Mad Money's Cramer has a huge following, but few people actually profited from his advice, in the long term, and consistently. In fact, after reading this blog post, you probably will have an idea to outperform him, easily.
Let's take a look at the case why Mr. Cramer delivered something truly impossible -
On Nov. 20, 2012, Jim Cramer urged everyone to exit two stocks - HPQ and BBY - immediately. Six months later towards the end of May, HPQ was up 115.62% and BBY was up 124.64%.
Maybe the overall market has been on a tear and these two are just the laggards?
Nope. Out of the 749 stocks in the Wilshire US large-cap index, BBY was the 3rd best performer while HPQ came in 4th.
Statistically, the probability of being wrong enough to get two of the four best performers was 1 in 35,062.
But wait, things could get worse.
On Oct 13, 2009, Cramer published a book "Getting Back to Even", in which he recommended buying HPQ (out of 12 highlighted buys), between then and his Nov. 20, 2012 selling recommendation time, HPQ lost 73.83%. By that time, he switched position!
If you are a loyal star stock picker fan, you will be whacked twice!
Yet that's not the worst!
Here is why Cramer delivered something truly impossible -
Below are the top 4 performers out of the 749 large cap stocks in the past six months:
What were the recommendations from Cramer?
We already knew he recommended selling BBY and HPQ, how about the other two?
On Sept 20, 2012, he recommended getting out of GMCR and on Nov 2, 2012, he recommended getting out of NFLX!
Statistically, the odds of making four sell recommendations on what ends up being the four best performers out of 749 different stocks is 1 in 13.1 billion!
By comparison, the odds of winning the Powerball jackpot are much better at 1 in 175 million!
Instead of gambling in the stock market by following those star stock pickers, maybe you should try playing lottery!
Or playing against whatever those star stock pickers recommend?
Let's take a look at the case why Mr. Cramer delivered something truly impossible -
On Nov. 20, 2012, Jim Cramer urged everyone to exit two stocks - HPQ and BBY - immediately. Six months later towards the end of May, HPQ was up 115.62% and BBY was up 124.64%.
Maybe the overall market has been on a tear and these two are just the laggards?
Nope. Out of the 749 stocks in the Wilshire US large-cap index, BBY was the 3rd best performer while HPQ came in 4th.
Statistically, the probability of being wrong enough to get two of the four best performers was 1 in 35,062.
But wait, things could get worse.
On Oct 13, 2009, Cramer published a book "Getting Back to Even", in which he recommended buying HPQ (out of 12 highlighted buys), between then and his Nov. 20, 2012 selling recommendation time, HPQ lost 73.83%. By that time, he switched position!
If you are a loyal star stock picker fan, you will be whacked twice!
Yet that's not the worst!
Here is why Cramer delivered something truly impossible -
Below are the top 4 performers out of the 749 large cap stocks in the past six months:
- NFLX: 174.49%
- GMCR: 161.68%
- BBY: 124.64%
- HPQ: 115.62%
What were the recommendations from Cramer?
We already knew he recommended selling BBY and HPQ, how about the other two?
On Sept 20, 2012, he recommended getting out of GMCR and on Nov 2, 2012, he recommended getting out of NFLX!
Statistically, the odds of making four sell recommendations on what ends up being the four best performers out of 749 different stocks is 1 in 13.1 billion!
By comparison, the odds of winning the Powerball jackpot are much better at 1 in 175 million!
Instead of gambling in the stock market by following those star stock pickers, maybe you should try playing lottery!
Or playing against whatever those star stock pickers recommend?
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