T Nation

Any Investors in the House?

Just wondering if anyone here does any active investing. I am thinking about employing a cramer bounce plan. Using something like scott trade which I believe is $4 per trade, the theory is that whenever Cramer of Mad Money talks about a stock (apparently good or bad) the stock bounces for a couple days as millions of sheep buy into the stock. So the smart investor, buys the stock day one and sells it on day 2 or three. Some very aggressive investors will also short it on the way back down as nearly all of them return to the same point they were at before he mentioned them within a week.

The small caps are where the big margins can be made, I have heard figures as high as 7% bumps on small caps. If you could turn even a 5% profit every 2-3 days, you would be filthy rich inside of a year and you could start with a very low initial investment. Should also be pretty low risk, I mean what are the odds a stock he reccomends tanks within 2 days of him reccommending “buy buy buy”. And if he is telling you to buy 10 per show, you are going to at least spread it out between those relatively evenly.

Thoughts? Comments? Insults?

V

Bring this up in the other place also V

ive made $3-400+ in about 15 minutes playing google, apple, netflix, amazon intraday breakouts with call options.

holding for 2-3 days and then selling (swing trading), is where i lose the majority of my money. just saying.

you also have to remember by the time cramer announces this info on live tv, he has told many, many people on wall street, so the price has already been inflated by the time his “sheep” get in.

EDIT: with call options i put in under $1500 to get those profits. very good return on investment in such a short time frame IMO.

[quote]Vegita wrote:
Just wondering if anyone here does any active investing. I am thinking about employing a cramer bounce plan. Using something like scott trade which I believe is $4 per trade, the theory is that whenever Cramer of Mad Money talks about a stock (apparently good or bad) the stock bounces for a couple days as millions of sheep buy into the stock. So the smart investor, buys the stock day one and sells it on day 2 or three. Some very aggressive investors will also short it on the way back down as nearly all of them return to the same point they were at before he mentioned them within a week.

The small caps are where the big margins can be made, I have heard figures as high as 7% bumps on small caps. If you could turn even a 5% profit every 2-3 days, you would be filthy rich inside of a year and you could start with a very low initial investment. Should also be pretty low risk, I mean what are the odds a stock he reccomends tanks within 2 days of him reccommending “buy buy buy”. And if he is telling you to buy 10 per show, you are going to at least spread it out between those relatively evenly.

Thoughts? Comments? Insults?

V[/quote]

The best quote my father ever told me about the stock market for non-professional investers is that ‘the chickens and pigs get slaughtered’. My personal advice is always look for long term holds bought undervalued or let a proffessional handle your money. ANYTHING else is just gambling based on speculation.

My thoughts are, try it out and let us know. this can be your threadblog where you discuss your experiences.

I am somewhat similar of the opinion to wannabebig.

The average joes watching cramer are not market movers. The hedge funds that already have this information and make millions of trades a day are.

I would be interested in hearing WBB’s options strategy, as I havent really done anything with them yet.

For the love of god don’t buy Zynga stock, that’s for sure :frowning:

[quote]666Rich wrote:
My thoughts are, try it out and let us know. this can be your threadblog where you discuss your experiences.

I am somewhat similar of the opinion to wannabebig.

The average joes watching cramer are not market movers. The hedge funds that already have this information and make millions of trades a day are.

I would be interested in hearing WBB’s options strategy, as I havent really done anything with them yet.[/quote]

I agree, if you are going to do it, please log it and let us know how it goes.

You can probably do a little research on the phenomenon … look at the price level of stocks mentioned on his show as a bounce before,during and after and see the rate it changes and how often this approach is effective.

Maybe try to isolate some common characteristics among the ones that the bounce theory is upheld v. the ones that it doesn’t.

Personally, I wouldn’t be willing to put money on this without doing a little empirical research first; even then I’d imagine it isn’t very consistent

I have invested in Rental Real Estate the past couple of years.

I think with the $4/trade fees and the mix of stocks that you make money on and lose money on (they will not all be winners), you’ll end up wasting a lot of time with a big net 0.

[quote]666Rich wrote:
My thoughts are, try it out and let us know. this can be your threadblog where you discuss your experiences.

I am somewhat similar of the opinion to wannabebig.

The average joes watching cramer are not market movers. The hedge funds that already have this information and make millions of trades a day are.

I would be interested in hearing WBB’s options strategy, as I havent really done anything with them yet.[/quote]

i use options pretty much as i would stocks. i just buy calls to go long and puts to go short. i dont use any fancy strategies like straddles or iron condors.

and i focus primarily on technical analysis and trend following.

just made a tidy $390 profit on google in the last half hour. bought and sold in 30 mins that is.

Say you put in $1000 and every stock you pick gets a 5% bounce (very unlikely), you just made $50. Spread that out over 10 stocks, $40 trade fees to buy, $40 trade fees to sell and don’t you wind up in the red? Say you put in $5k, are you that confident your stocks will average a 5% bounce?

I don’t invest all that often outside of my 401k. I’m just thinking logically about this.

You also have to wonder if it’s so easy than why isn’t everyone doing it?

I’m not saying you think it’ll be easy Vegita, but I’d be cautious or at the very least pick an amount ($2K for example) and expect to loss that while you learn how your approach works.

Good luck, if you turn out to be the next Buffett (sp?) don’t forget us!

[quote]LankyMofo wrote:
Say you put in $1000 and every stock you pick gets a 5% bounce (very unlikely), you just made $50. Spread that out over 10 stocks, $40 trade fees to buy, $40 trade fees to sell and don’t you wind up in the red? Say you put in $5k, are you that confident your stocks will average a 5% bounce?

I don’t invest all that often outside of my 401k. I’m just thinking logically about this. [/quote]

  • don’t forget Uncle Sams cut.

[quote]usmccds423 wrote:

[quote]LankyMofo wrote:
Say you put in $1000 and every stock you pick gets a 5% bounce (very unlikely), you just made $50. Spread that out over 10 stocks, $40 trade fees to buy, $40 trade fees to sell and don’t you wind up in the red? Say you put in $5k, are you that confident your stocks will average a 5% bounce?

I don’t invest all that often outside of my 401k. I’m just thinking logically about this. [/quote]

  • don’t forget Uncle Sams cut. [/quote]

IF he actually makes money!

Good luck, V, but there are a lot of cockamamie strategies out there and I don’t think any of them have been proven to be fool proof, I don’t want to see you get swindled by the market.

[quote]LankyMofo wrote:

[quote]usmccds423 wrote:

[quote]LankyMofo wrote:
Say you put in $1000 and every stock you pick gets a 5% bounce (very unlikely), you just made $50. Spread that out over 10 stocks, $40 trade fees to buy, $40 trade fees to sell and don’t you wind up in the red? Say you put in $5k, are you that confident your stocks will average a 5% bounce?

I don’t invest all that often outside of my 401k. I’m just thinking logically about this. [/quote]

  • don’t forget Uncle Sams cut. [/quote]

IF he actually makes money!

Good luck, V, but there are a lot of cockamamie strategies out there and I don’t think any of them have been proven to be fool proof, I don’t want to see you get swindled by the market.[/quote]

…and if he loses money for, I think 3+ years, it becomes a hobby loss so no love on the tax return.

[quote]Vegita wrote:
Just wondering if anyone here does any active investing. I am thinking about employing a cramer bounce plan. Using something like scott trade which I believe is $4 per trade, the theory is that whenever Cramer of Mad Money talks about a stock (apparently good or bad) the stock bounces for a couple days as millions of sheep buy into the stock. So the smart investor, buys the stock day one and sells it on day 2 or three. Some very aggressive investors will also short it on the way back down as nearly all of them return to the same point they were at before he mentioned them within a week.

The small caps are where the big margins can be made, I have heard figures as high as 7% bumps on small caps. If you could turn even a 5% profit every 2-3 days, you would be filthy rich inside of a year and you could start with a very low initial investment. Should also be pretty low risk, I mean what are the odds a stock he reccomends tanks within 2 days of him reccommending “buy buy buy”. And if he is telling you to buy 10 per show, you are going to at least spread it out between those relatively evenly.

Thoughts? Comments? Insults?

V[/quote]

Unless you’re the MJ of security selection I suggest you stick with passive management. Cut down costs as much as possible.

Sure didn’t hurt me, I’ve averaged 9.4% the passed three years.

Not a hobby loss. Capital losses, just short term.

[quote]Derek542 wrote:
Bring this up in the other place also V[/quote]

OK I’ve seen this referenced in a couple of different threads now…soo what do i have to do to become a member of the “other place”
I promise I wont interfere or troll any forums or discussions.
TBO I’d be perfectly happy being a fly on the wall.
From what I gather there a a few intelligent posters over there and it never hurts to get some intelligent informative opinions without the trolls/hatas

Oh my lord…

Before I say anything further, I have to echo a previous statement in this thread, that is, retail investors don’t drive stock quotations, and the institutional investors that do, don’t make their portfolio selections based on TV finance gurus.

I’ll admit I’m not a day trading expert and have only traded on demo accounts but I do know a little bit about investment. IMO the strategy you’re suggesting seems delusional even from a day-trading perspective. Most day traders use some combination of technical analysis and short-term security/market analysis based on recent news and events. Your strategy is just based on theoretical logic that you haven’t even back-tested. You haven’t looked at historical data to see how much money you could make if you had implemented the strategy in the past. This would be quite simple to do if you have access to Cramer’s past recommendations. Maybe look at one year back, it would be easy in terms of finding Cramer’s recommendations. The thing is, even if you do this kind of analysis and you find you could have generated a profit, there is no guarantee the same strategy will deliver similar profits, if any at all, in the future. Such is the reality of the market man, especially in the day-trading environment. My guess? You implement your “Cramer Bounce” trading strategy and you’ll be lucky to just break-even.

Understand the foundation on which your strategy is based – you’re assuming Cramer’s recommendations induce some kind of price reaction to the specific stocks he has mentioned. Man, I don’t know about you but such an assumption has no intellectual soundless at all. It’s preposterous. The only way Cramer has any market influence is if he’s established himself as some kind of informational intermediary by relaying analyst consensus forecasts. However, in this scenario you actually want to listen to what he’s saying and even then good luck making any profit because you’d just get competitively priced out.

I could take this discussion all over the place but for the sake of coherence I’ll just say one more thing about your Cramer strategy: try it at your own peril. Its foundation has less theoretical backing than most other trading strategies that claim to be able to make you money. Only a few trading strategies actually make you money when you try them the first time (and we’re not even talking about magnitude here) but NONE of them are sustainable.

And only day-trade if you don’t have a full-time job, there’s a reason it’s called day-trading. Just value-invest; you could have returned over 1,000% (or more) if you invested $10,000 into the S&P in 2002 and made continuous monthly investments for the 10 years ending 2012.