Should today’s indi­vidual investor heed the advice of finan­cial blog­gers or tele­vi­sion per­son­al­i­ties? And, what impact do the rec­om­men­da­tions of such per­sons have on the stock market?

To help answer these ques­tions, two North­eastern Uni­ver­sity pro­fes­sors recently com­pleted a study on the invest­ment advice of Jim Cramer, host of one of CNBC’s most-​​watched pro­grams, “Mad Money.” The results show that if Cramer were to take his own advice—buying and selling as he rec­om­mends to his audi­ence, he wouldn’t fare too poorly. But he wouldn’t become rich, either.

Paul J. Bol­ster and Emery A. Trahan, pro­fes­sors of finance at Northeastern’s Col­lege of Busi­ness Admin­is­tra­tion, exam­ined Cramer’s picks over a two-​​and-​​one-​​half year period between July 2005 and December 2007. They devel­oped and fol­lowed a hypo­thet­ical stock port­folio based on 1,344 “buy” and 435 “sell” rec­om­men­da­tions Cramer made to his viewers.

The hypo­thet­ical port­folio returned 31.75 per­cent, or close to 12.1 per­cent annu­ally, beating Stan­dard & Poor’s 500-​​stock index (18.7 per­cent, or 7.35 per­cent annu­ally during the same period). How­ever, the researchers explain, when fac­tors such as invest­ment risk are taken into account, the Cramer port­folio per­formed slightly less well than the market in 2006, and slightly better in 2007.

In addi­tion, the data showed that Cramer’s stock rec­om­men­da­tions clearly influ­ence share prices. On average, if he said “buy,” the value of that stock went up by 2 per­cent on the fol­lowing day. If he said “sell,” the price fell by 0.7 per­cent. The pos­i­tive bump for “buys” tended to reverse over the next 30 days, but the “sells” con­tinued to decline during the same time frame.

Based on his large and loyal view­er­ship, Jim Cramer is cer­tainly enter­taining and mes­mer­izing to his viewers,” said Bol­ster and Trahan in their report. How­ever, “the results pro­vide little com­pelling infor­ma­tion that Cramer’s rec­om­men­da­tions are extra­or­di­narily good or unusu­ally bad.”

The results of the study were pub­lished in The Finan­cial Ser­vices Review.