Jim Cramer

Preamble: Jim Cramer is definitely a controversial figure. While an argument can be made on whether he is on the side of retail investors or not, what I really wanted to know was how his stock picks are performing. Surprisingly, there were no trackers for the performance of Cramer’s pick in his program (his program is Mad Money, for those who are not familiar).

Where the data is from: here. All the 19,201 stock picks made by Cramer are listed here. His stock picks are updated here daily. While Cramer mentions a lot of stocks in his program, I only considered the stocks that Cramer specifically recommended that you should buy or sell. (I have ignored the stocks where Cramer says he likes/dislikes the stock since I felt that it’s a vague statement and cannot be considered as a buy/sell recommendation).

Analysis: There were 725 buy/sell recommendations made by Cramer in 2021. Out of this, 651 were Buy and 74 were Sell. For both sets, I calculated the stock price change across four periods.

a. One Day

b. One Week

c. One Month

d. Price Change till date

I also checked what percentage of Cramer’s calls were right across different time periods.

Results:

Cramer made a total of 651 buy recommendations over the course of the past 4 months. If you had invested in every single stock, he recommended and then pulled out the next day, the returns were a staggering 555%. He was also right on 58.9% of the calls he made (Benchmark being 50% since anyone can pick a random stock and the probability of the stock going up is 50%). The weekly performance returns are also a respectable 42% but he was barely touching 50% in the percentage of right picks. One month from his recommendations, the stock return is an abysmal -223% and he was wrong more than he was right on his calls. The returns till date are also phenomenal with 446% return and Cramer being right a whopping 63.6% in his stock picks.

Cramer’s sell recommendations performed better than his buy recommendations across different time periods. This stat is particularly commendable since we were in a predominantly bull market across the last 4 months. 57.5% of the stocks he recommended as a sell dropped in price the next day with a cumulative return of -118.9%. This trend is observed across the time period with returns for the sell recommendations being negative. The only statistic that is working against Cramer’s sell recommendation is the percentage of right picks till date being only 42%. But still, the cumulative return for all the stocks was -206%. Please note that Cramer made only 74 sell recommendations against a whopping 651 buy recommendations during the same period of time.

Limitations of the analysis

The above analysis is far from perfect and has multiple limitations. First, Cramer has made a total of 19K recommendations in his program. I have only analyzed his 2021 recommendations. The site which provides the data is extremely limited in terms of how we can access the data. Also, currently, the data is pulled from street.com which was earlier owned by Cramer. They update the data every day after the show, but I could not verify if they go back and change the calls down the line (very unlikely with it being a large business). Also, for the return calculations, I have only used the closing price of the stock across the time periods. The returns can theoretically be higher if you consider the intra-day highs and lows.

Conclusion

No matter how we feel about Cramer, the one-day returns on both his buy and sell recommendations have been phenomenal. I started the analysis thinking that the returns would be mediocre at best as there were no trackers actively tracking the returns from his calls. But the data points otherwise. It seems that there is a lot of scope for short-term plays based on Cramer’s recommendation. Let me know what you think!

Google Sheet link containing all the recommendations and analysis: here

Disclaimer: I am not a financial advisor and in no way related to Cramer or the Mad Money show.