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This is nothing more than a money grab to the chat groups that made it popular to note in hindsight that Cramer was wrong. Picking against Cramer is no more di

by m3kw9 4y ago

This is nothing more than a money grab to the chat groups that made it popular to note in hindsight that Cramer was wrong. Picking against Cramer is no more different than picking against a random person with random picks, which is like 50/50 except you will pay some ETF fees to do so but you will at least have fun losing money like in casinos

jerf 4y ago
That's the case if Cramer is just an honest guy making his honest picks completely independently, and nobody with any power would even dream of using his platform to do anything untoward, because everyone with any direct or indirect ability to influence him is just so darned honest that they wouldn't dream of exploiting such a large pool of useful reputation. I don't know why I feel I should point this out. I'm sure it's completely true. Don't even know why it would cross my mind to wonder. The financial world is so honest and full of integrity that it's obvious that this is true.
- outworlder 4y ago
  You mean, hypothetically speaking, that Cramer would be gasp paid to promote specific stocks? Maybe when they are in a dire situation (or when insiders know it's going to be pretty bad pretty soon now™)? Yes, that would be bad.
  - kjs3 4y ago
    It doesn't have to be "paid" in any direct way. Cramer is an ex-Goldman Sachs, ex-hedge fund guy. He just needs to call up one of his old buddies and say "hey...Ima gonna tell the rubes to buy FooCorp tomorrow on the show". His buddies profit from knowing that early, and they do something 'nice' for old Jim down the road, like get him an 'exclusive interview' or something he can profit from. It's a racket.
    - linuxftw 4y ago
      The SEC prosecutes people for this type of thing. Much safer approach is to let your buddies buy first, then pump one of them. Lot's of plausible deniability. "Hey, every major fund has some XYZ, I just like the stock right now."
      - kjs3 4y ago
        Sure they do. But if the quid pro quo exists outside of the finance world (e.g. I tell you what I'm gonna tell the proles, you give me the inside scoop I can monetize on my TV show/podcast/tiktok channel) it's harder for the SEC to bring a case. It's not what they're set up for.
      - ghayes 4y ago
        Curious what the actual crime is there, assuming Cramer had no insider information about the company. Basically, how is this say different from Hindenburg research taking a short position then releasing a damaging report? Or me buying a company and then telling others to buy it, too?
        kortilla 4y ago
        You have to disclose that you have a vested interest. And even then you have to avoid transactions for a period of time after to avoid it being a “pump and dump”.
notahacker 4y ago
Whilst I tend to agree with your first point, assuming Cramer's picks are actually of random quality there is still one slight difference if lots of dumb money is picking stocks based on what he says on TV. Time the short right and the stock will be slightly overvalued based on everyone else's expectations because of dumb money inflows...
daveguy 4y ago
The most important parametes of the ETF will be what time delay and how long. I guess that's critical for any ETF, but the market almost always blips in Cramer's direction before reversing (and occasionally not reversing).
politician 4y ago
Since Cramer has a large audience, his picks function as a magnet that aligns the beliefs of some subset of that audience. If the effect is large enough, then trading against that effect can be worthwhile. It's exploiting the same alignment effect as companies that buy order flow from retail investor apps. Retail investors typically do not generally buy large amounts of a single stock over time to get the best price. By buying Robinhood's order flow, Citadel can trade against a counterparty whose behavior is generally known. The theory behind exploiting the gradient created by alignments caused by factors other than fundamental business performance is better than random.
kobalsky 4y ago
> which is like 50/50 on some cases it can actually be way worse. an inexperienced trader may end up losing money on a trade regardless if they picked the "correct" side because they usually have no exit strategy and they will inevitably screw it up.

by m3kw9 4y ago

jerf 4y ago

That's the case if Cramer is just an honest guy making his honest picks completely independently, and nobody with any power would even dream of using his platform to do anything untoward, because everyone with any direct or indirect ability to influence him is just so darned honest that they wouldn't dream of exploiting such a large pool of useful reputation. I don't know why I feel I should point this out. I'm sure it's completely true. Don't even know why it would cross my mind to wonder. The financial world is so honest and full of integrity that it's obvious that this is true.

outworlder 4y ago
You mean, hypothetically speaking, that Cramer would be gasp paid to promote specific stocks? Maybe when they are in a dire situation (or when insiders know it's going to be pretty bad pretty soon now™)? Yes, that would be bad.
- kjs3 4y ago
  It doesn't have to be "paid" in any direct way. Cramer is an ex-Goldman Sachs, ex-hedge fund guy. He just needs to call up one of his old buddies and say "hey...Ima gonna tell the rubes to buy FooCorp tomorrow on the show". His buddies profit from knowing that early, and they do something 'nice' for old Jim down the road, like get him an 'exclusive interview' or something he can profit from. It's a racket.
  - linuxftw 4y ago
    The SEC prosecutes people for this type of thing. Much safer approach is to let your buddies buy first, then pump one of them. Lot's of plausible deniability. "Hey, every major fund has some XYZ, I just like the stock right now."
    - kjs3 4y ago
      Sure they do. But if the quid pro quo exists outside of the finance world (e.g. I tell you what I'm gonna tell the proles, you give me the inside scoop I can monetize on my TV show/podcast/tiktok channel) it's harder for the SEC to bring a case. It's not what they're set up for.
    - ghayes 4y ago
      Curious what the actual crime is there, assuming Cramer had no insider information about the company. Basically, how is this say different from Hindenburg research taking a short position then releasing a damaging report? Or me buying a company and then telling others to buy it, too?
      - kortilla 4y ago
        You have to disclose that you have a vested interest. And even then you have to avoid transactions for a period of time after to avoid it being a “pump and dump”.

notahacker 4y ago

Whilst I tend to agree with your first point, assuming Cramer's picks are actually of random quality there is still one slight difference if lots of dumb money is picking stocks based on what he says on TV. Time the short right and the stock will be slightly overvalued based on everyone else's expectations because of dumb money inflows...

daveguy 4y ago

The most important parametes of the ETF will be what time delay and how long. I guess that's critical for any ETF, but the market almost always blips in Cramer's direction before reversing (and occasionally not reversing).

politician 4y ago

Since Cramer has a large audience, his picks function as a magnet that aligns the beliefs of some subset of that audience. If the effect is large enough, then trading against that effect can be worthwhile. It's exploiting the same alignment effect as companies that buy order flow from retail investor apps. Retail investors typically do not generally buy large amounts of a single stock over time to get the best price. By buying Robinhood's order flow, Citadel can trade against a counterparty whose behavior is generally known. The theory behind exploiting the gradient created by alignments caused by factors other than fundamental business performance is better than random.

kobalsky 4y ago

> which is like 50/50 on some cases it can actually be way worse. an inexperienced trader may end up losing money on a trade regardless if they picked the "correct" side because they usually have no exit strategy and they will inevitably screw it up.