Stock Smackdown: Cramer vs. CAPS

There's no denying that Mad Money host Jim Cramer is entertaining, popular, and passionate. On many occasions, he's even right. So, he's smart, funny, and the closest thing to a stock market rock star -- but is he smarter than you?

Cramming for Cramer
The Fool's free investing community, Motley Fool CAPS, aggregates the opinions of more than 125,000 members to assign ratings for each stock's likelihood of outperforming or underperforming the market.

Below, we look at some top stocks that Cramer picked and panned during last week's "lightning rounds" and compare that to how the CAPS community sees their future.

Source: Mad Money and CAPS.

Cramer says
Even if the change in direction gives you whiplash, the Mad Money star admits that his prior call to buy DryShips hasn't been working out. It was only last month that Cramer extended his bullish feelings toward the dry bulk shipper, tapping it as one of the only shippers besides Nordic American Tanker that he liked. Yet DryShips was forced to get a waiver on $650 million of a line of credit used to purchase Ocean Rig last summer and then offloaded a ship at a 43% discount as it was desperate to raise cash.

Apparently even Cramer realizes now that the shipping industry is in a much tougher position than he previously thought and recommends that you "don't be fooled" like he was. He recommends selling any shares you may hold:

Don’t like it… don’t like it… obviously balanced sheet hobbled… really think that it is not doing well… remember, I turned on this ship business… it is not working… even though the Baltic Freight Index is good… do you know what I am even worried about… as I said last night… I am worried about Nordic American Tanker … since the price of oil… I am not a buyer of Dry Ships… I do find it amazing that every morning when I come in… it is the most actively traded stock on our ticker… don’t be fooled… do some selling.

CAPS says
It was smart for DryShips to take the actions that it did to protect its financial situation. A fleet of dry bulk shippers filed for bankruptcy protection in recent months as the markets have deteriorated, raising concerns over the risk to DryShips, Genco Shipping & Trading (NYSE:GNK), and Navios Maritime (NYSE:NM), who all had ships chartered to firms now in bankruptcy. Yet top-rated CAPS All-Star TMFEldrehad recently reiterated his seemingly prescient blog call from back in October 2007 wherein he anticipated an implosion at DryShips because of its willingness to take on debt:

Dry Ships is, in my mind, a lot like a pyramid scheme.  Aggressively buying more and more ships utilizing debt, debt, and more debt works great so long as the presumption that day rates will keep rising holds true.  But just like the more traditional pyramid scheme which collapses once it runs out of new participants, Dry Ships too is headed for a precipitous fall should day rates ever turn south -- and the longer Dry Ships keeps on aggressively pursuing this strategy, the more inevitable the eventual implosion becomes.

Your say
While CAPS members may stand with Jim Cramer or on opposite sides of the field, the investor-intelligence community is more than what some All-Stars think, even if they are TV personalities. But what do you think? Is Cramer right or off his rocker? Why not head off right now to CAPS and sound off with your thoughts on DryShips or any other stock.

Motley Fool CAPS is a great place to start your own research on these stocks. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Best of all, it's free!