As of early March 2023, there are now ETFs that allow investors to bet alongside stock picks and recommendations made by investor and television personality Jim Cramer and to bet against him. Here’s where the idea for the ETFs came from and why they’re important.
Launching Cramer ETFs: Tuttle Capital Management launched The Inverse Cramer Tracker ETF SJIM and The Long Cramer Tracker ETF LJIM, giving investors a way to go short or long the stock recommendations of Cramer.
Tuttle Capital Management said the ETFs provide convenient “one-ticker” access to take sides on Jim Cramer’s recommendations that may otherwise be difficult to execute on their own.
“This is something that’s been years in the making,” Tuttle Capital Management CEO and CIO Matthew Tuttle told Benzinga on the PreMarketPrep morning show Friday, March 3.
Tuttle said he’s been making products over the years and one trend remains true.
“Been creating since the 80s and noticed the consensus seems to be wrong a lot, but how do you monetize that”
Tuttle said that Cramer represents the consensus.
“(He) swings at every pitch. That’s not a criticism, he has to.”
Tuttle said the new ETFs are a great product for people looking for some sort of diversification for their portfolio, something they should be doing these days.
“The consensus tends to be wrong, that’s what I love about this.”
When asked about if Cramer had heard of the ETFs, Tuttle said the CNBC host is not a fan of the idea.
“He knows about it. He made some comments and tweets.”
Related Link: Want To Bet Against Jim Cramer? New Inverse ETF Filed By The Man Who Took On Cathie Wood
Making the Selections: Tuttle was asked how the selections for the new ETFs are made as it's not the same as launching an ETF betting against the public holdings of Ark Innovation ETF ARKK, when the ETF manager launched the now-known AXS Short Innovation Daily ETF SARK.
“Unfortunately, we’ve got to watch Mad Money every night,” Tuttle said, which drew laughs from the PreMarket Prep co-hosts.
Co-host Dennis Dick said he also watches “Mad Money” every night, the show hosted by Cramer on CNBC, a unit of Comcast Corporation CMCSA.
“I feel bad for you,” Tuttle said to Dick.
Along with watching Mad Money, Tuttle said he and a team of two people will watch Cramer’s morning appearances on CNBC.
“We’ve got to watch him. We’ve got to see what he says.”
The challenge will be determining if Cramer’s comments are definitively bullish or bearish about a stock or sector, which will lead to action by Tuttle and his team.
The picks in the ETFs will not include the selections by Cramer for his investing club, which Tuttle said could have other people working on it and is more focused on longer-term stock picks.
“What I’m concerned about is what’s coming out of his mouth today, tomorrow.”
Tuttle said the plan is to invest as soon as possible, if it's on CNBC or Twitter during market hours, the trade is placed right away. For picks made on “Mad Money,” the ETF will make trades the next morning at market open.
“Once he’s out on something, I want to be in that or opposite in that as soon as possible.”
Tuttle said one key difference between the ETFs is when Cramer doesn’t like a certain stock or sector. In SJIM, if Cramer doesn’t like something the ETF goes long, in LJIM if Cramer doesn’t like something the ETF is not shorting it.
The ETFs will mostly be equal-weight holdings, and Tuttle added that highly volatile stocks like meme stocks could have a lower weighting.
Tuttle said that the SEC wouldn’t love the thought of having cryptocurrencies in the ETF, which means it won’t be able to bet for or against obscure cryptocurrencies.
“In SJIM we own BITO, that’s the easiest way to get exposure to crypto,” Tuttle said referencing the ProShare Bitcoin Strategy ETF BITO.
The holdings of the ETFs will be updated daily on the Cramer ETFs website. Tuttle also added that a daily email showing the trades of each day will be sent out each night after market close or first thing in the morning.
Dick told Tuttle that the new ETFs sound very labor-intensive.
“Sometimes the best things out there require the most work,” Tuttle said. “Someone needed to do this.”
Read Next: Jim Cramer Lashes Out At Inverse ETF 6 Days After Offering His Only Comments
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