Here in the hallowed halls of Slope of Hope, we like to pick on Cramer. Of course, he makes it so easy that it is just too hard to resist. So let’s talk about the Cramer Predictive Indicator (CPI).
Back on March 17th, an article on CNBC was published (Jim Cramer says investors should buy these 11 recently boosted dividend stocks). At the time, the markets were down roughly 50% of the way to the June bottom. He was early, to say the least. Below are the charts for each one he recommended. In all fairness to him, it could be a lot worse. However, even though there are 5 out of 11 “winners” in the lot, the losses on the 6 losers do outweigh the gains.
Now, I chose a time to do this comparison after (I hope) a MAJOR bear market rally. What will these picks look like in a few days/weeks? Anybody’s guess is as good as mine, but I have a feeling that the losses are going to mount soon. For $5,000,000/year, I would expect a little better track record than this, but at least it is not an account busting performance….if you were to get out of them now.
Using the “WouldaCouldaShoulda” feature here on Slope, you can see that had you put equal dollar amounts into each of his picks, you would be touting a -2.2% loss, which is not that bad if you held each one through the market turmoil. I did not take into account any dividends, so it is entirely possible that you would have a slight profit (Editor’s note: we incorporate dividends into the historical stock data).
