I see a lot of bashing on Jim Cramer's Picks, so I decided to make a journal using the strategy I think you can win with trading Jim Cramer Stock Picks. First of all, its clear to me at least, that when JC recommends a stock he doesn't expect you to just sit on it and wait for good things to happen, you have to do your HOMEWORK, not every pick is GOOG or UNH. There are a few rules to follow when trading this strategy though, here they are: 1. Trade only his discussion segment stocks. Never take advice from the lightning round, he didn't have time to research this material and the advice is for the show (theatrical), not for you. 2. Concentrate on his 5 most stressed stocks in the discussion segment (sometimes there will be less, sometimes more), it's like a class and the teacher emphasizes what you really need to know for the exam, Cramer will mention a few stocks but he definitely stresses on in particular, thats the one you need to trade. 3. if you missed the show you can get his picks from www.madmoneyaddict.com, they list all his picks and which part of the show they are from. 4. Only take buy recommendations, not a positive mention or a sell (to short), only take buy recommendations from JC. Ok now to the strategy. It's definitely simple. Attached is the spreadsheet I made using this strategy, it will be easier to read once you see whats going on here. 1. Cramer mentions a stock and its one of the top five mentions, you buy the stock at the open the following day, simple. 2. Put $5,000 into each position you take. 3. 5% upside, 2.5% downside to every pick, thats where you need to place your limit orders and your stop orders. 4. Wait for your stops and limits to be hit. Ok so how much money would it take to trade this way? I'd say you'd need about $100,000-200,000 in buying power. It might be a lot of money but if you have it and want to try out a cool new strategy pay attention to this journal. So far this week 55k was the maximum invested in the markets. Here's a spreadsheet for the picks since Monday's show. Some of the cell's are using msn stock lookup add-in so if you don't have that feature it might not show up well, you can go to microsoft.com to download it.
Great thread idea and spreadsheet. Hope you can $ucceed with this new (spam-free?) journal. Having effused with that, do we now segue' to a commercial? http://www.elitetrader.com/vb/showthread.php?s=&postid=875214#post875214 Any plan to eventually play the Open?...
Here is an update of the spreadsheet. I've included a summary page so you can see if its beneficial or not buy and hold or to buy and have a plan, hopefully over the course of 6-12 months this will be obvious. There is also a legend on the summary page. One thing to note, Cramer usually advices against buying at the open the following morning after he discusses a stock, simply because he moves the stock on average about +2.85%. We are disobeying Cramer on this one but I still think we can make some money. As of 11:27am on friday here is what we have. Realized: $2,163 Unrealized: $(39) Total: $2,124 Maximum $$ in market at one time was $55,000, currently holding 5 positions for $25,000. Booyah!
Cramerholic, Thanks for posting this, I've always wondered it his picks made money or not. Nice to see someone tracking them and letting us all see the results. DS
Cramerholic, Great spreadsheet! You're price at open column, is it the actual price the stock opened the next day or when YOU actually opened the position? Are you actually trading these or just tracking them? Thanks.
That's the actual price at the open the following day after the show. If I were to actually wait a half hour after the open I could probably get a better buy since cramer's MoJo makes the stock gap up so high then it later retraces. It's a gift if a cramer stock doesn't gap up the following day and you should take advantage of it. I trade the stressed stocks, or his opening show picks. ESLR: Winner $250 SIRI: Still holding, unrealized $32 KYPH: Winner $295 ATVI: Loser $(125) Total: $452 I would definately be trading all of them though if I had the money, hopefully that will be sooner than later. But in the meantime I will keep tracking this for a year, then we can really have a testament of how well cramer does.