Well, the index is down 35% since Jan. 21, the day it was created. The S&P 500 over that same period has declined just 8%. So Obama, at least according to Cramer’s portfolio, isn’t doing too well.
There’s another index doing much better, though. Danny Meyer, restaurateur and author of Setting the Table: The Transforming Power of Hospitality in Business, pulled together a group of stocks based on how well the companies treated their customers. His theory says that during this recession companies who offer better service, even if it costs more, will outperform those who don’t. The resultant customer goodwill and brand loyalty will be worth the expense.
Meyer’s index consisted of 17 stocks; Amazon.com, eBay, Costco, Goldman Sachs, Apple, Google, Whole Foods, Southwest Airlines, Mattel, Build-A-Bear, Men’s Wearhouse, Timberland, Nordstrom, Beth, Bath & Beyond, American Express, Brown-Forman and Chipotle.
The Meyer Hospitality Index lagged the S&P by six points in 2008’s fourth quarter, but since his Feb. 2 appearance on Mad Money, the index has held steady. The S&P, on the other hand, lost almost 7%. That’s a good-sized margin considering the recession we’re in.
One point worth noting: Not every stock in Meyer’s index has outperformed as a result of superior customer service. Sure, Whole Foods and Chipotle have been standouts, but American Express is in trouble. AXP’s credit woes are the main reason the stock’s down 24% since Feb. 2.
Cramer’s advice for Obama? Look east. China is on the rebound thanks to the drastic yet decisive measures that country took to turn its economy around. The U.S. should do the same.
Cramer's charitable trust owns General Electric and JPMorgan Chase.
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