As we stated in an earlier post, we have been tracking Jim Cramer’s Mad Money featured stock picks since January 2011 and will be providing an update on the returns each month. We assume a one-year holding period for each of his picks (unless Cramer reverses his opinion on the security, in which case we trade accordingly) and consider a “sell” rating to be a recommendation to short the stock. Some of our readers have argued that our one-year holding period assumption is too long, so in this post, we are also providing the returns on a three-month and six-month holding period basis.

Here is: (1) the average return for each holding period, (2) the corresponding annualized return to allow for comparability, (3) our $1 Yield metric, and (4) the Normalized Yield, which is simply Cramer’s $1 Yield divided by the S&P’s $1 Yield.

 

One year (61 picks)	Return	Annualized	$1 Yield	Normalized
Cramer	-11.1%	-11.1%	$0.89	$0.88
S&P	1.4%	1.4%	$1.01
Six month (168)
Cramer	-6.2%	-12.0%	$0.88	$0.92
S&P	-2.2%	-4.3%	$0.96
Three month (247)
Cramer	0.2%	0.9%	$1.01	$0.94
S&P	1.9%	7.7%	$1.08

The normalized yield measures relative performance. If this figure is greater than $1.00, then Cramer has outperformed the S&P; less than $1.00 reflects underperformance. For the picks tracked to date, Cramer has underperformed regardless of the holding period assumption.

Comments

comments