Blog - Investing Notes

August 17, 2006 - Mad Money Response from Kevin Goldman of CNBC

In our blog entry of 8/15/06, we summarize a research paper examining the stock market's reaction to 246 initial buy recommendations made by Jim Cramer on Mad Money episodes between July 28, 2005 and October 14, 2005, as recorded by YourMoneyWatch.com. On 8/16/06, Kevin Goldman of CNBC, sent the following note:

Your August 15th blog titled "It's a Mad, Mad, Mad, Mad Market?" has come to my attention today. I am astonished you would print an entry based on student research that is deeply flawed and failed to take into account widespread, publicly available facts. Your entry made unsubstantiated accusations and statements that are inaccurate and damaging, including your statement that, "As suggested by the data, establishes a means for stock market manipulation by those privy to Mr. Cramer's buy recommendations prior to broadcast." To repeat, the findings in your "article" are based entirely on a study that is seriously flawed.

The writers of the posting upon which you based your article, were either completely unaware of or failed to take into consideration that, during the time period they examined, Jim Cramer had a nationally syndicated radio show, available in over 70 markets nationwide beginning at 2 pm ET and available globally on the Web at 4 pm ET every business day, well in advance of the 6 PM initial broadcast of "Mad Money w/Jim Cramer." Jim often mentioned stocks on the radio show and in his columns throughout the day on TheStreet.com that were later discussed on "Mad Money w/Jim Cramer." Additionally, Jim does not choose stocks in a vacuum - he, like other professional investors, reacts to various news in the marketplace, such as a good quarter, a mention in other media, an analyst upgrade or a settlement of a lawsuit.

Most importantly, CNBC has instituted stringent policies and procedures designed to prevent the dissemination of the content of "Mad Money w/Jim Cramer" prior to broadcast.

Kevin Goldman
Vice President, Media Relations
CNBC

In summary, Mr. Goldman states that the underlying study is deeply flawed and that CNBC has policies and procedures designed to prevent stock market manipulation based on Mad Money content.

We asked Mr. Goldman's permission to post his message so that readers might understand CNBC's position. We have added a note to the blog entry of 8/15/06 linking to this response. We have also made the wording of the statement singled out by Mr. Goldman more precise.

Separately, we have informed the contact author for the study of CNBC's position.