He admitted in his first book that most of the money they made was by 1) finding a stock some analyst was thinking about upgrading 2) buy a big position 3) tell all the other analysts covering that industry that the first analyst was about to upgrade it and they'd better beat him to the punch 4) sell into the upgrade Suprisingly, Cramer gave up the hedge fund business pretty much when Reg FD came out. Coincidence? I think not.
1st - I agree with most all the preceeding posts Re: Cramer. To add a note Re: his Friday CAT call --> he actually did a complete 360 by going back to negative on his TV show. 2nd - Cramer is like many Wall Streeters who get incredibly puffed up (and rich) from exploiting PR -- REMEMBER Joe Granville anyone? 3rd - As eagle488 says "Money can be made on the Cramer Effect if you know what your doing." BUT BEWARE - BELOW ARE MY NOTES ON eagle488's observations: "First, the Cramer Effect does not last forever. Sometimes a day, sometimes a few days. Sometimes weeks. Usually the next earnings call calms things down a bit." FOR THE MOST PART THE "Cramer Effect" IS 1 TRADING DAY & THAT IS THE TIME FRAME THAT A CRAMER STOCK IS TAGGED AS SUCH ON THE FLOOR OF THE NYSE. "Second, the Effect only usually is good for thinly traded stocks with a small float. " Small float & thin trading always help move a stock when "news/events" come into effect, but he can also (temporarily) move larger equities witness CAT. "Third, the Effect depends upon how Cramer words his presentation." MAKES SENSE TO ME "There is also the other side of the "Cramer Effect". When the Effect finally wears off, it creates a nice V-Bottom. As the Cramerites exit out of their positions, it sets off all these stop-loss orders. The best example is DKS. If you got into DKS after it created the V-Bottom, then you would have had a very nice return today." REALLY MAKES SENSE TO ME & I'VE TRADED ON IT IN CONCLUSION - THE SELF-FULFILLING PROPHECY GAME STILL WORKS WITH THE SAME QUICKSAND SOMEWHERE ON THE ROAD TO FAME_GLORY_RICHES blue2and2