There was a 50, watt AM station WOAI being broadcast out of San Antonio that was somehow able to get coverage all the way to me, some 80 miles away. As I drove around town I would listen intently as Jim would invite me and my leaky Ford escort to join him in a piece of the action. He was exciting, motivating, and usually right. Cramer was my first real glimpse into the finance world, and I started listening to Jim Cramer about a decade ago when I was still living in South-East Austin.
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Financial guru Jim Cramer shows how ordinary investors can prosper, no matter the climate on Wall Street. How do we find hot stocks without getting burned? How do we fatten our portfolios and stay financially healthy? For starters, Cramer recommends devoting a portion of your assets to speculation. Everyone wants to find the big winners that can bring outsized gains, and Cramer explains how to allocate your portfolio so that you can afford to take this kind of risk wisely.
Cramer shows how to compare stock prices in a way that you can understand, how to spot market tops and bottoms, how to know when to sell, how to rotate among cyclical stocks to catch the big moves, and much more. I keep these talismans with me wherever I go, because they remind me why I got into stocks and why I had to stay in stocks no matter what, because the opportunities are too great not to be in them.
You have to invest to make that happen. If you invest well you should almost always be beating the return you get on your day job. The last number has a big black minus sign right after it. At that moment, everyone—my investors, my employees, the press, the public—everyone had written me off, except for my wife, whom I had worked with for so many years and who knew never to count me out.
Not two months before I had been on the cover of Money magazine as the greatest trader of the era. Now I was wondering whether I could survive the year. Using the very same techniques and tactics I will describe here, I methodically made back all of the money I had lost to date that year, and by December I had returned to a slim profit for the year.
That snapshot of how close I came to failure reminds me how important it is to stay investing and trading stocks no matter what because they are just too lucrative to stay away from for any long period of time. It also serves to remind me of how humbling this business is and how important it is to adjust course, for I had been sloppy and blind to a changing market during that catastrophic year. Had I not been flexible and willing to change strategies, I would never have come back.
The fact that almost every mutual fund lost money in my biggest year is not a statement about my stock-picking prowess but evidence that if you are disciplined, use common sense, and take advantage of all the devices and tools out there, you can profit no matter what.
But you have to stay in that game to find that bull market. It keeps you from picking stocks that can wipe you out. It keeps you from speculating on situations that are worthless. It keeps you from borrowing a lot of money, known as margining, and hoping that stocks will make a magical move upward. It keeps you from wallowing in worthless penny stocks.
It keeps you from trying to make a killing in tech. Staying in the game is the ultimate lesson. How do I know this? Because it is what I have done. Staying in the game makes sense rationally and empirically because, over the long term, we know stocks outperform all asset classes. They get bored, tired, frustrated, defeated, or reckless. They get discouraged. They get beaten by the unnerving and jarring and humbling process not of investing but investing successfully.
My methods are designed to keep you from getting discouraged and quitting. And I have failed. But before I take too much credit for the system and methodology I used to keep me making money, I have to give credit where it is due, to my wife, Karen, the woman the Street called the Trading Goddess for her manner and her proficiency in managing money and barking orders to dozens of brokers and traders.
Karen was a professional institutional trader before I met her. She was responsible for taking me to the next level. She again drilled them into my head, so they now tumble out here almost by rote.
Jim Cramer's Real Money: Sane Investing in an Insane World
Jim Cramer's Real Money : Sane Investing in an Insane World by James J. Cramer (2009, Paperback)