Jim Cramer's Real Money
How do you find hot stocks without getting burn?
How do you make your money work for you?
Former hedge-fund manager, cofounder of TheStreet.com, the daily financial news Web site, and cohost of CNBC's Kudlow & Cramer,and seasoned Wall Street commentator, Jim Cramer shows how to invest wisely in today's insane world.
For newbies, Crammer recommends allocating a portion of your assets
to speculation. He tells why "buy and hold" is a lousy and losing philosphy:
For Cramer, it's "buy and homework". Thus, Cramer's approach requires
devoting at least an hour a week to educating yourself about each
stock you own.
Cramer explains the fundamentals of his investment approach, based on the twin principles
of diversification and speculation: while most of your portfolio should include blue-chip
companies, 20% percent of your money should go for a slightly riskier bet on a company's future
("owning a stock is a bet on the future, not the past").
Cramer's 25 rules for investing are explained in this book. The rules are sound and very helpful for the investor to review. They are:
1. Bulls, bears make money, pigs get slaughtered.
2. It's OK to pay the taxes.
3. Don't buy all at once.
4. Buy damaged stocks, not damaged companies.
5. Diversify to control risk
6. Do your stock homework.
7. No one made a dime by panicking.
8. Buy best-of-breed companies.
9. Defend some stocks, not all.
10. Bad buys won't become takeovers.
11. Don't own too many names.
12. Cash is for winners.
13. No woulda, shoulda couldas.
14. Expect, don't fear corrections.
15. Don't forget bonds.
16. Never subsidize losers with winners.
17. Check hope at the door.
18. Be flexible.
19. When the chiefs retreat, so should you.
20. Giving up on value is a sin.
21. Be a TV critic.
22. Wait 30 days after preannouncements
23. Beware of Wall Street hype.
24. Explain your picks.
25. There's always a bull market.
Hardcover: 320 pages
Publisher: Simon & Schuster (March 29, 2005)