Ĭramer and his family moved to Springfield Township, and he attended Springfield Township High School in Montgomery County, Pennsylvania, graduating in 1973. Ken Cramer (1922–2014), owned International Packaging Products, a Philadelphia-based company that sold wrapping paper, boxes, and bags to retailers and restaurants. "It surprised me that Jim was so passive.Cramer was born in 1955 in Wyndmoor, Pennsylvania (a suburb of Philadelphia), to Jewish parents, and is Jewish. I thought there were some points where Cramer could have done a better job of defending himself," Chen said. "I agree with most of what Jon Stewart was saying, but not all. "Investors became more cautious and skeptical about his recommendations," Chen said.Ĭhen said he thought Cramer could have done a better job in the now-infamous Daily Show interview with Stewart. He said he's finding that the price pressure effect was stronger in the early years of the show. "That means they bought options expecting the price to go down."Ĭhen says he's working on an update of his initial research and hopes to publish it later this year. There was trading against his recommendations using put options," Chen said. "There is some evidence that the option markets took advantage of the recommendations and bet against Jim Cramer's advice. "The stock price reverses eventually."Ĭhen said his research found indications that some traders were watching Cramer's advice carefully. It's what happens when what we call 'uninformed investors' push the stock price higher," he said. "It doesn't mean the stock has increased in value. "Based on his recommendation, people who bought those stocks and held them for a month would lose money," Chen said, explaining that it's called a price pressure effect. He said he found that depending on the size of the company, especially for smaller companies, after the Cramer recommendation, the stock price did go up, but then after three to four weeks, it headed into negative territory. Those bets could earn over 25 percent in a month, Chen concludes, at the expense of Cramer's fans."Ĭhen explained that he investigated stock and option markets reaction after Cramer made recommendations. 9 story about how Cramer's Mad Money recommendations were underperforming most measures of the stock market.īarron's reporter Bill Alpert wrote: "Chen found signs that the smart money bets against Cramer's buy recommendations by using short-term in-the-money puts. and international conferences in October, November and December, caught the attention of Barron's financial magazine. University of Dayton finance professor Carl Chen doesn't mind all the attention Comedy Central's Jon Stewart is getting for taking on Jim Cramer - even though Chen, in a quieter way, took on Cramer himself last year.Ĭramer, the flamboyant host of CNBC's Mad Money show, was the subject of a widely viewed March 12 interview on Stewart's program that accused the network of failing to adequately report issues leading up to the financial crisis.Ĭhen's research revealed last year that betting against Cramer's recommended stock picks could earn investors more money. Research from a University of Dayton finance professor helped make the case against CNBC's Jim Cramer.
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