Jim Cramer’s 25 Rules of Investing (Rules 21 - 25)

This is the home stretch, the final five rules of investing are here for your general consumption. If you’re interested and haven’t read reviews on Jim Cramer’s “new” book “Real Money: Sane Investing in an Insane World,” be sure to check out some of the reviews to see if this book is for you. While the past few articles and this one are summaries of these rules, the book goes into greater detail and may be worth checking out. Now… onto the final five rules:

Rule No. 22 - Wait 30 Days After Warnings
This is a good rule - wait thirty days after an announcement of bad news before you decide you want to get into a depressed stock. Cramer makes an excellent point:

When a company preannounces a bad quarter, it isn’t just looking at the past. It is looking at its order book, its future. Believe me, if there were any hope that the company wouldn’t have to preannounce — hope in the form that maybe something could get better, not worse in the next 30 days — the company would wait.

Rule No. 23 - Beware of Wall Street Hype
A Wall Street firm can prop up a weak stock, because they have a vested interest in it, far longer than people give them credit for. Watch for what’s hype and what’s true strength, otherwise you could be buying fluff.

Rule No. 24 - Explain Your Picks
You know the old adage about how if you can explain a concept, you understand it a lot better? The same goes for this rule. It also gives you confidence in your pick, if you can’t convince someone else to get it (at least convincingly enough to yourself) then why did you get in the first place?

Rule No. 25 - There’s Always a Bull Market
Something is always hot, always growing - so you just have to find it.

Enjoy and if you’ve read Jim Cramer’s book, what do you think of it?