Jim Cramer and Steph talk

My Portfolio is Crushing the S&P 500


Like everyone else who has an internet email address, I receive lots of email.

Some of it is stuff I actually look forward to reading.

Some of it I never read or even see thanks to spam filters.

Then, there is the questionable stuff like this one I received from Jim Cramer’s folks.

From: Jim Cramer
To: Fumbled Returns
Subject: My Portfolio is Crushing the S&P 500

Since inception on January 1, 2002, the Action Alerts PLUS portfolio’s total average return has averaged more than DOUBLE the return of the S&P 500 for the same time period.

This statement and chart is, of course, meant to catch your eye. After all, they ultimately want to sell you on their stock picking service called Action Alerts PLUS.

Being mildly interested in statistics, charts, rates of returns and they way they are represented, I did take notice but not in the way they wanted.
First of all, why did they pick only the S&P 500?

Yes, it is a well known index; but so is the DOW and NASDAQ.

The DOW has earned 22% since 1/1/2002 and the NASDAQ has earned 35%. Obviously not double either one of those indexes and that does not even take into account reinvesting any dividends or stock splits.

So, obviously they picked the lowest index return for that given time period.

If you had, say just invested in a NASDAQ tracking fund, you probably would have done nearly as well as my buddy Jim Cramer.
But, of course, here at Fumbled Returns, we as well as most individual investors want to do even better.

So Does Jim Cramer.
So, what could be even better?

OPM. Other Peoples Money!
Lets look at the Action Alerts PLUS fine print.

If you subscribe to Action Alerts PLUS, you pay the special price of only $299.95 — a $175 savings off the regular price of $474.95 — for an annual subscription. Unless you call to cancel before the end of that year, your subscription will automatically renew for another year at the then-current subscription price. This offer applies only to new annual subscriptions to Action Alerts PLUS and is subject to change at any time. Void where prohibited.

$299.95 vs $474.95 which you will be automatically billed after the one year introductory price = difference of $175 dollars: A 58% annualized return!
So he gets a 58% return on your money. Wow!

This reminds me of a quote by Norman Augustine.

If stock market experts were so expert, they would be buying stock, not selling advice.

So far, we have determined that he has quoted the worst performing index for a really obscene length of time.

And, determined that he can do even better with your money.

Now, to be perfectly fair, Jim Cramer does happen to know a thing or two about stock investing. After all, his returns are not horrible nor is he an idiot when it comes to what to look for in stocks.

It’s just that you do not have to pay him a bunch of your hard earned money to do just as well or even better.

Since I already posted one quote, here is another.

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.

In other words, give someone a stock tip and you give him a stock to invest in. Teach someone how to pick that stock or another good one, and you teach that person how to invest wisely.

Much of this information can be had here, on the internet, at a bookstore or even your local library.

Now, I am no expert, and I will never claim to be, but I do have my own method to my stock picking madness. So, how has my method of picking watch list stocks based on my screens along with a couple hype or trending stocks thrown in along the way just for good measure done?

Lets take a look.

First, I have not been tracking Fumbled Returns Watch Lists since 2002, but I have been doing so since early 2009. So instead of charting from 2002, I will attempt to compare apples to apples and chart from early 2002.

I found some historical data at other sites such as Click here.

So, Combining my returns with JC (Jim Cramer) and his yard stick of the S&P we have . . .

As you can see, for the past year and almost half, I have not only been crushing the S&P, but totally stomping Jim Cramer’s returns since 2009!

If I can do it, so can you!

Until next time . . .

Be Good Do Well Have Fun

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