Blodget Rips Jim Cramer In Slate Article

Stock-Picker Showdown: Blodget vs. Cramer
January 30, 2007, 8:22 am

http://dealbook.blogs.nytimes.com/2007/01/30/stock-picker-showdown-blodget-vs-cramer/


Henry Blodget has some harsh words for James Cramer, the popular market pundit who hosts CNBC’s “Mad Money” show. Writing in a column for Slate, Mr. Blodget, the former Internet analyst, calls Mr. Cramer “perhaps the worst thing to happen to the financial security of average Americans since the crumbling of the Social Security system”. And that’s before he really gets going.

In an aside to his column, Mr. Blodget mentions that the Mad Money Machine, a blog that reviews Mr. Cramer’s stock recommendations, calculated that Mr. Cramer’s stock picks returned 0.2 percent in 2006, as compared with last year’s 22.5 percent from a portfolio of passive index funds. But that apparently is not the real problem, according to Mr. Blodget, who argues that, given the poor odds that the amateur investor already faces in speculating on stocks, Mr. Cramer’s strategy offers mom-and-pop stock pickers too much risk with too little reward.

(We would also point readers to last year’s working paper from students at the Kellogg School of Management, which concluded that buying Mr. Cramer’s stock picks was a losing proposition.)

Mr. Blodget goes on to concede that, as sheer entertainment, Mr. Cramer’s show is “mesmerizing reality TV.” He also takes pains to say that Mr. Cramer is “smart.” In the end, Mr. Blodget seems to believe that warning about Mr. Cramer’s advice is a pointless task: “The more I thought about Cramer, the more I realized that pointing out that he gives terrible investment advice would be like pointing out that the sun rises.”

The excoriation by the former Merrill Lynch research analyst, who was sued by regulators and private investors for hyping research to bolster the fortunes of the firm’s banking clients, and ultimately barred from the securities industry, is not without some irony.

Mr. Blodget, who recently published “The Wall Street Self-Defense Manual: A Consumer’s Guide to Intelligent Investing”, has been the subject of some bitter opinion pieces. A few weeks ago, MarketWatch’s Wall Street columnist, David Weidner, expressed ire over Mr. Blodget’s recent punditry. Mr. Weidner said that it was a “sign of the apocalypse” that Mr. Blodget is allowed to comment on bad stock-pickers, adding that “Blodget himself lost a bundle in tech stocks.”

 

did blodget really lose his own money on tech stocks? i hadn't heard that.

but since it's become public (thank you, mr. spitzer!) that analysts often say things they don't believe, at the behest of their firms, it's pretty unfair for weidner to say "wow, he really didn't know anything". hope he publishes that same piece on joey donuts and all the others many of whom STILL HAVE THEIR JOBS. because their real job wasn't analysis, but selling.


although cramer's record isn't that of a "market genius", he's definitely not the worst thing to happen. he has a broad reach, which multiplies his effect, and is a wonderful contrary indicator when he goes super-gaga over stuff to either side - but most of his general information tends to be on target.

 

http://www.cramerwatch.org/

Leonard the Wonder Monkey Wins!

Since November 1, 2005, Jim and Leonard's overall records are:

Jim Cramer - 117 wins, 104 losses, 33 ties
Leonard the Wonder Monkey - 104 wins, 117 losses, 33 ties

Ongoing Stats:
Jim Cramer is right 49.41% of the time.
Jim Cramer's picks average a 0.18% ROI after 30 days.

Leonard the Wonder Monkey is right 49.38% of the time.
Leonard's picks average a 0.26% ROI after 30 days.

 

Still its a classic..."Pot calling Kettle Black" At least Cramer is NOT a crook. or at least a convicted one.

 

Personally, I wish Cramer would become the most influential stock commentator in America. For icing, I'd like to see Blodgett, Grubman, et al, resurrect and regain their influence.

ET members should recognize their own self interest in my wish. The dumber the money in the market, the better it is for small traders, i.e., ET members (or a fair cross section of them).

Just think of the dream scenario we are all missing because the Republicans have crapped out so baldly: privatized Social Security with Cramer & Co. leading the sheep.

Even those of us well down the food chain would have feasted. A pump and dumpers' ball to beat all.

(There's hope yet, of course, in Newt's possible run for the White House. Let's pray he runs and wins.)

 

Blodget is really a piece of work. The slimeball should be behind bars, he's barred from the biz for life, but he is offering criticism of others? And what does it say about Slate to give this POS a forum?

I don't mean to single Blodget out. There are plenty of others, including the one time "Internet Queen" who deserve the same treatment.

 

chood (are you of indian descent?) - i have a conflict because of what you say.

on one hand, i want (need?) more dumb money in the market. that's better for me.

on the other hand, i don't like sitting by quietly when people are misleading by implying they're great (and on this, i don't mean any one person - there's hundreds out there) and when their words / actions influence (tens of) thousands of people.

i sure hope a newt clone doesn't win - from the broader picture, i want a healthy america. there's always cleanup which should go on in washington - just with this administration, there's a lot more than normal.

 

How many here remember her name? Not many, I bet.

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...it was Mary Meeker.

 

Lighten up and don't worry. My dream scenario almost certainly won't come to pass. Why? The IF ("Idiocy Factor") hit its all-time high in 2000, a tremendous peak that is unlikely (sadly) to be repeated anytime soon (i.e., not in 2008). Just compare the touts of Cramer, Blodget & Co. that year to how their touted stocks have fared since, and lay that story side by side with the winner of the 2000 presidential election. An uncanny similarity of choices by the public and results, I'd say, one unlikely to be repeated.

 

I am still dumbfounded that nothing happened to her. She still has her old job. That must really frost Blodget. Merrill threw him under the bus, and she never really suffered anything.