Trading Yesterday’s (Actually April’s) News

We’ve commented in the past on the irresponsible trading decisions that some of Jim Cramer’s viewers make. Thursday’s episode of Mad Money was a case in point. Shortly into the episode, Cramer told his viewers that there was money to be made in DJO and went on to hit all of his bullish sound effects. As is the case with most of the stocks Cramer recommends, the stock immediately traded up on his recommendation as shown in the chart below.

Actually, if you look at the chart closely, you may be thinking that the stock’s reaction was somewhat muted in that it only rose by 50 cents. Afterall, most of the time when Cramer recommends a stock it goes up by more than a measly 50 cents. What makes this 50 cent jump so notable however is that last night’s episode of Mad Money was a rerun from April, and it wasn’t as if CNBC hid the fact that the show was a rerun. During the entire time that Cramer was recommending DJO, there was a graphic in the lower left portion of the screen which said “Previously Recorded 04/19/06”.

Comments

[Mrbubbs]

Don't forget Cramer's tout of Mindspeed -- stock's up over 5% today because they reran a March epsisode of Realmoney. Never mind that Cramer pumped the stock in the mid $3 range, and it is now trading around $2.50.

[jkw]

So the trick is to keep track of what stocks he has recommended on past shows and buy them as soon as a rerun starts. Put in a sell limit order for about 20-50 cents higher depending on how much risk you are willing to take. And make sure the price hasn't already gone up.

[bsteve]

this is a great idea which will work for at least another few days... but how do you know which episode will be on? Can anybody help me out here?

[Red Bull drinkin' CNBC monomaniac]

1) hey, thanks -- great observation. I was watching the other day and thought the same thing. In fact, you can pretty much bet JC will take a vacation anytime a major holiday comes up -- that'll be the time to take some swing trade positions and cash out.

2) It hasn't been confirmed yet, but I heard a STRONG rumor that Herb Greenberg will soon have his own show on CNBC. As you can see with the new "Fast Money," CNBC is trying to broaden its portfolio and accomodate a plethora of different trading styles. Fast Money reminds me a lot of Al Pacino's movie "Two for the Money." Greenberg's blog is already a huge hit -- a show would seal the deal and put Greenberg in the spotlight, where he belongs.

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