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Prominent Investor Defends Jim Cramer From Fierce Criticism

CNBC  (CMCSA) – Get Free Report stock-picking personality Jim Cramer has faced some enormous criticism recently.

His predictions on the success of Wall Street firms’ share values have, like most stock market prognostications, experienced both wins and losses.

DON’T MISS: Jim Cramer Recommends That Investors Hold Tight to One Health Care Stock 

But social media reaction to Cramer’s picks has, not surprisingly, focused on the misses.

In fact, roasting Cramer’s stock picks has become such a popular pastime that the Inverse Cramer Tracker ETF (SJIM)  was created. It is an exchange-traded fund that buys and sells stock at precisely the opposite of Cramer’s advice.

Brannigan Barrett, founder and chief investment officer of Habitus Capital, came to Cramer’s defense on May 16.

Poor @jimcramer takes alot of social-media heat. However there is a great psychology lesson from this social-experiment being conducted at Jims expense. Its called negativity-bias. Because social media accounts point out every time he gets it wrong and those tweets go viral. The assumption is that Jim Cramer is an inverse indicator and makes bad market calls. Ask any newbie trader about J Cramer and they will tell you he is just hot air, selling tickets. When in reality , Jim makes more good calls then bad. Unfortunately in this day-n-age, social media has networking power to compound this negativity bias. Be careful what you believe, don’t be blinded by your own biases. Jim, you can DM me a thank you!

Cramer did more than just direct message his appreciation. He publicly posted a retweet of Barrett’s post.

“Thanks, man,” Cramer wrote. “Your tweet means a great deal to me. A great deal.”

As for the Inverse Cramer Tracker ETF, its performance isn’t setting any records.

“Our first clue that this inverse ETF may not beat the market, even if and when Cramer’s picks are themselves market laggards, comes from its performance since inception,” wrote MarketWatch, published on MSN  (MSFT) – Get Free Report.  “Tuttle Capital calculates that Cramer’s picks lost 0.5% through May 1, versus gains of 4.9% for the S&P 500  (^IN)  and 9.9% for the Nasdaq 100 Index  (^NDX) .”

“Though that would seem to be an ideal setup for the inverse fund turning a profit, the Inverse Cramer Tracker ETF actually did even worse, losing 3.1%,” Marketwatch added.

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