How can someone make money shorting Jim Cramer’s stock picks?

Jim Cramer’s stock picks don’t always seem logical to me. I think that when he is right it is often a self fulfilling prophecy where people think the stock will increase in value and it does because all of his viewers go out and buy it. Truth be told, all long term value increases will happen because the company is making money. You could be taking a big risk by shorting or buying anything that Jim Cramer discusses, only basing your decision on that data.

Assuming you aren’t an institutional investor, and you have a limited amount of time to pick stocks, you might want to use his info for ideas that help you focus into individual sectors or companies. Once you get that far, I would use Yahoo Finance, Value Line reports, the 10K’s and any other information you can get your hands on in order to get an accurate assessment of the company’s value. You could try to use some P/E ratio analysis to try to determine this, but I personally would use the Capital Asset Pricing Model. If you are comfortable with statistics, there are a number of great models you can use, many of them used by analysts at JP Morgan, Merrill Lynch and GS.