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Tracking Jim Cramer: Stellar February 2007 Performance

by: Michael Zhuang April 07, 2008 | about stocks: ADM / APKT / AVR / EMC / GLW / MA / MPEL / ORCL / SAP / THO / TIBX / VCLK / VMC / WHR    

Michael Zhuang

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Jim Cramer made 185 bullish calls and 86 bearish calls during the Mad Money Lighting Round program in February 2007. 102 of his bullish calls and 50 of his bearish calls turned out to be 'right' calls. A right/wrong call is defined by the following criteria:

  • Bullish: If a bullish call has a one year return higher than that of the S&P 500, it is a right call. If not, it’s a wrong call.

  • Bearish: If a bearish call has a one year return lower than the S&P 500, it is a right call. Otherwise it’s a wrong call.

The accuracy of Jim Cramer’s bullish calls is 55% and that of his bearish call is 58%. The combined accuracy is 56%.

The return numbers look even better. During the one-year period after Jim Cramer made his calls, the S&P 500 fell an average of 5.66%, his bullish calls on average fell by 1.64% and his bearish calls fell by 11.22%.

The table below shows Jim Cramer’s calls on 2/8/2007 and their subsequent one year returns. You may request a complete report of all of his February 2007 calls from MZ Capital.

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This article has 9 comments:

  •  
    Apr 07 09:19 AM
    It is one month out of 12 in one year. Does this mean that I should only listen to Cramer in February? How about a study on his overall record since the beginning?
    Reply
  •  
    Apr 07 09:28 AM
    Are you sure of your facts? I do not have a transcript of the February 8th broadcast but the week of January 25th Cramer was advising viewers to "sell, sell, sell" MPEL.
    Reply
  •  
    Apr 07 09:32 AM
    How did Leonard the Monkey make out? Last I checked he had the upper hand on Cramer.
    Reply
  •  
    Apr 07 09:57 AM
    IF CRAMER IS ALL YOU CAN WRITE ABOUT YOU ARE IN DIRE STRAIGHTS.AN ARTICLE I READ STATED THAT CRAMERS PICKS FOR 2007 WERE IN THE LOW 30%,THE AFOREMENTIONED LEONARD THE MONKEY CAN DO BETTER THAN THAT.DID YOU EVER HEAR OF INFORMATIVE JOURNALISM?
    Reply
  •  
    Apr 07 03:18 PM
    Cramer rarely advocates such a blind "buy and hold for 1 year" strategy. His usual holding period is much less. What does his record look like when measured over just a few months?
    Reply
  •  
    Apr 07 04:21 PM
    Peter Lynch: No, it is only one month. Beside, he had a dismal performance on Jan.

    neverenuff: The data is from seekingalpha. Jim Cramer does change his mind often.

    sniper6: Leonard the Monkey should do better over the long run than most people including Jim Cramer, because he is not emotional. I have no data to support the above statement though.

    ED: I am indeed in trouble if I only write about Jim Cramer. That's well taken.

    Steve: You can do that research and enlighten us. However, it is probably not worth your time if you are a serious investor.
    Reply
  •  
    Apr 07 04:32 PM
    Michael, you are right. Cramer frequently changes his opinions. But I went back and checked. Seeking Alpha does not have any references to Cramer discussing MPEL between January 25th and February 8th where he would have announced a change in his opinion.
    Reply
  •  
    Apr 07 05:33 PM
    Sorry Michael. I now saw that your entry was February 8th 2007. The annual return figures are now more relevant to me.
    Reply
  •  
    Apr 07 10:34 PM
    Why in the world would you judge Cramer based on the lightning round? Its clearly meant to give off-the-top-of-the-hea... responses and is there to keep interest from viewers. To suggest that investors blindly follow lightning round picks is to suggest that viewers are mindless robots. If you want to be serious, evaluate him based on stock picks in his prepared discussions.
    Reply
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