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Sunday, December 4, 2022


Booya! Behold, The Inverse Cramer ETF Has Finally Arrived

For as long as we can remember – it seems like scores of years, eons, epochs even…people have joked far and wide on social media and privately in social circles about the creation of an Inverse-Jim Cramer ETF.

Now, not unlike Cramer himself, the joke is being taken seriously.

The same group that brought you SARK, the inverse ARKK Fund ETF (which by the way is up nearly 2x since its inception), have now filed for both an Inverse Cramer ETF, to trade under SJIM, and a Long Cramer ETF, to trade under LJIM.

In a prospectus filed yesterday, it says the inverse fund “is an actively managed exchange traded fund that seeks to achieve its investment objective by engaging in transactions designed to perform the opposite of the return of the investments recommended by television personality Jim Cramer”.

“Under normal circumstances, at least 80% of the Fund’s investments is invested in the inverse of securities mentioned by Cramer,” it says of its strategy. 

The filing continues:

The Fund’s adviser monitors Cramer’s stock selection recommendations throughout the trading day as publicly announced on Twitter or his television programs broadcast on CNBC, and sells those recommendations short or enters into derivatives transactions such as futures, options or swaps that produce a negative correlation to those recommendations.

The Fund’s portfolio generally is comprised of 20 to 25 equity securities not recommended by Cramer. To the extent possible, the Fund’s portfolio is equally weighted. The Fund may invest in securities with any market capitalization and in securities of issuers located in the United States and abroad.

Should Cramer recommend buying any of the securities in the Fund’s portfolio, the Fund will dispose of those holdings. Should Cramer recommend selling any of the securities in the Fund’s portfolio, the Fund will keep those holdings. If Cramer does not take any view on any of the securities in the Fund’s portfolio, the adviser retains discretion to sell positions once profit or loss targets are met, or market conditions such as large swings in either direction necessitate a sale and replace them with securities that meet the criteria of the Fund’s initial portfolio. Under normal circumstances, the Fund will hold positions no longer than a week.

It hasn’t just been the entire financial industry that has been mocking Jim Cramer for sport for years (well deserved – recall, Cramer has been caught on video admitting to manipulating securities and recommending Bear Stearns in the weeks before the bank went bust), it has been countless scores of market participants on social media, including the “apes” over at WallStreetBets. 

Cramer’s poor track record has even spawned its own Twitter account, the “Inverse Cramer ETF”, which tracks all of Cramer’s poor calls. 

Either way, we’re sure the new ETF will have no trouble attracting attention and investors. We also can’t help but wonder if this public acceptance of Cramer’s uncanny ability to get things wrong is finally a reason to start looking at taking him seriously.

Regardless, here’s one call we’re sure the inverse ETF is upset they missed out on…

This post was originally published on this site

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