Understanding Jim Cramer Mad Money
Monday, July 27th, 2009Jim Cramer is out of his mind. When you see his shows, he likes to screams and jump about like a mad man.
But the investments he picked last year earned 12% compared to 6% average for the market by some measures, so maybe he is not so crazy after all.
A lot of investors love Jim Cramer mad money shows on CNBC that they like to watch it each week.
Jim Cramer was one of the few persons who can be followed and was listened by many people when the world was spinning out of control and the stock market was spinning down to the toilet and investors were panicking.
When a stock has started going up, Jim Cramer likes to ride it up and buy. His shows plan for the market to keep doing what is doing, so his mad money picks end to be aggressive.
Conversely, if a stock starts to fall, Cramer wants to dump it before it falls further. This is not a bad technique when the market is less volatile and the swings are slower and more predictable.
However, when market are going badly, they will go badly very quick and market can reverse direction all of a sudden.
One big problem Cramer has is when he interviews executives; he will normally recommend that you buy their stock. The executives who were being interviewed are usually those who have high dividend stocks only.
If you’re wondering on what stocks to pick, the best advices can actually be gained from Jim Cramer mad money shows, not Cramer’s recommends on those executives stocks. It really doesn’t matter even if you want to take India stock market even you live in the US.
It is clear there will be a short term jump in price for those stocks after he recommends it, as many people will run out and buy these stocks.
If you are quick on the draw, meaning you already bought those stocks just before he recommends it to people, you can do just the opposite, ready to sell when he says “buy”, that way you can expect to do very well.