If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(Marketwatch)   If you rely on Jim Cramer for stock advice, you are losing $72,000 in "opportunity lost" per year to underperform the S&P 500 BOO-YAH   (marketwatch.com) divider line 23
    More: Obvious  
•       •       •

1664 clicks; posted to Business » on 06 Nov 2007 at 2:36 PM (6 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



23 Comments   (+0 »)
   

Archived thread
 
2007-11-06 12:45:30 PM
Now let's do the math in this simple economic equation: If you're following Prof. Cramer's rules and doing your "homework" you're watching "Mad Money" five hours a week and doing another 10 hours of "homework" on your "positions." That's potentially 60 hours of your valuable time each month, on top of your full-time job. Assuming you're a professional or business executive, let's say your time's worth $100 per hour, probably more.
So, bottom line: Your economic "opportunity lost" for 60 hours is at least $6,000 a month or $72,000 a year, playing by "Mad Money" rules. Get it folks? Your time is valuable. If you're worth a minimum of $100 an hour and you spend 60 hours a week on any activity, you darn well better be earning at least $72,000 a year. And to make that kind of money at, say, 15% a year you'd need more than $400,000 capital at risk.


you are a farking idiot
 
2007-11-06 01:03:20 PM
I thought the same thing but couldn't put it quite as well as you infantry

/someone making 100/hour would have more than 400k to invest.
//a majority of Americans probably do not make 100/hr
 
2007-11-06 01:19:32 PM
Plus, most jobs don't just pay you for showing up at any hour. The assumption with any salary opportunity cost is that you're not taking away from your earning time, but rather using you FREE time (clever name, huh?)
 
2007-11-06 01:22:59 PM
$100/hr is $208,000 a year (40/hr week job).

So, duh, most American's don't make 100/hr.

"Most" (or a majority) of America doesn't even make $25/hr.

So, this guy is an a$$.

/doesn't mean Cramer is a God or anything, just that this guys attack on him is off base.
 
2007-11-06 01:24:55 PM
Before I read the article, I was going to agree with you guys... but...

After reading it, while his $100 figure is way inflated for *most* people in this country, his main point is that the amount of time and energy put into really researching and buying and selling is enormous and it doesn't generally out perform the buy and hold strategy.

Yeah, his numbers are overstated a bit, but his point is good.
 
2007-11-06 02:40:18 PM
I figured anybody getting investment advice from a sweaty, fat, shouting man was just an idiot to begin with.
 
2007-11-06 02:52:57 PM
One thing he has said many times is quite valid, I think:

"Bulls make money, bears make money, sheep get slaughtered."


If you take the word of Cramer to be gospel truth and invest however he says to, at the cost of not doing your research (I believe "due diligence" is the phrase they use), you deserve to lose money.
 
2007-11-06 03:04:19 PM
I believe the last part is "pigs get slaughtered" not sheep
 
2007-11-06 03:04:36 PM
Who honestly takes the advice of some cokehead who goes around biting the heads off little plastic bulls?
 
2007-11-06 03:05:49 PM
Probably a better return rate than anything Larry Kudlow would push.
 
2007-11-06 03:15:32 PM
Who honestly takes the advice of some cokehead who goes around biting the heads off little plastic bulls?

Is Thomas loose again? Ive got to get better chains.
 
2007-11-06 03:17:54 PM
lost me at "Jim Cramer" and "stock advice"
 
2007-11-06 04:01:30 PM
None of the information contained in “Mad Money” constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.
 
2007-11-06 04:14:09 PM
He completely missed the point that lots of people actively trade not because they think they can beat some benchmark, but because it interests them.

Cramers show is directed at those very people, no wonder the old geezer doesn't get it.

I hope he doesn't opportunity cost his entire life. Poor guy. The costs associated with my various hobbies is staggering, I'de jump off a bridge if I did the calculations.
 
2007-11-06 04:21:44 PM
QT_3.14159

is main point is that the amount of time and energy put into really researching and buying and selling is enormous and it doesn't generally out perform the buy and hold strategy.

Yeah, his numbers are overstated a bit, but his point is good.


the opportunity cost i give up by spending 20 hours from friday to sunday drinking and smoking dope with my contemporaries could translate into a shiatload of money if i put those 20 hours to something else
 
2007-11-06 04:49:45 PM
If you're worth a minimum of $100 an hour and you spend 60 hours a week on any activity, you darn well better be earning at least $72,000 a year. And to make that kind of money at, say, 15% a year you'd need more than $400,000 capital at risk
===========

$100 an hour? That's 400 a day or roughly ONE MILLION A YEAR.

The top 1% of america starts at 360000 a year. So your advice would be... to who? Bill Gates?

Also, what baffoon in his right mind would spend 15 hours a week researching this stuff?

That article writer is a complete moron.
 
2007-11-06 05:05:13 PM
Oh whoops. It's 208000. Hurt me :)

Still that's roughly the top 3% of america. The point still stands.

=============
NikolaiFarkoff 2007-11-06 01:19:32 PM Plus, most jobs don't just pay you for showing up at any hour. The assumption with any salary opportunity cost is that you're not taking away from your earning time, but rather using you FREE time (clever name, huh?)
=====================

Also this is very valid.
 
2007-11-06 05:53:38 PM
Opportunity cost not opportunity lost.
 
2007-11-06 06:29:21 PM
HaywoodJablonski: Opportunity cost not opportunity lost.



What about opportunity knocks?
 
2007-11-06 07:43:50 PM
I just lost $20 of opportunity cost reading that article and the comments. What a bad investment decision by me. I should charge that to a client instead somehow I guess. Of course, since i'm salary, I guess that doesn't really apply.
 
2007-11-06 08:38:07 PM
Sure, if I had the opportunity to be making $100/hour, anytime of the day or night, doing something that didn't make me want to stab myself in the eye, then maybe his math would make sense.

However, the chances of that are pretty much nil.

scorreia
He completely missed the point that lots of people actively trade not because they think they can beat some benchmark, but because it interests them.

Exactly - I trade and I enjoy the hell out of it and the stock market has always interested me.

/also beating the S&P by just a bit for the past 12 months. Makes it somewhat more enjoyable.
 
2007-11-06 11:17:37 PM
bobjob: I believe the last part is "pigs get slaughtered" not sheep

Whatever. I think the total number of minutes CNBC has been on my television since I first hooked it up is in the single digits.

Actually, if you think about it, the saying means something radically different in either variation, but they're both good advice.
 
2007-11-07 12:50:32 AM
bobjob: I believe the last part is "pigs get slaughtered" not sheep

I've been to a farm once. Both get it in the end.
 
Displayed 23 of 23 comments



This thread is archived, and closed to new comments.

Continue Farking
Submit a Link »






Report