I really don’t like pundits very much. And I really dislike the commentary – which is generally seriously unfounded, out of date and not based on any empirical evidence – that goes along the lines of: "XXXX believes there is a less than 20% probability of XXX".

CXO advisory group has some interesting commentary on Jim Cramer – "on of the most visible and prolific members of the financial media". Get this:

• Mr. Cramer is right about 50% (25 out of 51) of the time with his stock market predictions, prone more to headline hyperbole than equivocation.
• His predictions sometimes swing dramatically from optimistic to pessimistic, and back again, over short periods. It is difficult to infer his guiding valuation theory, if he has one. We wonder whether he tends to be swayed by the arguments of forceful advocates with whom he most recently interacted.
• Investor sentiment is sometimes an important contrarian indicator for him. When he sees most investors leaning one way, he advises to go the other way. [See our blog entries of May 19 and October 27, showing that broad investor sentiment is backward rather than forward looking. The entry of May 27 suggests sentiment expressed as futures positions by classes of investors may have modest predictive value.]
• He sometimes anchors on historical analogy, such as: "it’s ’91 all over again" or "I’m placing my bets for 2004 strictly using 1994’s tip sheet.";
• In summary, Mr. Cramer’s stock market calls since May 2000 have low consistency and approximately coin-flip accuracy. He seems more an entertaining (to some) stream of uncalibrated opinion than a stock market maven.

Ouch… Wouldn’t it be interesting if every show ended with "There is less than a 50% chance that anything I’ve said is accurate". Imagine if all pundits were audited in the same way. Perhaps it’s a case of pundits really depending on opacity to succeed. But then blogs come along and introduce a big dose of transparency. I just love these two quotes:

"Advice is the only commodity on the market where the supply always exceeds the demand." – Unknown

"He who lives by the crystal ball soon learns to eat ground glass." – Edgar Fiedler