By Josh Katzowitz, WCI Content Director
In times like these when, thanks to social media, you can yell at the world’s richest people and troll those who hold the most power, why not take the musings of one of the most well-known (and most-mocked) stockpickers and then use it as evidence for why you probably shouldn’t be listening to him in the first place. That’s what the person behind the popular @CramerTracker Twitter account has done, and it’s the reason why an ETF has been created that allows you to do the exact opposite of what famed analyst Jim Cramer says you should do.
If you hate Jim Cramer’s stock picks, here’s some good news. You can make money off wagering against him.
In October, Tuttle Capital Management filed to the SEC a new Inverse Cramer ETF that would basically invest in the opposite of what the famed host of Mad Money advises. How will that work? According to the filing,
“Under normal circumstances, at least 80% of the Fund’s investments is invested in the inverse of securities mentioned by Cramer. The Fund’s adviser monitors Cramer’s stock selection and overall market recommendations throughout the trading day as publicly announced on Twitter or his television programs broadcast on CNBC, and sells those recommendations short or enters into derivatives transactions such as futures, options, or swaps that produce a negative correlation to those recommendations. The Fund goes long on stocks or ETFs that represent sectors that Cramer is negative on. The Fund uses Index ETFs and inverse Index ETFs to take the opposite side of Cramer’s announced market view.”
It's a clever troll. But the Inverse Cramer ETF also might ultimately be profitable—at least for now.
Picking the Opposite of What Jim Cramer Does
The same company that is starting the Inverse Cramer ETF also created an inverse ETF for what’s inside Cathie Wood’s Ark Innovation Fund (ARKK). For the year, ARKK is down about 59%. SARK, which is ARKK’s inverse, is up 54%.
IndexOne, meanwhile, created its own hypothetical version of a Cramer Inverse fund, based on @CramerTracker’s tweets. For the YTD, it’s up 0.71%. Meanwhile, the S&P 500 is down nearly 17% for 2022.
Cramer has been in the stock market limelight for the past 20 years. He’s the sweaty figure on CNBC who rolls up the sleeves of his dress shirt and yells at you through the camera about why you should invest in General Electric (he later said this about that advice: “Rarely have I felt this stupid”) or demanding you sell Netflix (six months after saying that in 2012, the stock was up 175%) or saying that it was just fine to invest in Bear Stearns (a few weeks later, that company collapsed). As comedian John Oliver said in 2023, “Jim Cramer is the only person who could look you in the eye, say, ‘You are going to die tomorrow,' and give you an immediate sense of calm, knowing you're going to live for another 50 years.”
Cramer was an investment banker with Goldman Sachs in the 1980s before opening his own hedge fund, where he made millions of dollars a year for more than two decades. To the layperson, he’s a guy who looks and sounds like he knows what he’s talking about, the kind of guy from whom you can take advice.
While Cramer is omnipresent on CNBC broadcasts, he also created the CNBC Investing Club that allows viewers and readers to pay $400 per year to see “every move Jim and his team make for the portfolio and [to] get Jim’s market insight before anyone else.” To the layperson, he apparently seems like a guy to whom you can give money so that you can eventually make money.
A 2009 Penn State study determined, “While Cramer may be entertaining and mesmerizing to many of his viewers, his aggregate or average stock recommendations are neither extraordinarily good nor unusually bad.” But the online mockery of Cramer has become abundant.
That includes the anonymous person who runs the @CramerTracker Twitter account. Here’s a sampling.
Jim nails it again pic.twitter.com/RT04yt5Vt6
— Inverse Cramer (Not Jim Cramer) (@CramerTracker) October 27, 2022
More pain, sigh. pic.twitter.com/XnBbGP1uWm
— Inverse Cramer (Not Jim Cramer) (@CramerTracker) October 24, 2022
Nailed it pic.twitter.com/jif814rTdU
— Inverse Cramer (Not Jim Cramer) (@CramerTracker) November 10, 2022
Oh Jimmy🤣 pic.twitter.com/8Ie2609X4O
— Inverse Cramer (Not Jim Cramer) (@CramerTracker) November 1, 2022
Best news ever pic.twitter.com/BpzBWkMKl6
— Inverse Cramer (Not Jim Cramer) (@CramerTracker) October 31, 2022
The person behind the Twitter account, which now has more than 140,000 followers, says they work in media but also has a background in finance and loves investing. But that love doesn’t extend to Cramer and the advice he gives.
“I've always been fascinated with the idea that public figures/TV ‘experts’ were able to give financial advice and, in Jim's case with the CNBC Investing Club, charge for it,” the person behind @CramerTracker told me, via email. “If you look at his Twitter banner, it says ‘get in-depth investment advice’—a lot of people say Jim is just an ‘entertainer,’ but that's not true. He is marketing himself as an expert to ‘make you money.’ This has always fascinated me because financial advisors, etc., aren't able to talk about specific stocks online, etc., and are heavily SEC compliant. But Jim can do whatever he wants without any accountability.”
@CramerTracker opened the Twitter account in November 2021 to bring accountability to Cramer’s picks. So far, Cramer has been wrong more than he’s been right. As @CramerTracker says, “He is great if you just do the opposite!”
But what happens to the Twitter account if Cramer goes on a hot streak? Could they admit that Cramer is capable of making good calls, that he can bring some value to the stock-picking world?
Said @CramerTracker, “Still waiting on the day . . .”
Jim Cramer’s Meta Meltdown
With the meltdown of tech stocks in the last half of 2022, Cramer found himself back in the mainstream news in October 2022 when he nearly broke down on camera while discussing his analysis of Meta. After repeatedly recommending to buy stock in Facebook’s parent company, Cramer apologized on CNBC after Facebook plummeted by 24% and fell to its lowest price in six years, saying, “I made a mistake here. I was wrong. I trusted this management team. That was ill-advised. The hubris here is extraordinary, and I apologize.”
He didn’t get much sympathy from people like @CramerTracker, who said he’s never been contacted by Cramer or anybody representing him.
Kiss of death pic.twitter.com/p3zqRB88JI
— Inverse Cramer (Not Jim Cramer) (@CramerTracker) October 26, 2022
Meta -16% since this tweet
— Inverse Cramer (Not Jim Cramer) (@CramerTracker) October 26, 2022
Narrator: It wasn't pic.twitter.com/UT0cAFhV8Z
— Inverse Cramer (Not Jim Cramer) (@CramerTracker) October 26, 2022
Making matters worse, about three months after Cramer's apology and saying he shouldn't have been so high on the company, Meta had its best day in nearly a decade with stocks rising 25%.
I asked @CramerTracker if he felt sorry for Cramer while watching him get emotional on national TV or if he celebrated by screaming, “HA! I was right all along!”
“Didn't feel bad because he is the one urging others to buy or sell stocks, but I don't like to toot my own horn either,” @CramerTracker said. “I just track Jim's picks and do the opposite. He was a big believer in Meta, [Mark Zuckerberg], etc., for months and months, urged Mad Money and CNBC club members to buy Meta all the way down and hosted Zuck for an interview on Mad Money in which he praised him over and over and over again. I just call it how it is based on Jim's actions. Jim has probably already forgotten about Meta and has moved on to the next stock.”
Though hardly anybody is going to confuse Cramer with investing icons like Warren Buffett or Jack Bogle, does that mean you should put any significant money toward the Inverse Cramer ETF? Probably not. The White Coat Investor has always recommended investing in low-cost index funds and shying away from individual stocks. As Dr. Jim Dahle philosophizes, good investing is boring investing.
The Cramer Inverse ETF will be anything but boring.
As Nasdaq.com wrote, “SJIM [the Inverse Cramer ETF] and LJIM [the Long Cramer ETF] will be actively managed funds . . . [and] would be significantly more complex. This is not your vanilla buy-and-hold index fund.”
@CramerTracker said they have no relationship to the ETF and that they’re actually not a huge fan of the investment, because Tuttle Capital Management has too much discretion in making choices for the fund and that it won’t be a true Inverse Cramer ETF.
“The best way to Inverse Cramer is to follow my account that tracks moves straight from the source,” @CramerTracker said. “Inversing Cramer straight from the source has been very good so far.”
Money Song of the Week
Joe Ely is a west Texas music icon—a country/rock/folk/honkytonk guitarist and singer who once toured with The Clash and played with the likes of Bruce Springsteen and Lyle Lovett. He grew to fame in Lubbock, Texas when he, Jimmie Dale Gilmore, and Butch Hancock formed The Flatlanders in 1972.
He’s had an impressive career, but I was relatively unfamiliar with him until I recently attended the Austin City Limits Hall of Fame induction ceremony, and I got to see his power as a performer in a live setting.
As could be expected from a man of his location and time, he wrote songs about honky-tonks and boxcars and Billy the Kid and all kinds of other Americana. And that includes women and whiskey and the money he’s spent on both, which he sang about in the aptly titled tune Women, Whiskey, and Money to Burn.
It’s a short song with a rather basic premise, and quite honestly, his ideas about money and spending are a little . . . I don’t know . . . caveman-esque. It’s probably better for Ely to really think through his spending habits and ponder the positive aspects of delayed gratification while learning about the virtues of a solid 401(k).
But the tune is catchy with lyrics like:
“A preacher preached on the sins of man/You hold the world in the palm of your hand/I did not leave a stone unturned/For whiskey and women and money to burn.
Whiskey and women and money and burn/A taste of the high life, you'll never return/From whiskey and women and money to burn.”
It seems to me that somebody should sit down with Ely and recommend doing a Backdoor Roth IRA. But I’m pretty sure that Ely probably wouldn’t listen at all. He’d probably rather be writing songs about tumbleweeds and drinking big bottles of gin.
Tweet of the Week
We all need a little Big Bird in our life. This story confirms it.
Well I wasn’t expecting to cry after reading about Caroll Spinney, the man inside Big Bird pic.twitter.com/N9XPPuQ0Jq
— Olaf Falafel (@OFalafel) October 2, 2022
Do you think the Inverse Cramer ETF will make money in the long run? What do you think about stockpickers on TV? Have you ever taken Cramer’s advice and made money? Comment below!
[Editor's Note: For comments, complaints, suggestions, or plaudits, email Josh Katzowitz at [email protected].]
The opposite of crazy is still crazy!
From my email inbox:
Why is this in my inbox? That’s the question I ask myself with almost every post sent with Mr. Katzowitz’s byline, unfortunately. This is not why I subscribe to WCI. Please consider a separate email list for his personal rants. Keep WCI for the classic WCI content or you’ll lose readers.
I appreciate all Dr. Dahle has done over the years,
Here was my response:
Thanks so much for reaching out and letting us know your thoughts. Since I will continue to write columns every other Sunday, the emails will automatically continue to show up in your inbox. But it shouldn’t be a huge problem. You can just delete the emails containing my column and then you won’t have to think about them for another two weeks.
The only pushback I’ll give you is your use of the phrase “personal rant.” I’ve been writing columns for WCI for about a year now, and I can really only think of one column that could be considered a rant (the one about not posting stupid things on social media). Otherwise, I’ve been talking to all kinds of sources, doing original reporting, doing oodles of research, and writing in the same manner as the journalist I’ve been for more than two decades now. Whether it’s writing about what you should do if you’re retiring during a bear market or if the Backdoor Roth process was going to go extinct, or more fun stuff like docs who have become TikTok stars or talking to medical students going out into the real world, or even some fun stories from financial history, I’m not just ranting and vomiting out my opinion. I’m actually talking to people who know much better than I do about these kinds of topics and doing the research that’s necessary to make what I hope is a cohesive point.
In preparing my next column two weeks from now, I interviewed a former US senator and gathered quotes from listening to two former presidential candidates speak. It’s on a controversial topic in the WCI community, but I’m not going to be ranting about anything in that column.
If, as you believe, we’re losing readers because I write about those kinds of topics, well, I guess all those readers will be missing out on what I consider to be good and interesting information. Like Dr. Jim Dahle always says, take what you find useful and leave the rest.
Anyway, I just took a little umbrage about the “personal rant” comment because I thought it was a mischaracterization of what I do. Otherwise, thanks again for reaching out and giving me the opportunity to explain my side of things. And if you end up deleting all my columns before you read them, that’s not a problem for me. I just hope you feel like WCI is giving you value the other six days of the week.
And just in case you missed any of the columns I just mentioned:
https://www.whitecoatinvestor.com/dont-post-stupid-things-on-social-media/
https://www.whitecoatinvestor.com/retiring-bear-market-high-inflation/
https://www.whitecoatinvestor.com/should-you-do-your-backdoor-roth-ira-2022/
https://whitecoatinvestor.com/tiktok-doctors-social-media/
https://www.whitecoatinvestor.com/fourth-year-to-the-real-world-part-1/
https://www.whitecoatinvestor.com/jack-bogle-invent-the-index-fund/
Hey, many of my columns are just vomited out of my brain. That doesn’t necessarily make for a bad post. 🙂
But the point remains, The White Coat Investor is not a personal blog. There is content on here written by dozens or even hundreds of people if you include guest posts.
Complaining anonymously about the content of a free website. Gotta love the internets.
At this point he’s pretty much covered every topic. He’s got to have fillers like this at this point.
Yes, there’s only so many permutations of “don’t be dumb with money” to fill a personal finance blog with almost daily posts, but still I applaud original content like this, even if it’s a bit like a news magazine format.
I dunno, I’ve got a list of 30 things to write right now, many of which have never been covered on the blog before. There’s always something new to write about.
We certainly aren’t trying to post “fillers”. Remember we used to not post anything on Sundays at all. Josh posts now on two Sundays a month. It hasn’t reduced anything else we’re doing though, it’s just an addition to what we were doing.
I view Jim Cramer as the ultimate huckster. He is able to continue in the business despite horrible advice and lousy predictions. Other than that, I simply don’t care what his opinion is on anything. He has absolutely no insight into the Market that is valuable to me. Kinda like Jim Rogers and Paul Krugman. Agendas, not knowledge.