On August 7, CNBC sent a letter to Barron’s that, among other things, reinforced the point that any Barron’s mention of leaks from the show would be “false and reckless” (CNBC’s emphasis), about the strongest legal language available. The reporting culminated in a tense, four-hour interview on August 13 that had all the trappings of a deposition. CNBC taped it, while its lawyers gave a presentation devoted to refuting any leak allegation and building a case that publishing such a suggestion would be libelous. The discussion about Cramer’s stock-picking prowess proceeded almost on a separate track and was clearly secondary to CNBC, if not to Alpert.

The story that ran on August 20 made no mention of leaks. To the ire of CNBC officials, a graphic headlined “10 Biggest Pops,” appeared with the story, listing some stocks that moved up before Cramer picked them. However, the caption concluded that Cramer “jumps on stocks that are in the news and moving up,” a perfectly innocent explanation.

The main story, though, is decidedly unfriendly to Cramer. Its tone is borderline contemptuous, and it describes CNBC as evasive to the point of being unprofessional, especially for a news organization.

When we asked Cramer and CNBC for their own records of Mad Money’s stock-picking performance, they had more excuses than a Tour de France cyclist dodging a blood test.

Cramer himself is shown as hostile to measuring his own picks. Alpert writes:

Hoping to get Cramer’s advice on how to measure his Mad Money picks, I called him a few weeks ago. He tore into me. “I’ve never read a single article that I thought wasn’t a massive distortion of what the show’s all about,” he said. When I said I just wanted to see Mad Money’s record, he replied: “I’ve never seen an analysis that I’ve regarded as honest, and I doubt yours is any different.”

And the story says that “a comprehensive and careful review” shows Cramer hasn’t beaten the market at all and in fact trails it badly, depending on the method of measurement and time period covered.

Faced with the fact that CNBC airs stock picks but keeps no official record of them, the story recounts, Barron’s found its own, one on a site called yourmoneywatch.com, that lists 1,200 picks, and a second on the Web site of TheStreet.com, a company closely associated with Cramer, which contains more than 3,400 of his picks. (Pinpointing the latter list takes some doing, but it can be found at here, by clicking on the “stock screener” button, then “find these stock picks” without selecting any criteria.)

Alpert found that the market beat Cramer by at least four percentage points—a big number—when using the 1,200-stock list and was flat-to-down using TheStreet.com’s broader list.

The story says CNBC countered with its own database, of 445 stocks, a fraction of Cramer’s total mentions, which number as much as 7,000 a year, but a list that it believed are fully researched, bona fide picks, not mere mentions. Using that list, the story says, Cramer appears to beat the market by 1.8 percent over two months. But Alpert found flaws in the database.

It turns out that CNBC did its analysis incorrectly, and that the stocks beat the S&P by … 1.2% over two months. CNBC measured the stocks’ performance against the average performance of the S&P year-to-date, instead of against the performance of the S&P from the date of each stock pick. Also, it included more than 100 recently recommended stocks that weren’t held for the full one- or two-month holding period that CNBC claimed.

The ban, if that’s what it is, on Barron’s reporters remains largely in effect, though Steel, the CNBC spokesman, notes that Barron’s reporters have appeared on at least two occasions since the dust-up. (While the dispute was going on, it should be noted, Dow Jones was bought by News Corp., which owns a rival business-news network, casting uncertainty over a content-sharing agreement between Dow Jones and CNBC.)


CNBC still feels aggrieved by the story, although, relieved to have eliminated the leak angle, it did not publicly challenge it. The network and Cramer today insist that he does beat the market and that Barron’s’s data were erroneous and its methods designed to make him lose.

CNBC says (as it said in the Barron’s piece) that the list from yourmoneywatch.com was not authoritative and argues that the list on the Web site of TheStreet.com is not valid, either. CNBC summed up its position in its August 7 letter to Barron’s:

Mad Money is produced entirely by CNBC. The “Mad Money Performance” section of TheStreet.com is maintained by a TheStreet.com contributor who has no ties with CNBC or Mad Money, and neither we nor Jim review his work.

Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.