The Cramer Effect Explained

JIM CRAMER’S “MAD MONEY” on CNBC is watched by approximately a quarter of a million people each night.  

It’s been established that on average there is a “Cramer Effect” or “Cramer Bounce” of 3% in the trading day following his recommendation.  However, until now this has simply existed as an observation.  Why exactly does the Cramer Effect occur?  Click for an expanded analysis of the Cramer Effect.

Stashed Stimulus

In 2020, less than 15% of recipients spent the entirety of their stimulus checks. Why is this, and how does it affect the economy? How can the Biden Administration increase stimulus spending using behavioral economics? President Biden should read up on the house money effect and social proof persuasion.

If the Biden Administration continues to ignore the behavioral factors of stimulus spending, the economy will miss out.

Social Proof Persuasion and /r/WallStreetBets

In early 2021, /r/wallstreetbets (WSB) broke into the media cycle as they pumped up GameStop shares. The reddit forum operates based off of social proof persuasion in the form of upvotes. Seeing as WSB is only successful as a group operation, the more mentions of a stock play, the more likely the move is to be a success. To gain an edge, I coded a web scraper and NLP program for the subreddit that logs the amount of references to each stock as well as the sentiment on the subreddit. Click for more information.