Tesla Stock: Is Inverse Cramer Losing Its Edge?
Tesla stock has always been a subject of fervent debate, attracting both Uber bulls and Perma bears. As one of the most highly shorted stocks in the NASDAQ, it has also emerged as one of the best-performing high-cap stocks over the past five years.
One prominent figure who has been consistently bearish on Tesla is Jim Cramer, the famous host of CNBC’s Mad Money. Throughout his long career as a financial commentator, Cramer has made notable predictions, including his now-famous statement during the IPO that he wouldn’t even rent Tesla stock, let alone buy it. He has also advised his viewers to sell Tesla shares at various points during the company’s significant growth waves.
Cramer’s track record, which includes blunders like his support for Bear Stearns before its collapse and his endorsement of Sam Bankman-Fried before the FTX collapse, prompted investors to devise an online index fund called “Inverse Cramer.” This fund advises investors to do the exact opposite of what Cramer recommends, and by doing so, they have managed to beat the returns of the S&P 500.
Given the prevalence of inverse Cramer investing, Tesla shareholders have rejoiced every time the talk show host says something negative about the company. Even Elon Musk himself has piled on with excitement. However, recent developments suggest that the inverse Cramer strategy may no longer be as effective.
Cramer’s most recent pessimistic prediction about Tesla stock was met with celebration, but the stock has since dropped 25%, wiping out over $100 billion in value. While some may dismiss this as a lucky guess, Cramer also predicted that $180 would be the bottom for Tesla stock, and since then, the stock has gone up 5%.
It seems that blindly following Cramer’s predictions is no longer a profitable strategy, at least in the short term. So the question remains: should investors still rely on Cramer or switch to the inverse Cramer approach? The CNBC host has been surprisingly accurate in his recent short-term predictions for Tesla stock. What are your thoughts on this? Let us know in the comments below.
Analyst comment
Neutral news.
As an analyst, the market for Tesla stock may experience increased uncertainty as investors question the effectiveness of the inverse Cramer strategy. Traders may hesitate to blindly follow Cramer’s predictions, potentially leading to a more cautious approach and increased volatility in the short term. Investors will need to carefully consider their investment strategy and assess the impact of Cramer’s predictions on Tesla stock.
