An "Expert" Debunked

Ok, before I get a gazillion hate-monger comments or emails on this post, let me state the following:

1. I don't have anything personally against Jim Cramer (the current host of Mad Money on CNBC).
2. I don't regularly watch Jim Cramer (I'm not a "hot stock tip" kind of guy -- I prefer to buy and hold).
3. I know lots of people who follow him almost religiously.

So I'm not on any sort of personal vendetta against Jim Cramer, so if you happen to like him (or you are him and stop by this blog), please don't take the following personally.

With those disclaimers out of the way, let me say that what I don't like are financial "experts" who claim to have some sort of expertise and give people advice as if it's factual or even worth anything.  Really, many of these "experts" are simply good TV personalities.  They draw ratings, so they stay on the air.

So it's with much delight when I find a post like the one titled Deconstructing Cramer today.  Here are my two favorite highlights:

"Mr. Cramer is right about 50% (25 out of 51) of the time with his stock market predictions, prone more to headline hyperbole than equivocation."

"In summary, Mr. Cramer's stock market calls since May 2000 have low consistency and approximately coin-flip accuracy. He seems more an entertaining (to some) stream of uncalibrated opinion than a stock market maven."

Jim Cramer and other "experts" like him are the main reasons I started this blog -- to promote solid, proven money management ideas and to combat the "experts" out there who think they know better than you do how to manage your money.  Don't be fooled by them or take their advice at face value.  Learn the principles yourself so you'll be fully equipped to be your own financial expert.

Comments

[Barry Ritholtz]

One of the key myths about investing is that stock pickers need to be right very often.

Here's an interesting discussion about the concept:

Expect to Be Wrong http://www.thestreet.com/comment/barryritholtz/10215965.html

[baselle]

As I always say when I'm confronted by a friend who believes that someone on TeeWhee is a financial genius -

If they're such a financial genius, why do they need the regular TV gig?