That Jim Cramer, He Says The Darndest Things

CNBC’s perma-bull extraordinaire Jim Cramer says that because David Einhorn’s Greenlight Capital lost money, his thoughts on a potential tech market bubble should be ignored. Last week Cramer said that activist value investor David Winters should be ignored because he didn’t have enough money under management.

Hmmmm…

That Jim Cramer, He Says The Darndest Things

Short term metrics

“How did it come to the point that we now get our opinions from investment letters from managers who lost money in the first quarter?” Cramer writes in a recent article.  So not only is he discounting Einhorn because he lost money, but it’s based on short term metrics.

Wonder what Cramer thinks of listening to William Ackman, who didn’t make money in 2013?

“How is it that we now bank with managers who tell us there is a tech bubble brewing without taking into account that the bubble has been bursting for a month now?” muses Cramer.  Funny, listening to him on CNBC one wouldn’t know the bubble burst a month ago.

Show me the money

Then Cramer asks a tough and interesting question. When Einhorn claims to have shorted “High flying momentum stocks,” Cramer says the equivalent of “Show me the money.”

“How could this fund (Einhorn’s Greenlight) be down 1.5% if you were shorting these high-flying momentum stocks?” Cramer asks. “You had to have just killed it with those. What did you do, cover? What happened? That was the most profitable strategy on earth and you lost money?”

Cramer appears to like investing with the hot hand

“I want to read the performance letters from the guys who are winning,” Cramer demands.  I wonder if he has heard of the alternative investment strategy of buying on a drawdown, sometimes touted by quantitative fund managers.

“I respect all managers,” he says, sounding like he is preparing for a final zinger. “But I want to take my cue from the guy who is getting it right, or at least executing right, not executing wrong.”



About the Author

Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)valuewalk.com