Cramer Is Fun, Informative, and Mostly Wrong

With Wall Street in shambles, Jim Cramer’s ratings are higher than ever—which is fine as long as you ignore his stock picks, Bill Alpert writes in Barron’s. Cramer doles out thousands of buy/sell recommendations a year that consistently underperform the market. Alpert examined Cramer’s record from May to December last year, and found that while Cramer’s sells beat the market by 5%, his more numerous buys lost up to 10% more.

The only time Cramer’s bullish picks reliably rose was before he picked them—which suggests Cramer largely picks on momentum, and could explain his underperformance when the stocks revert to the mean. But CNBC refuses to acknowledge its star’s record. “You wrote a premeditated hatchet job to curry favor with your new bosses at News Corp,” a CNBC exec told Alpert. (More Barron's stories.)