GO
Loading...

Cramer revisits Danny Meyer's hospitality index

You can't put a price on hospitality. Or can you?

It's an idea that Jim Cramer first broached in February 2009, during an interview with famed restaurateur Danny Meyer, CEO of Union Square Hospitality Group, and returned to on Wednesday in a subsequent conversation.

Both then and now, Meyer explained to Cramer that he believes the success of any company lies, in large part, with hospitality.

Burke / Triolo Productions | Stockbyte | Getty Images

And he feels that well-treated employees of companies that connect with their customers and make them feel comfortable will do better than those that don't.

The idea has resonated with the "Mad Money" host for quite some time; it ultimately sparked something Cramer calls the "Danny Meyer Index."

It's an index made up of more than a dozen companies, selected by Meyer, all of which understand and leverage the concept of hospitality to its fullest.

The index currently contains: Chipotle, Whole Foods, Apple, Amazon, American Express, Nordstrom, eBay, Men's Wearhouse, Southwest Airlines, Mattel, Google, Bed Bath & Beyond, Costco, Brown-Forman, Goldman Sachs, and Salesforce.com.

"Looking at the performance of the companies in the Danny Meyer Hospitality Index, it looks like Danny Meyer was dead right," Cramer said. "Since its creation in February 2009, the index has generated a 375% gain, crushing the S&P 500, which is up 128% over the same period."

-----------------------------------------------
Mad Money with Jim Cramer
Cramer: Signs suggest market vulnerable
Hated stocks getting some love, again
Do you fear stocks in bubble?
-----------------------------------------------

Cramer thinks there's a good lesson for investors, here. Although hospitality may seem like an intangible concept, its application can generate some very tangible results.

Therefore, it must be weighed as a powerful catalyst, as investors attempt to determine which companies are likely to outperform rivals, and which stocks are worthy of those investment dollars.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

Symbol
Price
 
Change
%Change
CMG
---

Contact Mad Money

  • Showtimes

    U.S.
    Monday - Friday 6p ET
    Australia
    Saturday 8a, 1p, 7p SYD
    Sunday 12a, 1a, 8a, 7p SYD
    New Zealand
    Saturday 10a, 3p, 9p NZ
    Sunday 2a, 3a, 10a, 9p NZ
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.