Cramer: Don’t Fall for Whale Watching ‘Nonsense’!

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If you're one of those investors who likes to parse through 13F filings to see how billionaires are investing their money, Jim Cramer thinks you're largely wasting your time.

Every quarter big investors, sometimes called Wall Street whales with $100 million under management, are required to release information about their holdings in accordance with SEC regulations.

This form must be filed within 45 days of the end of each quarter.

As soon as the information become public, immediately, Wall Street pores over the information – the Street notes who established new positions and in which stocks. And the Street notes who pared positions or sold out of positions all together.

Oftentimes, pros believe the information is prescient – that is, they believe these so-called smart money investors are establishing positions ahead of forthcoming trends.

In recent years, interest in these forms has grown intense with the 45 day period following the end of each quarter affectionately called 'Whale Watching' season.

Although the information may be valuable for pros, if you're an individual investor Jim Cramer thinks you're out of your mind to form opinions based on this information.

"The obsession with this stuff is nonsense," Cramer said.

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The Mad Money host just can't understand why competent investors would make decisions based on 13F filings rather than solid long-term research such as earnings releases, Street analysis and news stories.

In addition, Cramer thinks individual investors can easily misunderstand these filings.

First and foremost they're backward looking; they reflect the stocks that these billionaires thought were relevant at the end of last quarter. But that might not be the case anymore. They may not even hold them in the current quarter.

And perhaps, worst of all, there is no explanation for the reasons behind the buying or selling in the filing.

The explanations you may hear on television or read on the Internet are largely speculative. "That makes the stuff totally misleading," Cramer said.

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Of course every rule has an exception and Cramer conceded that looking at the 13F from someone like Warren Buffett has value because Buffett is a long-term investor. But largely he's adamant that the 13Fs from hedge fund managers, activist shareholders and aggressive Wall Street types just aren't relevant for most people.

"I want to help people not confuse them," Cramer said. And if you're an individual investor, Cramer believes 13F filings are likely to be more confusing than anything else.

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