Mad Money: Does the Combination of Stock Recommendation and Show Segment Matter?

Abstract

We analyze three short-term return metrics (Close-to-Open, Open-to-Close, and Close-to-Close) of stocks recommended by Jim Cramer on his CNBC show Mad Money. We differentiate among five different recommendations and across five different segments of the show. The objective is to determine if the pricing impact differs in magnitude and persistence, depending on the nature of the recommendation and the segment of the show in which the recommendation appears. Results indicate that the pricing impact is greatest for stocks discussed on longer-duration segments of the show. An asymmetric effect in terms of "buy" versus "sell" recommendations is also found.

Keywords: Recommendation, Investor Behavior, Retail Investor, Media Attention