Dylan Matthews, guesting at Ezra’s place, provides this handy dandy chart to track Jim Cramer’s predictions on the Dow:
He concludes,
Actually, I’ll give Cramer some props. With the small exceptions of Boeing, GM, and IBM, the market tends to do the reverse of what he anticipates. Remember that Seinfeld episode where George decides to do the opposite of what his instinct tells him, and his life instantly improves? Cramer’s investment advice is kind of like that. You can make some money with it, provided you short the stocks he likes and buy the ones he tells viewers to sell.
Now, to be fair, these predictions are for a very short period and a particularly volatile one. So, perhaps Cramer has been much better over the long haul.
On the other hand, Cramer isn’t merely a prognosticator, he’s the host of an insanely popular (by the standards of CNBC, anyway) host of an investment show. Presumably, an not insignificant number of people actually go out and buy and sell based on Cramer’s recommendations. So, Cramer’s actual predictive skill for the charted period is inflated by that fact — meaning, his predictions would be even worse if he were writing them down and not influencing events!
