Cramer Does It Again with CIT Call 96 comments
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When will the SEC start regulating game shows masquerading as investment advisory? This weekend, CIT Group filed Chapter 11. Merely four weeks ago, Mad Money host and TheStreet.com (TSCM) founder Jim Cramer said he would buy CIT (CIT) (”Citi and CIT are Primed for Upside“).
This type of incredibly speculative advice is as radioactive to the general investing public as a post nuclear explosion site: (Click to enlarge)
As you can see in the chart above, Cramer recommended to buy CIT at the exact top. Thus, if “In Cramer You Trust” (like the CNBC commercials tell you to do), you are probably going to have lost 90+% of your investment by the open on Monday.
When Jim reads this he will probably email me again and ask me to remove the post and apologize to him. I suggest his remaining viewers email him and ask him to remove his stock picks from Mad Money and TheStreet.com as well as apologize. If Cramer was an honest guy and didn’t pathologically believe his own spin, he would add himself to his Wall of Shame. Unfortunately, if you now attempt to manifest the mission of his new book “Getting Back to Even”, you need to find an investment in which you can double your money. Vegas, anyone?
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This article has 96 comments:
That being said when Cramer talks with his usual strength of conviction it is very tempting to think he can't always have the specific knowledge to back it up.
Jan
On Nov 02 07:51 AM logicalthought wrote:
> Cramer is a smart (and often funny) guy who is horrendously irresponsible
> for making buy and sell recommendations on thousands of stocks on
> which he can't possibly have time to do his homework. The world changes
> very quickly these days, and thus there's no way ANYONE can follow
> more than, say, 20 or 30 stocks closely enough to make informed buy
> or sell recommendations about them, and yet Cramer-- whose time is
> stretched unbelievably thinly with all of his various projects--
> has the nerve to try to do this for THOUSANDS of companies? This
> is grossly irresponsible, and he should give serious thought to admitting
> this and reformatting his show accordingly.
On Nov 02 09:38 AM kgeechee wrote:
> Your math skills are as bad as some of Cramer's stock picks. Double
> your money after a decline of 90% won't help much. Assume $10K invested,
> 90% decline to $1k doubled to $2k; I am not even; I'm $8k short.
> Double again at $4k and again at $8K and I'm getting closer; only
> $2K short now after 3 stellar picks in a row. Moral: forget the math
> (and spelling). Use protective trailing stops. Yes, sometimes you
> get closed out on an immediate 'short' run and the stock recovers
> to a decent profit. Those are the breaks. It won't happen often.
On Nov 02 09:38 AM kgeechee wrote:
> Your math skills are as bad as some of Cramer's stock picks. Double
> your money after a decline of 90% won't help much. Assume $10K invested,
> 90% decline to $1k doubled to $2k; I am not even; I'm $8k short.
> Double again at $4k and again at $8K and I'm getting closer; only
> $2K short now after 3 stellar picks in a row. Moral: forget the math
> (and spelling). Use protective trailing stops. Yes, sometimes you
> get closed out on an immediate 'short' run and the stock recovers
> to a decent profit. Those are the breaks. It won't happen often.
CNBC should be ashamed in periodically running the
"In Cramer we trust"
ads. The disclaimers may take them of the legal hook, but certainly not the moral one.
We wonder if the financial rewards of having him on equates to the large number jumping ship to Fox?
Ps Trader85 if you listen to Bloomberg all day, you'll be sure to lose your money, perhaps not as fast as CNBC.
On Nov 02 11:28 AM ukdaytrader wrote:
> I actually run a side portfolio doing the opposite of Cramer and
> guess what, it has done pretty well and its thanks to Cramer that
> the portfolio has beaten the market. So I actually like the guy and
> you can learn a lot from him.
>
> Ps Trader85 if you listen to Bloomberg all day, you'll be sure to
> lose your money, perhaps not as fast as CNBC.
On Nov 02 09:49 AM wall street cheat sheet wrote:
> Oops. You're correct. I meant to add that you need multiple investments
> to double. I wrote that on the fly late last night after a long day
> watching football and having a few brews with the family ...
It is like watching Obermann and O'Reilly -- you know they are both full of manure but you watch them non the less.
CIT has fallen.
Is CITI Next????????????
Does anyone out there know?????? Not you Cramer.
Uh Uh....................... are on the TOO big too fail list.
Their covered, just like GS/JPM, no way Gv't allows it.
CIT was allowed to Belly Up, simply because it's part of Obama's plan.
Any idea how many small to med business folks will go bankrupt, from no help here?.And how many more sheeple will be added to the ranks of the unemployed?.
More unemployment, and more folks grasping for anything they can to stay off the streets..............will DO anything to survive.
Sheeple are easier to control, when their hurting, real bad...........
Ask yourself the question, WHY are GS making tons of $, and JPM?.
WHY are they in the elite category, of the Too Big to fails.
CIT, 71 Billion in assets................... guess that's CHUMP change................... the chumps?.
On Nov 02 09:49 AM wall street cheat sheet wrote:
> Oops. You're correct. I meant to add that you need multiple investments
> to double. I wrote that on the fly late last night after a long day
> watching football and having a few brews with the family ...
you will be eating those "housing stabilization call" words soon enough. housing will be down another 15-30% and you can add that to the number of bogus calls made by cramer
On Nov 02 09:57 AM DonFurio wrote:
> An investor should rely on Cramer's opinion as one part of the investment
> process, but clearly not listen to every word he says. I'm curious
> if you actually read the whole article, I did not, but I can't imagine
> anyone would be buying CIT within the past month if they didn't believe
> it was a big speculative play. I give Cramer credit for calling
> a year in advance that housing stabilization would occur in the summer
> of 2009.
On Nov 02 09:38 AM kgeechee wrote:
> Your math skills are as bad as some of Cramer's stock picks. Double
> your money after a decline of 90% won't help much. Assume $10K invested,
> 90% decline to $1k doubled to $2k; I am not even; I'm $8k short.
> Double again at $4k and again at $8K and I'm getting closer; only
> $2K short now after 3 stellar picks in a row. Moral: forget the math
> (and spelling). Use protective trailing stops. Yes, sometimes you
> get closed out on an immediate 'short' run and the stock recovers
> to a decent profit. Those are the breaks. It won't happen often.
Cramer said NYX was the growth stock of the year in 2008 when it was in the 90's. I don't really recall any good reasons for what he was saying he was just all fired up about it. I like watching him sometimes though for entertainment value. Guilty pleasure.
On Nov 02 05:23 PM jjaunter wrote:
> Dont forget that CNBC just put Maria Bartiromo on the advice stint.
> Maybe she will join Cramer.
buck the major trend for a time. His most recent danger pick is Amazon. That's set to crash and burn along with some other of his great picks.
Cramer called the bottom of the market in March-April, where most of the commentators and research analysts where telling their clients to sell. If you followed Cramer's advice at the time, and bought a portfolio of 100 distressed stocks, you would not need to read and write in such a blog today.
I have never met anybody in the investing world, who is always right...
Okay then "fun" article in that spirit and context.
On Nov 02 12:33 PM Anti-Fool wrote:
> Wow...what a bunch of "haters." Smells like jealousy with a little
> envy mixed in. If you hate the guy so much...don't watch him!
On Nov 02 09:49 AM wall street cheat sheet wrote:
> Oops. You're correct. I meant to add that you need multiple investments
> to double. I wrote that on the fly late last night after a long day
> watching football and having a few brews with the family ...
Jim Rogers, that is.
On Nov 02 12:33 PM Anti-Fool wrote:
> Wow...what a bunch of "haters." Smells like jealousy with a little
> envy mixed in. If you hate the guy so much...don't watch him!
Why are we bashing a guy on TV anyway? We know the market, we know what to buy and sell and we know what everything market means. We're certainly not protecting his viewers.
Cramer is a gnat, sure but we are more than capable of ignoring him. Writing about him is just mean spirited.
On Nov 02 09:57 AM DonFurio wrote:
> An investor should rely on Cramer's opinion as one part of the investment
> process, but clearly not listen to every word he says. I'm curious
> if you actually read the whole article, I did not, but I can't imagine
> anyone would be buying CIT within the past month if they didn't believe
> it was a big speculative play. I give Cramer credit for calling a
> year in advance that housing stabilization would occur in the summer
> of 2009.
On Nov 02 05:23 PM jjaunter wrote:
> Dont forget that CNBC just put Maria Bartiromo on the advice stint.
> Maybe she will join Cramer.
CIT is a repairable company in bankruptcy, and the resulting stock price will reflect this given past examples. Many a major blindsided company has recovered from hits like this in restructuring, so Cramer's opinion is most likely looking past this as a positive step in the right direction.
GM will as well with it's new volt engine will cause a revolution in hybrid conversions of existing gasoline engines.
I think you're wrong.
I haven't watched Cramer in years, but there is no doubting his ability to make money. He is easily worth eight to nine figures and did it on his own (albeit with questionable methods according to the book "Trading with the Enemy"). He is an entertainer now. To take him as anything else puts you in the dumba$$ categoty. Just sayin.
"oops he did it again"
Don't forget the housing bottom call in 2006
or Wachovia
or... ah nevermind... send the sheeple in for slaughter.
Scoring easy points by applying 20/20 hindsight to BIll Miller or Jim Cramer doesn't prove that the "dynamic duo" in the cheatsheet can do any better at picking stocks than those they critisize.
Constructive blogging would consist of articles either for or against stocks or sectors, with some well-reasoned thought process to help the reader make his own decision. Right or wrong, somebody can learn something and be a better investor.
On Nov 02 04:39 PM DosZap wrote:
> Is CITI next?.
> Uh Uh....................... are on the TOO big too fail list.<br/>Their
> covered, just like GS/JPM, no way Gv't allows it.
>
> CIT was allowed to Belly Up, simply because it's part of Obama's
> plan.
> Any idea how many small to med business folks will go bankrupt, from
> no help here?.And how many more sheeple will be added to the ranks
> of the unemployed?.
>
> More unemployment, and more folks grasping for anything they can
> to stay off the streets..............will DO anything to survive.
>
>
> Sheeple are easier to control, when their hurting, real bad...........
>
> Ask yourself the question, WHY are GS making tons of $, and JPM?.
>
>
> WHY are they in the elite category, of the Too Big to fails.
>
> CIT, 71 Billion in assets................... guess that's CHUMP change...................
> the chumps?.
So your suggesting he was never negative on this stock? BS!
On Nov 02 09:57 AM DonFurio wrote:
> An investor should rely on Cramer's opinion as one part of the investment
> process, but clearly not listen to every word he says. I'm curious
> if you actually read the whole article, I did not, but I can't imagine
> anyone would be buying CIT within the past month if they didn't believe
> it was a big speculative play. I give Cramer credit for calling
> a year in advance that housing stabilization would occur in the summer
> of 2009.
Clearly, no one would have done well listening to you since you've been bearish all year and doubted the recovery all the way up. I’ve consistently said and of course it depends on your individual situation, but for many people out there, it makes sense to be in stocks and to add to your positions each month if you are looking for long-term capital appreciation and in the mean time you are collecting dividends.
My point on housing is not the Cramer called the absolute price bottom to occur a certain month, but he was able to recognize in the summer of 2008 that the huge declines in housing would start to decline in the summer of 2009 based on housing starts being dramatically down, total inventory, etc. He never said that housing will rebound sharply.
The problem with people like yourself who always want to wait until you know for sure, is that by the time you know everything is better, there is very little money to be made. I hope you’ve been short all year and have been severely busted.
On Nov 03 06:10 PM enigmaman wrote:
> so you suggest to rely on Cramer in part but not listen to every
> word, so pray tell what parts should one listen to and which parts
> shouldnt we? You also give him credit for calling the bottom in housing,
> seems a bit premature because we wont know that for sure until the
> end of the year and then it may only have been the first bottom,
> was he calling THE BOTTOM or the first bottom?
On Nov 03 10:29 AM Zmartmoney wrote:
> You might want to consider WHY housing has "stabilized." It has nothing
> to do with houses and everything to do with smoke, mirrors, toxic
> assets, large, dark closets, and working hard to ignore gaping holes.
> Housing isn't stabilized, it's just not crowding for your attention
> as much as it was recently - it's roughly equivalent to celebrating
> your "owwie" on your elbow healing up, while the rest of you is in
> a body cast.
www.deepcapture.com/ji.../
It seems absurd that if you're an investment adviser to a few small businesses you need to be regulated, and have a fiduciary duty, but if you're a stock pumping dirt bag on TV, with a few million idiot viewers, you can say whatever the hell you want. Buy BUY BUY!!!
Of course an argument could be made that Cramer simply makes the market more efficient by reallocating "idiot capital."
On Nov 03 04:25 PM TraderMark wrote:
> With apologies to Britney
>
> "oops he did it again"
>
> Don't forget the housing bottom call in 2006
>
> or Wachovia
>
> or... ah nevermind... send the sheeple in for slaughter.
The problem is his show is structured towards gamblers and is inappropriate for 95% of those who follow him
This is just another example of his irresponsibility
Knock Cramer all you want, it seems to be the popular thing to do day in day out amongst investors on the internet. That said, if he only has encouraged one person to begin an investing program that they otherwise would not have, then I think he has accomplished more than most of those running their mouths on here.
I am no Cramer apologist, but it bothers me when I see folks bashing someone who clearly has one of the biggest hearts and has done more to educate the average investor than anyone I have observed in the financial media. His delivery is designed to entertain, and he usually has strong fundamental ideas behind his calls. My advice, show me your track record of picking upwards of 4 stocks each and every day, helping the uneducated to dev elop investment plans, and to further the financial savvy of the financial illiterate before running your mouth about someone you do not know, nor understand.
- so does that mean you want to ban Fast Money and the other CNBC shows where people talk about stocks? You've got to be kidding me, where is everyone's personal responsibility? Do you want BO's cronnies to wipe you after you take a dump too...
No one is forcing you to buy anything. If someone is too stupid not watch something on TV and buy it without doing to proper research, then that is their OWN fault.
On Nov 03 08:55 PM pacalis wrote:
> Cramer should be taken off the air. If what he's doing isn't illegal
> it should be.
>
> It seems absurd that if you're an investment adviser to a few small
> businesses you need to be regulated, and have a fiduciary duty, but
> if you're a stock pumping dirt bag on TV, with a few million idiot
> viewers, you can say whatever the hell you want. Buy BUY BUY!!!<br/>
>
> Of course an argument could be made that Cramer simply makes the
> market more efficient by reallocating "idiot capital."
They know nothing! They know nothing! They know nothing!..
If he has to be a dork 9 days out of 10, to get to say what needs saying when we need it, fine.
He first dubbed this as one of his value stocks of the year for 2007. The stock did poorly but recovered to around $ 90 share price by end of year. At that point in time, I (proably like many others) had only small losses or about even. Then the real damage starts, when Cramer the ego-maniac comes out with his recommendation to not sell, but hold this stock so that you would not miss the tremendous upside that was coming! And then of course is when the stock really tanked to the depths where it resides today. This is the kind of real damage such an ego can do, where in the attempt to vindicate himself he was willing to put the assets of his many viewers at risk. I believe similar stories played out with the likes of SHLD where he was sure that his "personal friend" Ed Lambert would turn around the company -- he never did and consider that Cramer pumped the stock when it was in triple digits. As a final thought to leave you with , consider that Cramer rarely mentions the fact that he does not own any of the stocks he pumps -- his money is in safer areas such as treasuries, CDs, and cash. If the man can't eat his own cooking, how can anyone trust him?
Also your view of "proper research" is a bit naive - you ignore the plain fact that there's a huge industry that directs investments for other people and organizations. So, not a perfect world, but Cramer still makes it worse.
On Nov 04 09:48 AM DonFurio wrote:
> "Cramer should be taken off the air. If what he's doing isn't illegal
> it should be."
> - so does that mean you want to ban Fast Money and the other CNBC
> shows where people talk about stocks? You've got to be kidding me,
> where is everyone's personal responsibility? Do you want BO's cronnies
> to wipe you after you take a dump too...
>
> No one is forcing you to buy anything. If someone is too stupid not
> watch something on TV and buy it without doing to proper research,
> then that is their OWN fault.
>
> On Nov 03 08:55 PM pacalis wrote:
No one forced you to buy NYX or SHLD. Besides these companies are not bankrupt and have a chance to come back, are you dollar cost averaging?
On Nov 04 03:07 PM zug wrote:
> Cramer ...is someone who poses as a guru and know-it-all, and so
> is a threat to the novices who might take him seriously -- as I did
> for a while. I lost my shirt for one year of investing when I followed
> his advice re: NYX stock.
> He first dubbed this as one of his value stocks of the year for 2007.
> The stock did poorly but recovered to around $ 90 share price by
> end of year. At that point in time, I (proably like many others)
> had only small losses or about even. Then the real damage starts,
> when Cramer the ego-maniac comes out with his recommendation to not
> sell, but hold this stock so that you would not miss the tremendous
> upside that was coming! And then of course is when the stock really
> tanked to the depths where it resides today. This is the kind of
> real damage such an ego can do, where in the attempt to vindicate
> himself he was willing to put the assets of his many viewers at risk.
> I believe similar stories played out with the likes of SHLD where
> he was sure that his "personal friend" Ed Lambert would turn around
> the company -- he never did and consider that Cramer pumped the stock
> when it was in triple digits. As a final thought to leave you with
> , consider that Cramer rarely mentions the fact that he does not
> own any of the stocks he pumps -- his money is in safer areas such
> as treasuries, CDs, and cash. If the man can't eat his own cooking,
> how can anyone trust him?
No one forced you to buy NYX or SHLD. Besides these companies are not bankrupt and have a chance to come back, are you dollar cost averaging?
On Nov 04 03:07 PM zug wrote:
Dollar cost averaging is not an academically sound principle. It is a scam that brokers use to increase the number of buy transactions around a position, thus increasing their fees while minimizing the psychology of loss.
On Nov 04 03:49 PM DonFurio wrote:
> CNBC commentators are not allowed to own stocks.
> No one forced you to buy NYX or SHLD. Besides these companies are
> not bankrupt and have a chance to come back, are you dollar cost
> averaging?
On Nov 04 06:04 PM pacalis wrote:
> LOL, you watch too much TV.
>
> Dollar cost averaging is not an academically sound principle. It
> is a scam that brokers use to increase the number of buy transactions
> around a position, thus increasing their fees while minimizing the
> psychology of loss.
What do you mean by "regulated"? They have disclosures for a reason.
If you mean not have a show at all because he talks about stocks, where do you stop? Do you go after websites like SA next? Do you go after videos on youtube discussing stocks?
Dollar cost averaging is not a scam. Most online brokers have very low (around $4) and some even give you free trades each month if you have a high enough balance. Dollar cost averaging has worked well for me and I hardly spend money at all on commissions. The NYX may not get back to 100 anytime soon, it's at 26 now, however I'd say it can easily get to 50 within a few years considering the projected earnings, current valuations, over 4% div yield, etc. That would be a 100% move or so from here, and if you agree, why wouldn't you buy more?
I'm sick of hearing about these "poor novice investors" who get burned listening to Cramer or whoever on TV. Let's call it what it is, you think you can manage your money on your own, and why not just listen to guy on TV jumping around telling you what to do. Well if it was that easy everyone would be rich.
My original point is that he is someone that is knowledgeable about current events, the economy, etc, but if listening to him is only thing you do before you buy a stock you are going to get burned, especially since he is often a momentum investor.
On Nov 04 03:24 PM pacalis wrote:
> DonFurio - you're "eliminate suckers" approach is a good idea but
> not very practical. The game is stacked and there are a s@#tload
> of idiots out there - that's why investment advisers are regulated.
> And that's why someone who has the power to manipulate markets and
> also gives investment advice should be regulated.
>
> Also your view of "proper research" is a bit naive - you ignore the
> plain fact that there's a huge industry that directs investments
> for other people and organizations. So, not a perfect world, but
> Cramer still makes it worse.
>
> On Nov 04 09:48 AM DonFurio wrote:
If you buy $100 worth of stock @ $10 a share
then buy $100 worth of stock @ $5 a share
Is your average price per share $7.50?
No. Your first $100 bought only 10 shares. Your second $100 bought 20 shares for a total of 30 shares. You have invested $200 and bought 30 shares.. $200/30 = $6.67....you've taken advantage of market volatility to minimize your cost basis, and if you're a dividend investor like me, using the market's volatility to your advantage in this way maimizes your dividend yield.
what kind of idiot still follows this guy ?
I have a few things to say about your example which is so typical of DCA examples...
1. You neglect transaction costs which necessarily drive up your cost basis.
2. You lost fifty percent of your investment in period 1. Sorry, but that's not a good thing. This is where we get into the psychology of it - a 50% loss is not a DCA opportunity. It's a 50% loss. If you've got a stock that's so volatile that its moving about so much to make DCA work you've probably got a different problem.
3. Remember that the long term trend of the market is expected to beat the return of a a risk free asset, so on the whole a dollar cost averaging policy will result in buying more expensive stocks over time, not cheaper ones.
On Nov 04 08:12 PM consumeronstrike wrote:
> Dollar cost averaging is so basic it doesn't need to be defended.
On Nov 02 08:08 AM J. Bruun wrote:
> I think (and hope) that these people like Cramer and those you see
> being hyper active on pages like this are in fact just faces to a
> minor organization who publish in the name of one person.
>
> That being said when Cramer talks with his usual strength of conviction
> it is very tempting to think he can't always have the specific knowledge
> to back it up.
>
> Jan
On Nov 05 03:41 PM consumeronstrike wrote:
> Some people want to gamble and some people want to invest. I would much rather spend my time buying pieces of solid companies and building up my dividend income over time than speculating on price movements.
On Nov 05 06:04 PM pacalis wrote:
> If you care about dividend yield you should have discussed a dividend
> yield strategy. For example, I hold cash until I can realize x divided
> yield from company abc. That seems to me to be a good general approach.
> However that's completely different from the "win some lose some"
> approach that DCA takes to supposedly address price volatility.
I do not hold cash. And it makes all the sense in the world to me whether or not it does to you. In the area I live there's next to nothing in the way of jobs, and I make anywhere from $16K - $18K a year, probably closer to the lower range most of the time. Poor people trying to hold cash determined not to spend it unless they "really, really need to" find that life will throw just enough "little disasters" their way to nickel-and-dime all their savings away just about every time they manage to think they're finally going to have some. No. I. Do. Not. Hold. Cash. I look at the income in dividends I can get and think what that same money would get me in interest if I put it in the bank, where experience has taught me it absolutely won't be safe for very long, for the reasons I've given above. If I can get 3, 4, or 5 times as much in income from dividends as I would get sticking it in the bank, it looks good to me. Would it be an even better investment at a later point in time? Probably. So just because it would be a better investment later means it isn't a "good" investment now? This is where I differ. I buy income whenever I have the money. In my view, I'm better off increasing my income than I am having that money burning a hole in my pocket. So much better off, in fact, that by this time next year I expect my dividend income to provide the same boost to my standard of living that working a part-time job would. So this makes plenty of sense to me. Also, the extra income I've bought helps to insulate me from being forced to raid my "savings" by unexpected events.
I'm not defending the dude, I'm never out of the office in time to watch him early, but sometimes when i'm doing my stock research at night, I'll put him on and listen with half an ear while doing other stuff.
In life, you should learn to not only identify someone's weaknesses, but identify strengths. Sure, his picks are absurd at times, and his defense and narrowminded view of his own picks is infuriating. Plus he recommends stocks w/o giving ppl a timeframe or an entry point. Most annoying, I've heard him tell people to buy stocks that have JUST REPORTED blow out numbers, (PNC, SBUX 3Q earnings, home depot, etc.). Why on earth would anyone tell folks to run into a stock that just blew out estimates and is trading up huge in afterhours. Talk about buying a top, lol.
Most recently, he suggested strongly ppl buy AT&T when it was over $27. "next stop 30!!" right. it reversed the next day and can barely close above $26 now, instead dwelling mostly in the $25.40-25.90 range. so anyone who bought that was down the second they laid out the money and will be waiting to get back to even, and perhaps help him sell books lol.
but the fact of the matter is he is a useful source for passing along useful murmors from hedgies and insider, you KNOW from his past he was quite a network of sources. And while he doesnt attribute predictions to anyone (except if its someone from his Web site) you can tell he talks to ppl who move markets because his overall "get in or get out" of stocks in general is pretty on point.
I would never buy a stock he recommends, and in fact, I sell anything I own that he suggets. I think institutions short his reccos because they almost always get pummeled the next day or certainly within the next week. I personally dont think your average joe who already has a fulltime job should even be attempting to stockpick. ESPECIALLY if they're so idea-starved that they're calling a TV show for help. If I needed help that badly, I would simply not pick stocks and buy index funds and etfs.
On Nov 02 11:19 AM Trader85 wrote:
> Kramer, Kudlow, Leisman, Neal, et al. are the paramount of irresponsibility.
> Think about their recommendations and guest "experts". There is
> absolutely NO accountability for any of them. They are relentlessly
> obnoxious and confrontational about everything; honestly have you
> ever heard a guest finish a complete thought without being interrupted
> by one of these idiots sputtering out sentence fragments just to
> ask the same question they were in the middle of answering already.
> I hate CNBC, finally got access to Bloomberg TV.
2. If you go a big bear market like last year, you may have some paper losses. Of course if you think a stock you own is going to tank you should sell, however you will have situations where the stock goes down but you still believe in the long term fundamentals of the company.
3. I disagree. You are not factoring in future performance. Obviously, you keep adding more to a loser stock, it's a bad decision, but if you keep adding to a stock that you believe will outperform in the future, it's a good move.
On Nov 05 02:21 PM pacalis wrote:
> You're right about it being basic - it was proven to be myth in 1979
> by George Constanides in the Journal of Financial and Quantitative
> Analysis titled "A Note on the Suboptimality of Dollar Cost Averaging
> as an Investment Policy."
>
> I have a few things to say about your example which is so typical
> of DCA examples...
>
> 1. You neglect transaction costs which necessarily drive up your
> cost basis.
> 2. You lost fifty percent of your investment in period 1. Sorry,
> but that's not a good thing. This is where we get into the psychology
> of it - a 50% loss is not a DCA opportunity. It's a 50% loss. If
> you've got a stock that's so volatile that its moving about so much
> to make DCA work you've probably got a different problem.
> 3. Remember that the long term trend of the market is expected to
> beat the return of a a risk free asset, so on the whole a dollar
> cost averaging policy will result in buying more expensive stocks
> over time, not cheaper ones.
>
> On Nov 04 08:12 PM consumeronstrike wrote:
I am sick of the Cramer B.S., and I see I'm not the only one :)