Alexander
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Trading Cramers Mad Money Picks - 2005/11/13 23:13
For those of you who follow Jim Cramer's Mad Money Picks, there are some excellent sites available that tracks his picks so that you can get an unbiased record of how well they do. Here is an example of the trading record for Texas Instruments (TXN), as presented by http://www.Booyahboyaudit.com:
08/23 - flat screen winner 'til Xmas 32.00 new
08/24 - next day close 32.18 +0.56
08/26 - 1st Friday close 32.06 +0.19
09/02 - 2nd Friday close 32.50 +1.56
09/09 - 3rd Friday close 33.74 +5.44
09/16 - 4th Friday close 32.80 +2.50
09/23 - 5th Friday close 33.90 +5.94
09/30 - 7th Friday close 33.90 +5.94
10/04 - down 5.52% 32.01 +0.03
10/06 - having great quarter - buy here 30.53 -4.59
10/07 - 8th Friday close - monthly now 30.63 -4.28
10/17 - stock rocks - back it up 29.77 -6.97
10/19 - 2 thumbs up - way up 30.07 -6.03
10/24 - earnings beat - guidance disap'ts- buy at 29 30.92 -3.38
10/25 - down 7.66% - back up the truck here 28.55 -10.78
10/31 - back it up 28.55 -10.78
11/04 - 1st monthly close 30.95 -3.28
11/07 - B of A recommended stock after close 31.05 -2.97
As you can see, a good detail of information is offered (including any follow-up mentions Cramer makes on the show). Another excellent site is http://www.madmoneyrecap.com, which also offers Daily Summaries, Stock Ticker Lookup Tools, and a complete site search for any mentions of a particular site! Also recently available with excellent data is theStreet.com's Mad Money Performance section (http://madmoney.thestreet.com).
What one must really understand when looking to invest in Jim Cramer's picks is that many of these are meant as long term opportunities, however, in the short-term, many of these picks can easily get overbought. This is absolutely the WORST time to consider buying the stock! Although Cramer may be right longer term, the only reason it moved that day is because of his many followers jumping aboard hoping to make a quick buck, and unless new buyers come in very soon for some other reason, the stock will likely trade right back down to where it started.
Consider what Jim Cramer himself is telling you. He will not buy or sell a stock within 5 days of mentioning it on the show. Now, inherent in that statement what he's also telling you is that for a long-term portfolio he doesn't need to act any faster than that. In fact, he can gain valuable insight into the stock based on how it performs after it is mentioned on the show. For example, if a stock jumps after he mentions it, and every time it does try to dip back new buyers come in and bring the stock back up, that is an indication that his thesis - possibly long-term - but now more importantly in the shorter term - may very well be "right on the money", and possibly a good time to initiate a position. If, however, the stock merely jumps and falls right back with little or no new buying interest coming into the stock, that is also just as telling that perhaps this stock is just not ready yet, and now anyone who jumped aboard into the spike will bring the stock lower as they all liquidate their positions at increasingly losing prices. These will likely be the same people who the go on to send Cramer hate-mail. When all of this pressure capitulates into a panic in the stock, THAT is the time to consider your long term stock purchase/investment!
Cramer does have many good ideas and he definitely knows about stocks, and for that I too enjoy watching him and listening for new ideas that may interest me. But add a little common sense to the equation and you are on your way to a real winning plan.
Through analysis of his picks through sites such as http://madmoney.thestreet.com, http://www.booyahboyaudit.com and http://www.madmoneyrecap.com, along with tymoraPRO's shorter-term analytics, you'll discover that it's best to wait for the dust to settle after a stock gets pumped up and watch for a few days to see how trading unfolds. In fact, it may even set up an excellent shorting opportunity for more advanced traders to consider (note that through tymoraPRO, we notice that TRDO shown below is in fact a low float stock with a very low 17.85 million shares outstanding, and thus would NOT make a good short candidate for that point alone). And with tymoraPRO you'll have all the tools you need to best take advantage of all of Cramer's picks - not only for the long-term, but for the short-term as well.
Below is an example of a stock recently mentioned on Mad Money (TRDO), and how it performed shortly after...
To facilitate tracking some of Jim Cramer's Favorite Mad Money stock picks, you can also visit http://www.yourika.com/MadMoneyCharts.html, which creates a daily chart montage with notes, and also provides access to additional information and resources so that you can easily keep track of Cramer's picks for potential investment in the future.
Also be sure to check out the Trading Alert Highlights page consisting of live tymoraPRO alerts of Jim Cramer's Top Mad Money Stock Picks at http://www.yourika.com/tymAlertsMadMoney.html. If there's a stock alert that grabs your attention, you can even click right back to theStreet.com's site in order to check on Cramer's latest views on the stock.
For those who haven't already seen it, you may also be interested in the post on learning to deal with Stress, Fear, and Greed, which is especially important when trading and investing. It can be found at http://www.yourika.com/stresstips.
Also, you can click here to learn more about tymoraPRO and to sign up for a !FREE! trial: http://www.yourika.com
From there, you can also download the highly positive article on tymoraPRO that recently appeared in the November 2005 issue of Stocks and Commodities Magazine
As Cramer says too, you need to find yourself a deal that offers low commissions so as not to eat away at your profits. With a tymoraPRO package through our affiliated brokers, their fees are so low it's nearly like trading commission-free.
Post edited by: Alexander, at: 2005/11/24 23:42
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