Mad Money: Don't Do It

"Does Mad Money make the market go mad?"

John Neumann & Peppi Kenny, The Quarterly Review of Economics and Finance, December 2007, Pages 602-615

Abstract:
Empirical studies of numerous popular investment advisory services find
statistically significant abnormal returns at the time of their broadcast or
published investment recommendations. Our analysis of returns and trading
volume around stock recommendations aired on charismatic host Jim Cramer's
Mad Money program reveals statistical evidence of response to both his buy
and sell opinions, with most of the full-day return following an on-air buy
recommendation captured by that day's opening price. Trading strategy
analysis suggests that individuals with limited funds should be wary of
short-term trading to exploit the show's suggestions, while professional
investors may be able to exploit buy picks with a contra strategy.

Why do people watch this show? More importantly, why would they expect to be able to make money by acting on Jim's advice?

Now, sure, if I could get the names of the companies Jim is going to hawk, the morning BEFORE he hawks them, that would be useful. In fact, KPC volunteers to provide that public service: Jim Cramer, email us before you go on the air, and we will post your "buy" and "sell" recommendations. After we drop a dime to the ol' broker.