Jim Cramer’s Mad Money : Effects on Stock Returns

Date
2006
Journal Title
Journal ISSN
Volume Title
Publisher
Producer
Director
Performer
Choreographer
Costume Designer
Music
Videographer
Lighting Designer
Set Designer
Crew Member
Funder
Rehearsal Director
Concert Coordinator
Moderator
Panelist
Alternative Title
Department
Haverford College. Department of Economics
Type
Thesis
Original Format
Running Time
File Format
Place of Publication
Date Span
Copyright Date
Award
The Holland Hunter 1943 Economics Department Thesis Prize
Language
eng
Note
Table of Contents
Terms of Use
Rights Holder
Access Restrictions
Haverford users only
Tripod URL
Identifier
Abstract
This paper examines the abnormal stock returns generated by the primary stock recommendations of Jim Cramer on his television show Mad Money between the dates of July 8, 2005 and February 2, 2006. Mad Money is broadcast on CNBC, and is currently its highest rated programming, drawing over 380,000 nightly viewers. The average overnight abnormal stock return generated by a Cramer recommendation is 7.624%. Market capitalization, and short interest as a percent of float, prove to have a negative statistically significant relationship on the magnitude of the effect Cramer causes. The average increase in volume on the trading day following the previous night’s recommendation is 643.79%. Finally, Cramer often cautions viewers NOT to buy the securities he mentions into the overnight euphoria, but rather to wait and let the stock settle before buying. This paper also examines the average return of the stocks Cramer recommends over different combinations of months and buying criteria. Over the medium to long run, Cramer’s recommendations do outperform the major indices on average.
Description
Citation
Collections