CEO of Tesla, SpaceX, and Twitter Elon Musk recently mocked Jim Cramer in response to a tweet from Dogecoin co-creator Billy Markus. The billionaire stated, “The Force is strong with inverse Cramer.”
Elon Musk and Billy Markus Take Shots at Jim Cramer on Twitter
It turns out that the meme coin Dogecoin co-creator Billy Markus who goes by the name Shibetoshi Nakamoto on Twitter also tracks down the Inverse Cramer data. So, when the crypto bull run charged ahead, he just couldn’t resist taking a rib at the CNBC host.
The Dogecoiner sarcastically tweeted, “Jim Cramer is good at his job.” Of course, it elicited mixed responses from some of his 2 million followers and others who caught his post. One of them was Elon Musk who said, “The Force is strong with inverse Cramer.”
Musk has been a known supporter of cryptocurrencies, especially Dogecoin. In fact, he even added $500 million to the market cap of DOGE last month in just a span of 15 minutes. Unfortunately, he already moved on to AI based on his tweet prior to the recent shot he made at Cramer. Regardless, it’s still good to know that he’s still on our side.
The Inverse Cramer Strategy
As a recap of what we discussed previously, the Inverse Cramer strategy is a trading approach that involves doing the opposite of what CNBC Mad Money host Jim Cramer advises investors to do. The strategy assumes that Cramer’s financial advice will often bomb, so by betting against his top picks, traders and investors can potentially yield better returns.
The tactic is so popular that a website called Inverse Cramer ETF was even put up to track his forecasts. It’s even publicly traded with the ticker SJIM, having an average volume of 43,150, outstanding shares of 219,970, and total net assets of $100,000. As of the 52-week range, the stock has been valued between $24.70 and $26.26.
This approach has been successful before according to an analysis from Seeking Alpha. Based on the data it compiled regarding the predictions of Cramer, a 100 million USD investment over the past two years is estimated to compound to 147.20 million USD today if the Inverse Cramer was religiously applied in each of his investment picks during that period.
For instance, Cramer advised investors to pivot towards gold rather than cryptocurrencies, particularly Bitcoin, in January. He reasoned out that the world’s oldest crypto possesses a lack of acceptance as a currency or reliable store of value. However, given the rising institutional and retail interest in cryptocurrencies, some investors are seeing this as a strong “buy” signal for Bitcoin and are betting against Cramer’s advice.
Not so surprisingly, the value of Bitcoin shot up from nearly $23,000 at the time of our report to around $27,700 as of writing. In fact, BTC even hovered over $28,500 following the announcement of the UBS and Credit Suisse merger this week—a value not seen since June 2022.
Let’s not even get to the part where he told investors to buy Silicon Valley Bank (SVB) shares at the start of February this year. He said it was a “compelling” and “cheap” stock at that time when it was trading at $320 a pop. And now, here we are.
It turns out that Cramer’s predictions have been a hit-or-miss affair in the past couple of years. That also means that the Inverse Cramer strategy may not work in most cases. Therefore, investors should not treat the tactic as a foolproof analysis tool all the time.
Giancarlo is an economist and researcher by profession. Prior to his addition to Blockzeit’s dynamic team, he was handling several crypto projects for both the government and private sectors as a Project Manager of a consultancy firm.