How to Win With Jim Cramer's Stock Picks
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How to Win With Jim Cramer's Stock Picks
Introduction
Since Jim Cramer's "Mad Money" premiered on CNBC, it has heated up the network with Jim's stock pick circus brought to you straight from the heartland of "Cramerica." While many regard "Mad Money" as merely "infotainment," others are "Boo-yah" believers and guarantee that mad money can be made from Jim Cramer's stock picks. While even Jim's portfolio has some ups and downs, his strategies can be put to use for fun and profit.
Instructions
Difficulty: Moderately Challenging
Steps
1
Step One
Read Jim's books, "Real Money: Sane Investing in an Insane World" and "Mad Money, Watch TV, Get Rich." This is as important as watching his TV show or reading recaps on the Internet, since the books outline the methods to his madness. The books transcend the chair-throwing, stock-possessed madman that is his persona and reveal his market savvy.
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Step Two
Tread carefully when investing in a mad money stock pick based on a quick recommendation during "lightning round." It is much better to select Jim Cramer's picks from the calmer segments when he has devoted time to research stocks. While "lightning round" shows off his vast knowledge of stocks, it isn't the real meat of Mad Money, but rather, the seasoning.
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Step Three
Research Jim's Picks before buying. Jim Cramer himself tells viewers to do this. Don't take his word for it. Look at the companies yourself by reading their conference-call transcripts and visiting their websites.
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Step Four
Check out Jim Cramer's other shows, which reveal him at calmer moments and provide more information about how he looks at the market. "Stop Trading!" is another CNBC Jim Cramer show, as is "Wall Street Confidential" on theStreet.com.
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Step Five
Watch out for Jim's obsessions. Sometimes he just seems to love a stock (or less often, hate one) for unconvincing reasons. Perhaps he thinks a company's CEO is a great guy (he claims the show is not for making friends) or he picks a restaurant because he likes to eat there. Often these unaccountable favorite stocks don't increase in value. Don't put your money on one of Jim's favorites unless he gives you many good reasons.
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Step Six
Move fast. Jim Cramer has been called inconsistent in many of his picks, but he defends himself by saying he intends viewers to hold a lot of his stock picks for only a few days. Make sure you know how long Jim wants you to stay in a stock, and be prepared to get out fast.
Tips & Warnings
- Jim Cramer's Mad Money picks are not for the buy and hold kind of trader. He changes his position on these stocks because his show is geared more toward Joe six-pack, who just likes to watch, and, at the other extreme, toward the intense day trader.
- Don't be a lemming. Look into all of Jim Cramer's Mad Money stock picks before trading on his advice.
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