Can We Profit Off Of Jim Cramer?

Before we go too far into this, we first have to find out:

 

Is he really that bad?

 

Why Is He Popular?

 

Jim Cramer is a product of great timing, and high charisma.

 

First off, he has the pedigree.  Harvard Law, Goldman Sachs, he’s no idiot.

 

But his flagship show, “Mad Money” debuted in 2005 on CNBC

 

This was great timing.  Apart from the 2008 GFC, which made monkeys out of everyone, it was early enough to where there was still no widespread social media (still in the MySpace days), so you could better control the overall narrative, especially when you messed up.

 

Make no mistake though, Jim got it hard.  Remember the John Stewart interview?   I certainly do.  Here it is below.

 

 

But apart from that, 2005 up until 2021 was a 16 year run of damn near unbridled prosperity in the markets.  A drunk baby throwing darts would have done well, and likely worshipped by Normie Nation.

 

But Jim was special, and a product of just the right era to flourish.

 

In the mid to late 2000’s, the US was still a pretty dopey nation, still drunk on the catchphrase culture ESPN gave us, and falling more and more in love with overly-gregarious personalities, despite their obvious shortcomings.

 

 

Ugh, what a time to live in Vegas, let me tell you.

 

But Jim had a flawless delivery, unlimited energy, a large soundboard, catch phrases galore, and was able to land top CEOs for interviews with ease.

 

But was he any good at picking stocks?

 

This was always up for debate.  Sure he wasn’t a losing stock picker, but nobody was back then, so a lot of people had authority which was unearned.

 

There were websites (because that’s all we had back then) tracking Cramer, and I don’t know what their criteria was, but the results were usually disappointing.

 

It didn’t matter though, ratings were off the chart.  Popularity may have waned a bit over the years, but Mad Money continued to be CNBC’s #1 rated daytime show, by a big margin.

 

After all, why spend all day watching droll market footage, when you can just tune in right after the close and watch a guy yell and scream for 30 minutes?

 

An absolute bullseye for the obnoxious, middle-aged, khaki-wearing American golf course crowd of the 2000s and 2010s.

 

Now Is Not Then

 

Today, interest rates are high.

 

There is no more free money floating around.

 

All of the innovation is in Web3 and AI, two sectors who aren’t fully adopted by the mainstream.

 

The bullish market runs we do see are hollow, and hard to stand behind.

 

It’s a bad time for stock pickers.

 

Especially really loud ones who just can’t stay off of social media.

 

People will out you, eventually.

 

 

And nowadays, with conditions getting even worse, if he gets one wrong, he gets it really really wrong.

 

An all-time great call. Legendary. pic.twitter.com/g6T3hSxbUd

— Inverse Cramer (Not Jim Cramer) (@CramerTracker) April 28, 2023

 

The above tweet was from the Inverse Jim Cramer Twitter account, one of the modern-day versions of the Cramer Tracker.

 

The man just keeps running into walls.  Over and over again.

 

Or so it would at least seem.

 

Are these Cramer-haters just cherry-picking?

 

If Jim gets one right, does it simply go ignored?

 

One company is bound to get to the truth.

 

And make a ton of money off of it.

 

Searching For the Truth

 

Last February, Tuttle Capital came out with two ETFs.

 

One is called, go figure, the Inverse Cramer Tracker ETF, ticker symbol SJIM (Short Jim).

 

Jim Cramer was publicly upset about this, but hey, it’s out there now.

 

But what most people did not know, is that Tuttle Capital also issued an ETF that goes long Jim Cramer’s main stock picks, ticker symbol LJIM (Long Jim).

 

But how do we know what he likes and what he doesn’t?  How does all of this get figured out? The founder stays tirelessly on top of Jim’s main calls to ensure fairness.  A good interview on this can be found HERE if you scroll down to the March 21, 2023 episode.

 

So which ETF is doing better?  LJIM or SJIM?

 

Let’s take a three month glance (the ETFs have only been out that long), and start with the S&P 500 via the SPY ETF for a control.

 

 

 

As most of us know, the S&P has gone up in the last 3 months.

 

Keep in mind, 5 or 6 stocks are keeping the entire market afloat, so it’s really not that strong, but we still officially have our control now.

 

Let’s go to LJIM:

 

 

It has underperformed.  Pretty badly too, if you consider how the S&P has risen.

 

Not what you want to see as a highly-paid analyst when the market is still going up overall.

 

In all fairness however, he can’t just pick FAANG stocks all day, and that’s where the actual gains have come from, but this is still not great.

 

So the SJIM must be doing well then, correct?

 

Remember, SJIM is not inversely correlated to LJIM, listen to the linked podcast episode for details.

 

But with all of his calamitous calls, SJIM has to be a goldmine, right?  Let’s see:

 

 

It’s down more!

 

I did not expect this, and neither did most of you I’d imagine.

 

Fading Jim Cramer has actually led to more loss than it would have been if you followed him.

 

Wow.

 

 

Where’s The Alpha?

 

If you don’t have access to the American market, there’s unfortunately no direct way to play ETF’s like LJIM and SJIM.

 

But if you do have access, and you think the market is going down like I do, remember, Jim is always going to think it’s going up.

 

And when he misses, he misses big.

 

Could be something there.

 

This being said, we would have still expected SJIM to have performed much better than it has so far, wouldn’t you?

 

But this battle is only three months old.

 

Not financial advice.

 

 

— VP