If you've spent any time following financial media, you've heard of Jim Cramer – the animated, button-smashing host of CNBC's "Mad Money." But you may have also encountered the term "Inverse Cramer" – a strategy that suggests doing the exact opposite of whatever Cramer recommends.
This phenomenon has grown from a Wall Street inside joke to an actual investment strategy with dedicated tracking services and, until recently, its own ETF. But what's the real story behind Inverse Cramer, and does the data support the strategy? Let's dive into the world of Jim Cramer's track record and the curious case of betting against one of TV's most famous stock pickers.
Who is Jim Cramer?
Before you can get the Inverse Cramer phenomenon, it helps to know the man behind the recommendations.
Jim Cramer began his Wall Street career as an investment banker at Goldman Sachs in the mid-1980s before founding his hedge fund, Cramer & Co. (later Cramer, Berkowitz & Co.) in 1987. The fund reportedly delivered average annual returns of 24% until Cramer left in 2000 to focus on his media career.
In 1996, Cramer co-founded TheStreet.com, a financial news and literacy website. His television career took off in 2005 when CNBC launched "Mad Money," a show where Cramer gives enthusiastic (often theatrical) stock recommendations and market commentary.
Today, Cramer appears on both "Squawk on the Street" in the mornings and hosts "Mad Money" in the evenings. He's known for his rapid-fire delivery, sound effects, and bold calls on stocks. He's also extremely prolific, making dozens of stock recommendations weekly across TV and social media.
The Birth of the Inverse Cramer Theory
The idea of "Inverse Cramer" didn't spring up overnight. It grew gradually as market watchers spotted a pattern: some of Cramer's most confident stock picks would tank almost immediately after his recommendation.
Some infamous examples that fed the Inverse Cramer narrative:
In June 2008, Cramer told viewers not to sell Bear Stearns stock, claiming "Bear Stearns is fine!" just days before the company collapsed
In 2022, Cramer enthusiastically recommended Silicon Valley Bank (SIVB) a month before it dramatically failed
He called Meta (Facebook's parent company) "absurdly undervalued" before it dropped over 60% in 2022
While these cherry-picked examples don't show Cramer's entire record, they were memorable enough to spark the idea that flipping his recommendations might be profitable.
The idea exploded on Reddit's r/WallStreetBets and Twitter, where everyone went all in on "Inverse Cramer" memes and tracking how stocks performed after his recommendations.
Is Jim Cramer Really That Bad at Picking Stocks?
Despite the popularity of the Inverse Cramer narrative, the data on Cramer's actual track record is mixed.
A 2023 analysis by Uptrends.ai examined Cramer's Twitter stock picks over six months and found that his recommendations would have resulted in an 83% loss if followed exactly. The study found his average pick lost about 4% over a two-week period.
However, other studies show different results. A 2017 analysis by the Wharton School that tracked Cramer's Action Alerts Plus portfolio from 2000 to 2017 found it returned about 4.08% annually compared to the S&P 500's 7.07% over the same period – underperforming the market but still positive.
Most notably, Cramer has been right about the "Magnificent 7" tech stocks (Microsoft, Apple, Nvidia, etc.) that have driven much of the market's gains in recent years. Even Tuttle Capital Management, the company behind the Inverse Cramer ETF, acknowledged this, describing Cramer as "a broken clock that's right twice a day."
Reality is probably somewhere in the middle – Cramer makes so many calls (often hundreds each month) that some will inevitably be spectacular failures while others turn out to be excellent picks. His high-volume approach to stock recommendations makes it difficult to assess his overall accuracy.
The Inverse Cramer ETF: Rise and Fall
In 2022, Tuttle Capital Management filed for two ETFs based on Cramer's recommendations:
The Inverse Cramer Tracker ETF (SJIM): Which bet against Cramer's picks
The Long Cramer Tracker ETF (LJIM): Which followed Cramer's recommendations
Both funds launched March of 2023, but LJIM was quickly shuttered September of 2023 due to lack of interest. The Inverse Cramer ETF (SJIM) lasted a bit longer but was also liquidated in February of 2024, just 11 months after its launch.
According to Matthew Tuttle, CEO of Tuttle Capital Management, the ETF was created "to point out the danger of following TV stockpickers, Jim Cramer specifically, and the total lack of accountability." He felt they had "accomplished that mission," but admitted "retail investors are more focused on volatile products and the interest in a long/short portfolio never fully materialized."
At its closure, the Inverse Cramer ETF had only $2 million in assets under management – a tiny amount for an ETF – and had significantly underperformed the S&P 500 during its short lifespan. From launch to February 2024, SJIM was down 15% while the S&P 500 gained 25%.
Running the ETF was labor-intensive, requiring Tuttle's team to constantly monitor Cramer's various outlets to see if he said anything about any stock. The strategy was also highly subjective, as Cramer makes numerous calls, and deciding which ones to bet against required discretion.
Inverse Cramer Lives On
Despite the ETF's failure, the Inverse Cramer strategy still has plenty of followers. Several services track and maintain Inverse Cramer portfolios:
Quiver Quantitative's Inverse Cramer Strategy
Autopilot's Inverse Cramer Tracker (up 26% as of March 2025, according to their data)
Multiple Twitter accounts that follow Cramer's picks and suggest opposite trades
These trackers monitor what Cramer says on his TV shows and tweets, then build mock portfolios that bet against him.
Why the Fascination with Inverse Cramer?
The Inverse Cramer phenomenon sticks around for several reasons:
It's Entertaining: Cramer's over-the-top style makes him a perfect target for jokes. The theatrical button-smashing of his show often feels at odds with serious investing, creating comedy gold.
Contrarian Appeal: Many investors love to be against the crowd. Betting against a loud TV personality just feels satisfying.
Confirmation Bias: After people decided "Cramer is always wrong," they started highlighting only his misses while ignoring his wins.
Retail Rebellion: In today's world where regular investors have more market access than ever (like commission-free trading), taking shots at Wall Street experts has become a form of sticking it to the establishment.
Real Problems with TV Stock Picking: The Inverse Cramer trend highlights legitimate issues with entertainment-driven stock tips. The short-term, high-volume nature of TV recommendations rarely aligns with thoughtful investing.
What Can Investors Learn from the Inverse Cramer Phenomenon?
Whether you love or hate Cramer, the Inverse Cramer trend offers some good takeaways:
No Expert Bats 1.000: Even pros with decades of experience make bad calls. Diversification is critical no matter whose advice you follow.
Entertainment vs. Investment Advice: Financial TV exists mainly to entertain and sell ads, not to give you tailored investment guidance.
Short-term vs. Long-term Thinking: Cramer's rapid-fire picks often latch on to catalysts and hype, while most regular investors do better with long-term strategies.
Overconfidence is Dangerous: The certainty behind some stock recommendations far exceeds how predictable markets actually are.
Follow the Money: Knowing what drives financial media can help you better judge the advice they're dishing out.
The Bottom Line
The Inverse Cramer strategy exists somewhere between legitimate investment approach and internet meme. While some of Cramer's recommendations have indeed aged like milk, the data doesn't back up completely flipping his advice as a winning strategy.
The short life of the Inverse Cramer ETF shows how tough it is to turn a Twitter joke into a real investment product. Active management costs money, and strategies built on pure contrarianism rarely work consistently.
For most people, a well-balanced portfolio beats trying to outguess TV personalities about the next hot stock.
FAQs About Jim Cramer and the Inverse Cramer Strategy
What does "Inverse Cramer" mean?
"Inverse Cramer" means betting against Jim Cramer's stock picks. The strategy suggests doing the opposite of whatever Cramer recommends – selling when he says buy and buying when he says sell – might bring better returns than following his advice.
What is the Inverse Cramer phenomenon?
The "Inverse Cramer effect" is an internet phenomenon referring to the tendency for financial assets recommended by Cramer to sometimes underperform after his endorsement. Over the years, the concept has become a running joke in investing communities, especially with retail traders on social media.
Does Jim Cramer outperform the S&P 500?
According to a 2017 Wharton School study, Cramer's Action Alerts Plus portfolio returned an average of 4.08% annually from 2000 to 2017, while the S&P 500 returned 7.07% during the same period. However, his performance varies a lot depending on the timeframe analyzed and which recommendations are included.
What happened to the Inverse Cramer ETF?
The Inverse Cramer Tracker ETF (SJIM) was launched by Tuttle Capital Management back in March of 2023 but liquidated in February of 2024, less than a year after its debut. The fund had only accumulated about $2 million in assets under management and had underperformed the broader market during its existence.
How accurate are Jim Cramer's stock predictions?
Cramer's accuracy is difficult to measure definitively due to the volume of his recommendations and varying timeframes for evaluation. Some analyses have found his stock picks slightly underperform the market, while others show worse performance. One study looked at the track record of stock market "experts" who predicted the market's direction and found their accuracy rate was only 47%, with Cramer scoring 46.8% based on 62 forecasts.
Is there still a way to follow the Inverse Cramer strategy?
Yes, even though the official ETF shut down, several tracking services still maintain Inverse Cramer portfolios, including Quiver Quantitative and Autopilot. These services watch what Cramer recommends and build mock portfolios that bet against him.
Why do people follow or inversely follow Jim Cramer?
People follow Cramer because he's entertaining, has decades of Wall Street experience, and makes investing seem accessible. Those who "inverse" him typically do so because of his mixed track record, especially his spectacular misses like recommending Bear Stearns before its collapse or Silicon Valley Bank before it imploded.
What investment approach is better than following or inversely following TV personalities?
Most money pros suggest a disciplined and diverse investment strategy made on your own financial situation, timeline, and comfort with risk. Low-cost index funds that follow major market benchmarks have historically beaten most actively managed portfolios over time and cost less than trying to pick stocks based on TV recommendations.