Why am I angry at Cramer today? Because yesterday he committed the same crime he commtted in 2008 that cost so many people their life's savings – he told people not to sell their stocks on a pullback. "Don't take profits" is the message for the viewing public. But, I would ask, if people don't take profits – when will they ever get profits? What kind of stupid message is that? Well, it's the message that leaves you holding the bag while his hedge fund buddies head for the exits. It's not much different than telling one group of people not to leave a burning building while you make sure all your friends are getting out safely.
"This is not just my opinion. I can prove it to you empirically. See, as I was preparing to write my book "Get Rich Carefully," I went over the previous five years of trades made by my charitable trust. And as I reviewed those trades I noticed that far too often, my good judgment would be overcome by excessive skepticism."
If the "proof" Jim is talking about is his Action Alerts Plus, then I'd say you really should think long and hard about following his advice here (via Kirk Lindstrom – who does compete with Cramer):
I guess, sure, Jim legitimately should regret that he wasn't more bullish from 2008 to 2013, when the market popped 200% and his trust gained about 100% but don't you think the lesson Cramer should be taking from that experience is to CUT YOUR LOSSES, not…
Some rather scary predictions out of Paul Farrell today: "It’s inevitable: Wall Street banks control the Federal Reserve system, it’s their personal piggy bank. They’ve already done so much damage, yet have more control than ever.Warning: That’s a set-up. They will eventually destroy capitalism, democracy, and the dollar’s global reserve-currency status. They will self-destruct before 2035 … maybe as early as 2012 … most likely by 2020. Last week we cheered the Tea Party for starting the countdown to the Second American Revolution. Our timeline is crucial to understanding the historic implications of Taleb’s prediction that the Fed is dying, that it’s only a matter of time before a revolution triggers class warfare forcing America to dump capitalism, eliminate our corrupt system of lobbying, come up with a new workable form of government, and create a new economy without a banking system ruled by Wall Street." And just like in the Hangover, where the guy is funny because he’s fat, Farrell is scary cause he is spot on correct.
Handily, Farrell provides a projected timeline of events:
Stage 1: The Democrats just put the nail in their coffin confirming they’re wimps when they refused to force the GOP to filibuster Bush tax cuts for billionaires.
Stage 2: In the elections the GOP takes over the House, expanding its strategic war to destroy Obama with its policy of “complete gridlock” and “shutting down government.”
Stage 3: Post-election Obama goes lame-duck, buried in subpoenas and vetoes.
Stage 4: In 2012, the GOP wins back the White House and Senate. Health care returns to insurers. Free-market financial deregulation returns. Lobbyists intensify their anarchy.
Stage 5: Before the end of the second term of the new GOP president, Washington is totally corrupted by unlimited, anonymous donations from billionaires and lobbyists. Wall Street’s Happy Conspiracy triggers the third catastrophic meltdown of the 21st century that Robert Shiller of “Irrational Exuberance” fame predicts, resulting in defaults of dollar-denominated debt and the dollar’s demise as the world’s reserve currency.
Stage 6: The Second American Revolution explodes into a brutal full-scale class war with the middle class leading a widespread rebellion against the out-of-touch, out-of-control Happy Conspiracy sabotaging America from within.
Stage 7: The domestic class warfare is exaggerated as the Pentagon’s global warnings play out: That by 2020
If it doesn’t blow sky high right now it won’t at all?
I think this sort of nonsense is amusing.
"You’re fighting The Fed and Geithner right now if you hate stocks"? "We’ve seen P/Es come down so much…"
Huh? We’ve sold off ten percent and that’s a "big" P/E decrease?
You’ve got to be kidding me.
The entirety of the rally off the 2009 lows was predicated on the US borrowing and spending $1.5 trillion a year, or 11% of GDP, for the last two years!
The extreme volatility you’ve seen the last couple of weeks is not about Greece. Nor is it about Merkel, or Sarkozy, or any of the clown car brigade in Washington DC.
The volatility is the market debating whether governments worldwide can continue to borrow and spend 10% or so of their GDP on an ongoing, continual and perpetual basis.
It’s that simple folks, because the underlying economic fundamentals and private activity has not come back at all – there has been zero advancement in private activity sufficient to allow any pullback of that support!
If this cannot be continued, and the recent events in Greece strongly suggest that it cannot, then market prices are dramatically too high, as they reflect a fully-priced in "V" shaped recovery that is being created and sustained as a consequence of this deficit spending!
The bottom line is that simple, and yes, we will have a fulfillment of that debate soon.
Within 48 hours? Not a chance.
But in the near future? You bet, and if the resolution of that debate is that governments will have to withdraw their artificial "stimulative" measures due to inability to sustain the deficits then that repricing will continue in earnest – in that event it is nowhere near over.
The complacency in the market is now reaching a fever pitch. It always amazes me that investors can be so bearish near the bottom and then be so incredibly bullish after the market has risen so substantially. On January 28th I said the market was not forming a major market top and that the downside was “more likely a correction within the uptrend”. At S&P 1,140 I went net short for just the second time in the last 12 months. With our H1 outlook largely playing out as expected I now find myself wondering if we are in a euphoric blow-off top and on the wrong side of the trade….
Mad Money started 5 years ago on CNBC. I vividly remember seeing the show when it started because it began right around the same time when the great Louis Rukeyser got sick. My first thought was: “there is something seriously wrong with the market if its participants are willing to listen to a man banging on buttons and acting like a lunatic.” The power of Cramer over the years is undiminished and leaves me wondering exactly the same thing today. Cramer is a good investor and a GREAT salesman, but you just have to wonder after 5 years – the market is flat over the same period – have any of his viewers actually come out on top after taxes and fees? My guess is very few….Investing is not a joke. It is not entertainment. I am not sure why anyone thinks it is okay to make it seem that way.
While I continue to think the VIX is a sign of near-term complacency you just can’t help but wonder if investors are still too fearful in the long-term. The majority of investors still don’t have an ounce of faith in the recovery and this is reflected in the historically high VIX. In the past two recessions, the VIX did not reach its historical low of 10 until at least 3 years into the recovery. Perhaps most important, the market rallied this entire time.
Democrats as far as San Francisco are freaked out by the fact that a fellow party member could lose in Massachusetts.
Mayor Gavin Newsom told the San Francisco Chronicle: "We better get our act together – and quickly… (voters) are so angry. They don’t feel that we’re paying attention to their needs, in terms of their jobs, and what’s going on at the grassroots, in their neighborhoods."
It’s actually not all bad for Dems. A Coakley loss is an early wake-up calll, and there are several months before November elections for them to turn things around and get their message right.
No doubt the Democrats wish that in 1994, they’d had a similar warning. After all, they were largely blindsided by the Republican revolution of that year, predicting with only weeks to go before the election that they’d maintain control of the house.
Meanwhile, Martha Coakley is down to 31% on InTrade, which is around the odds that Nate Silver called for.
JIM CRAMER, MAD MONEY HOST: We know it’s earnings season. You can no more avoid it than you could avoid getting your report card or worse – your parents getting your report card. You saw that today when people sold the market on allegedly weak earnings from Intel and JP Morgan, emphasis on allegedly. The Dow getting hurt bad, down a hundred big ones. S&P giving back more than a percent. But that doesn’t mean that the most important factor in next week’s game plan is an earnings report. Far from it. Come with me. The number you need to watch is the number that Scott Brown racks up against Martha Coakley in this amazing Massachusetts Senate race. I say amazing ’cause this was supposed to be a walkover. I mean, even a few weeks ago it was a lock for Democrat Coakley. But now everything’s up in the air, and a Brown win would be devastating for the president’s agenda. Let’s put Brown, okay, and I don’t mean UPS which I happen to own for my charitable trust. Particularly on healthcare reform, because Republican Brown has said he will definitely vote against the plan.
Brown in the Senate? That wrecks the 60-vote supermajority the Democrats have been counting on. It could spell the end for this almost year-long nightmare of a piece of healthcare legislation.
What does a Brown election mean larger than this? Well, first you’re going to get a knee-jerk rally in all the so-called penalized stocks — the HMOs, the drugs, the medical device-makers. I call it "knee-jerk," though, because these stocks have been on fire for months. Look at Cramer fave WellPoint, or United Health. 52 week high. 52 week high. Merck, 52 week high. It’s been clear as a bell that the healthcare reform wasn’t going to affect most healthcare stocks. That’s versus what we thought last year.
More important, though, I think investors who are nervous about the dictatorship of the Pelosi proletariat will feel at ease, and we could have a gigantic rally off a Coakley loss and a Brown win. It will be…
Case and Shiller have one. Dow and Jones have one. Black and Scholes have something similar…
Wall St. Cheat Sheet is proud to introduce our first proprietary index: The Cramer-Roubini X-treme Index. After toiling with quantum proofs and a stack of “For Dummies” books for years in the basement of Duke University’s Lilly Library, we have finally produced the perfect blend of Doom and Boom suffused with a subtle hint of X-Games adrenaline.
Unlike the VIX or other sentiment indexes which somehow fell into the shit pit during the Great Markets (Housing, Stocks, Credit, Oil, etc.) Crashes of 2008, The Cramer-Roubini X-treme Index held up like a Viagra induced E! party on The Girls Next Door. That’s right. While those old bags Dow and Jones couldn’t tell you what the hell was happening, our needle jolted from Cramer to Roubini faster than food passes through an American tourist who just ate a spoiled egg in Thailand.
By now you’re probably scratching your head trying to reverse engineer our black box indicator (which, by the way, is available to institutional and accredited investors for annual licensing at the bargain price of the US National Debt divided by 100). Don’t give yourself the mathematician’s cold sweats or the Bible Code mystic’s shiver. If you’re not an institutional investor or don’t qualify as an accredited investor, please read on (if you are one of the aforementioned investors, please pay now)…
The secret to our indicator is its lack of cutting-edge technology. We employ a Luddite style system where a handful of college interns sit in front of 52″ flat screens 24 hours a day, 7 days a week watching CNBC, Bloomberg, and FOX Business. Each time an unpaid viewer sees either Cramer or Roubini, he or she registers the viewing by clicking a baseball umpire’s out counter. We know it only goes to three, but we’ve hired some cum laude quality interns to do the higher math on paper from our recycling bin.
At the end of each session, we tally the Cramer and Roubini sightings on a huge chalkboard. Whoever has the most appearances on the three networks plus comments as “experts” in major print media outlets (which are monitored overseas, but that’s a story for another article),…
Recently, my email has been full of all sorts of Cramer-Spam, with stories about all these great stock picks he made. Here’s a sample of bullet points from emails from "Jim Cramer (firstname.lastname@example.org)":
Model Portfolio Outperforms S&P 500: 134.79% Total Average Return*
On January 20th, I bought Goldman Sachs at $60. When it hit $85 on January 28th, I trimmed my shares, locking in a 41% gain
I bought GE at $8.78 when everyone thought it was going bankrupt — and now it’s up 50%.
My subscribers were right on hand as I bought NKE for $44 on March 19th, watched the stock skyrocket, and pocketed my profits on June 2nd for a return of 34%.
RealMoney recommended China Green Agriculture (CGA) when its shares were trading at $5. The stock closed at $8.09 and subscribers who followed our advice netted a 61.8% gain
RealMoney advised subscribers to buy shares in Darling International (DAR) when the stock was trading at $4.54 a share. The stock then closed at $6.60. Once again, RealMoney nailed the market with a 46% return.
P.S. I can only extend this offer to you for 48 hours so please do not delay…. you have absolutely nothing to lose when you take us up on our $129.95 offer
Notice his example picks have an average return well above anyone’s hurdle rate, with returns of 30% to 134.79% (love than .79). It’s funny when people sell penis enlargement pills online for $50 because its silly and not a lot of money, but as John Stewart noted, the stock market isn’t a game. This is disgraceful and CNBC should be aware this makes them part of his scam. It simply isn’t plausible that 30%+ returns are representative, and they know that, and suredly would say they didn’t mean every return is this high, but it’s like lottery ads saying ‘anyone can win’—true enough, but highly misleading.
The following is from my book on stock recommendations, where I note that in contrast to standard asset pricing theory, ALL stock recommendations promise above average returns. In theory, half of all stocks should be recommended with below-average returns because they have good ‘risk adjusted’ returns, but this doesn’t happen. That this never happens highlights a
Good news! The rate of the price decline in the housing crash has finally begun to ease.
Bad news! Prices are still falling 18% year over year.
Specifically, in April, according to the Case Shiller index, the rate of decline in nationwide house prices eased slightly in April--to 18% from 19% in March. The rate of decline has hovered around 19%-20% for the last several months. And prices have now declined a staggering 33%-34% from the peak.
As we’ve noted over this period, before house prices can start recovering, they have to stop falling. And the first step toward prices stopping falling is a decline in the RATE at which they are falling. And we are finally beginning to see that.
But we’re still talking about an astonishing rate of collapse. And we’re still looking at a peak-to-trough decline of at least 40% and probably closer to 50% nationwide, which would be unprecedented. And even today, with prices down 33%-34% from the peak, prices are still above fair value.
So the folks who use this slight moderation in the rate of decline to spin tales of a "bottom" or, worse, a "recovery" are smoking something. Prices have at least another 10%-15% to fall, and they’ll likely be falling for at least another year or two.
Here’s the small uptick in the rate of decline:
Prices have now rolled back to mid-2003 levels. They’ll likely be back to 2000 levels before we’re through.
And here’s the positive spin from the S&P press release (always look on the bright side!):
The 10-City and 20-City Composites declined 18.0% and 18.1%, respectively, in April compared to the same month in 2008. These are improvements over their returns reported for March, down 18.7% for both indices. For the past three months, the 10-City and 20-City Composites have recorded an improvement in annual returns. Record annual declines were reported for both indices with their respective January data, -19.4% for the 10-City Composite and 19.0% for the 20-City Composite.
“The pace of decline in residential real estate slowed in April,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “In addition to the 10-City and 20-City Composites, 13
After years to Jim Cramer bragging about what a great stockpicker he is and of choruses of Mad Money viewers grousing about the opposite, the issue has been settled.
Paul Bolster and Emery Trahan of Northeastern University have done an exaustive analysis of Cramer’s Mad Money stock picks from 2005 to 2007 (pre-crash).
Cramer’s not an awful stockpicker!
Unfortunately, he’s not a particularly good one, either.
In fact, once you adjust for the various style factors that explain most stock returns (market, small/large, value/growth, momentum), Cramer’s stockpicking is pretty much in line with the index. In other words, he’s average.
Also, in contrast to one of Cramer’s refrains about the mediocrity of passive investment strategies like Jack Bogle’s, once you subtract the costs of trading and taxes (not to mention the incalculable cost of having to watch Cramer’s show every night), you’d have been better off in an index fund.
Individual investors have an incredible variety of sources for investment guidance. These
include internet blogs, financial publications, books, newsletters and, of course, television
shows. We examine a relatively new but widely popular source of investment advice,
buy and sell recommendations made by Jim Cramer on his popular nightly Mad Money
show on CNBC… Overall, the results suggest that, while Cramer may be
entertaining and mesmerizing to many of his viewers, his aggregate or average stock
recommendations are neither extraordinarily good nor unusually bad.
Bolster and Emery’s study is embedded below. Here are some of the interesting points.
On a gross basis, Cramer’s picks actually did quite well, especially relative to the S&P 500. Cramer’s "portfolio" (as constructed by Bolster and Emery) returned 12.1% per year, versus 7.4% for the S&P, providing lots of fodder for those who say he "beats the market." This performance was before trading costs and taxes, however. And the comparison to the S&P also does not take into account the type of stocks Cramer likes to buy (generally, small cap, value, and momentum stocks, which, as a group, outperformed the S&P).
After pesonal spending growth slowed modestly one month ago, rising 3.8% Y/Y, in August US consumption once again disappointed, staying flat in the month, below the 0.1% expected sequential rebound, although this was offset by an upward revision to the last month's data from 0.3% to 0.4%. On an inflation adjusted basis, as feeds into the GDP beancount, Real PCE dipped -0.1% in August, well below July's 0.3% bounce, missing the expectation of a 0.1% rise while the Core PCE Index was inline with the 1.7% expected on a Y/Y basis.
At the same time, Personal Income was in line with expectations, ...
The following are the M&A deals, rumors and chatter circulating on Wall Street for Thursday September 29, 2016:
Qualcomm Said to be in Talks to Acquire NXP Semiconductors for $30B+
Qualcomm Inc. (NASDAQ: QCOM) is said in talks to acquire NXP Semiconductors NV (NASDAQ: NXPI), according to sources as reported by Dow Jones on Thursday. The sources said a deal, which could happen over the next two to three months, would likely be valued at over $30 billion, though NXP's market cap was already over $32 billion following the report.
By insidesources. Originally published at ValueWalk.
IRS Walks Tightrope in Plan to Use Private Debt Collectors
The Internal Revenue Service is looking to use private contractors to help collect tax debt but some warn there is a risk of increased scams and abuse.
The IRS announced its intent to use private debt collectors Sept. 26 in response to a congressional order. The federal agency hopes to have the program operational by spring. The idea could help the agency to more efficiently collect tax debt, but it might also be opening the door to fraud and abuse.
“What makes it worse is the prevalence of these scam artists who call pretending to be IRS collectors,ȁ...
U.S. stocks fell as banks retreated amid growing concern that Deutsche Bank AG’s woes will spread to the global financial sector. Health-care shares sank on speculation tighter regulations will crimp profits.
In early 2009, the seven largest publicly traded college operators were worth a combined $51 billion. Today, they’ve been all but wiped out.
When Barack Obama took office, America’s seven largest publicly traded college operators were worth a combined $51 billion, with more than 815,000 students enrolled at campuses spread across the country. The schools were flooded with with people seeking shelter from the recession, returning to school to pick up new skills.
Almost eight years later, the industry has been decimated. The seven largest listed operators are worth just over $6 billion, and the most valuable co...
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I was so pleased yesterday by the announcement that I have joined the Research team at GoldCore as it meant that I could finally start talking about it and was back in a role that lets me indulge in my passion by researching and geeking out on all things gold, silver and money.
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Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer. One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."
Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.
Genetic components are the DNA sequences that are 'inherited.' Some of these genes are stronger than others in their expression (e.g., eye color). Yet, some genes turn on or off due to external factors (environmental), and it is und...
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