selloff is not done because of global economic slowdown fears. It’s time to sell some of the winners and raise cash. Natural gas prices will go higher, but the natural gas stocks are in a periodic pullback that could get vicious. Sit tight with them if you ar a longer term investor. Don’t like the refiners.

    July 09, 2008 (Dow down 237) – Don’t bottom fish the financials – the bloodletting is not over. Healthcare will be in favor by the fund managers.

    JULY 14, 2008 – You can’t own the financials or the homebuilders. There will be more and larger bank failures than IndyMac. If you own a bank stock selling at $5.00 or less, it’s not too late to sell. Think Citigroup (C) goes to single digits. Gold, minerals and energy are in bull mode. The price of natural gas could double if its historic valuation vs oil (6-1) holds.


    JULY 16, 2008 (Dow up 277) – The rally today gives us an opportunity to reposition ourselves before the house of pain resumes. The banking system is failing – would sell the financials on strength. Would be a buyer of the natural gas stocks as they get clobbered. Think the two day decline in oil prices reverses tomorrow.

    JULY 21, 2008 – After seeing the quarterly reports believe that JP Morgan (JPM), Bank of America (BAC), Wells Fargo (WFC) and US Bank (USB) will be the survivors in the sector and will be able to buy up other banks as they fail – don’t see any anti-trust problems. Would buy the first three on weakness, but would buy USB now because it is down far enough. There will be more runs on the regional banks but the sector has put in a bottom. The natural gas stocks are too cheap.

    JULY 28, 2008 (Dow down 240) – There is no relief in sight for the market.

    JULY 30, 2008 (Dow up 186) – Do not think the market will revisit the panic lows of July 15th – it’s time to buy on the next dip because it may be the last one.

    JULY 31, 2008 (Dow down 206) – The market will not drop below the panic low of July 15th. Banking and housing have bottomed. It’s a signal that stocks should be bought on the way down.

    This was enough for me…. in my opinion, CNBC needs a clean sweep of all their on-air personalities and a general re-do of their programming format.

  8. ben22 says:


    didn’t you watch the immelt interview on the video’s link?

    They have $60 billion in cash(lie), no worries, that dividend comes from a different pool of money than the TARP funds.

  9. Charlatan:
    It just proves that people are guppies. Do you know what I’d do to a show or network that aired advertisements like the “In Cramer We Trust” ones? Run the other way. Fast!! Same way with CNN and their “Best Political Team on TV” crap. When a station has to start touting their own awesomeness, you know they’ve long since jumped the shark. After all, who are they trying to convince? You or themselves?

  10. VennData says:

    Making thumbs-up-thumbs-down picks on equities is a 50/50 proposition over the short, near, medium, etc… term. To think that Cramer’s show would turn out any other way is not logical.

    I’m part of the largest growth demographics after land-line-less, TV-less, yet I can still recall that any show that lasts more than three seasons is considered a resounding success ( mostly do to the ability to re-package as residuals. ) To be able to judge anyone over twice that time frame is pointless.

    Furthermore, Cramer may be under-performing. I would guess that anyone would be, and speculate… I love that word… they’d be doing even worse. …but if there were 10,000 shows one lucky chap would be knocking the lights out.

  11. tranchefoot says:

    Cramer is to pump-and-dump what Madoff is to the ponzi scheme. He supplies just enough populist rhetoric to win people’s trust and them pushes Wall St.’s unwanted shares on them.

  12. DL says:

    “…James Cramer, the former hedge fund manager now turned … game show host”.

    – and –

    “If you make investments based on a TV show, you deserve to … lose ALL OF YOUR MONEY”.

    Well put.

    Maybe there’s a way that Cramer could combine his show with that other CNBC show “Deal or No Deal”, for even bigger ratings.

  13. Bob A says:

    I have a pet rat named Cramer…

  14. JohnnyVee says:

    “Its TELEVISION, for crying out loud”. End of story. Cramer is on TV because of sponsorship not his prowess in stock picking. The guy is a clown for the adult-ish viewer.

    I once heard that 95% of all the people you meet are incompetent and that chances are the other 5% is too. I apply this saying to everything.

  15. Broken says:

    Don’t invest with the TV on. You will just get sucked into the herd mentality. Cramer is fine if you are only looking for entertainment, but stay away from your order screen.

    In this market, momentum is great if your reaction time is measured in milli-seconds. I prefer anti-momentum. When the market is tanking, buy. When it rallies, sell.

    During this Bear, many good stocks have cliff-dived to lows that are silly. 80% and 90% declines, but they they don’t stay their for long. Wait for the momentum and it is too late. I have made good money off STLD, DSX, TEX, HTZ, FCX, RS, and others by buying on the 80%+ off sale. Bottom feeding works (so far) in this market.

  16. Groty says:

    I lost respect for Cramer after he stopped wearing diapers and biting the heads off spoungy animal toys.

    But the guy is a genius. He gets paid to do a stock show in which he never misses a chance to either pump the books he’s written, make a reference to TheStreet.com, or promote the positions he holds in his charitable trust.

    I view it as a kind of informercial for Cramer Enterprises.

  17. Davey says:


    Do you really believe that the average Cramer viewer is watching just for fun? I am sure that they do enjoy the entertainment, but Cramer’s stock picks have been shown to pop after he endorses them. I do not believe that the average viewer is just watching for fun. They are looking for investment ideas, and Cramer’s record (despite his protestations about how to measure him) are not that good.


    I know that the data is old, but I am making a point – he simply has too many recommendations to make his show work and therefore he underperforms. Assuming that, with all of his other CNBC commitments, he is actually able to do any real financial analysis.

    I sincerely doubt that the average viewer knows anything about what I just discussed.


    BR: I don’t know why they watch, but if they think TV is a substitute for learning the craft of investing, then they are sadly mistaken. They deserve to suffer the inevitable portfolio whackage they will get.

    There is no free money, and if you think there is, and you can find it watching tv, well than that is just sad . . . pathetic, even.

  18. Tripower says:

    “most people should just put their cash in bank CDs. Investing in financial instruments has nothing to do with science and everything to do with luck. BTW, I think momentum is a primary component of many scientific investment systems, especially those that take the emotion out of decision making..”


    Well there is one simple to invest in the stock market using a long-term timing signal as proposed by Karl Denninger. When the 20 week moving average goes more than 1% above the 50 week moving average, you buy an S&P 500 index fund. When the 20 week falls 1% below the 50 week, you sell and convert to short term cash investments.


  19. Mich@TBP says:

    I wrote in the wrong entry, here it is again:

    Barry, this is the same thing as your beloved “media indicator”

    What you see as media indicator (albeit in a smaller scale with Cramer), is actually two things:
    - Front running by people who knows the broadcast/article is coming
    - Fund managers talking their books to media (stock tipping them) so they get others to provide support for their bets at best, or help them liquidate at worst.

    Barron’s knows this, hence the charts they provide, because THEIR PEOPLE do it too

    Front running, insider trading, book talking….pure corruption

    That is why one is better off never reading a single commentary or advise if they can’t help themselves but to read it at face value.

  20. Broken says:

    “Investing in financial instruments has nothing to do with science and everything to do with luck”

    Anyone who believes that should definitely stay away from everything but the safest of bonds. Not dissing you, I’ve been mainly in high-grade munis for years. Tax free 4.5% is looking pretty good right now. But, as Barry’s chart on ten-year stock returns suggests, stocks should outperform bonds this next ten year period.

  21. mlomker says:

    Glenn Beck sits in front of a microphone for an hour per day and he has 40+ staff. Do you think Cramer does his own analysis? He has ‘people’ for that.

  22. I-Man says:

    Cramer is awesome…

    Theres a ton of money to be made fading his picks, in fact I’m almost sure there are desks out there that play that game everyday.

    You can probably run a hedge fund doing nothing but fading Cramer picks.

    Dude is a pretty good writer though, I will give him that, not to mention an insanely good businessman… I mean seriously, we’re all here talking about him right???

    I really enjoyed reading “Confessions of a Street Addict”… until he went into the whole saga of taking TSCM public anyway… its a good read.

  23. blackvaultcm says:

    Jim Cramer is one of the worst performers alive. Just yesterday he listed his top ten reasons as to why the market is turning around and the economy is much better. Some of these reasons are a complete joke, it’s like he couldn’t come up with something.

    here are his reasons as to why you should start buying…

    There is also a video on the site that is a compilation of some of the worst calls by Cramer…such as telling people to buy things even though they are overvalued (back when market was at 14000) and that people should buy bank stocks just before the collapse.

    yeah he really makes money for you.

  24. loan shark says:

    The Soupy Sales of Wall Street. My 2 year old loves him. He’s a cartoon. At least he keeps his political/historical pretensions and ignorance to himself.

  25. dead hobo says:

    wswainwright Said:
    February 7th, 2009 at 12:09 pm

    Infotainment at it’s best…

    CRAMER prognostications: (FOLLOWED BY ABOUT 100 long predictions, it’s that really long post above)


    If obsession about Cramer in this amount of detail is how you spend your days, then your life is much worse than mine. Perhaps you should learn a new trade, such as drinking while cooking, or drinking while watching tv, or public drunkenness, or sleeping it off. All of which are far more productive than being a groupie of a tv star and then whining about how jealous you are of his success. Name 1 who does a better job. The others are just sales personalities.

  26. Charlatan says:

    BR, a few weeks ago, you posted a video in which Cramer really flubbed the whole housing situation (“subprime is no big deal” etc.). The video was inexplicably pulled within minutes. Two Questions: (1) Did you post that video purely for our entertainment, or did you also seek to provide a more truthful portrayal of Cramer than we get from the mainstream media (gotcha!) (2) If the video had shown Cramer making a good call, would it have been inexplicably pulled? (gotcha again!)

    Sorry, BR, but you’re off base on this one, and even your most loyal readers know it. Just because it would be foolish to invest based on a television show doesn’t mean that exposing a big, fat phony is trivial or irrelevant.

  27. [...] I discussed why the Barrons vs Cramer debate was irrelevant, and why people should never invest based on what [...]