1.
Investment strategies adopted by
“Jim Cramer”

2.
Mr. Jim Cramer
James J. "Jim" Cramer (born February 10, 1955) is an American television
personality, former hedge fund manager, and best-selling author.
Cramer is the host of CNBC's Mad Money and a co-founder and chairman
of TheStreet.com
Started Investing in the market:-
Cramer started investing in the stock market during his time at law school.
Cramer began promoting his holdings by leaving stock picks on his answering
machine, impressing The New Republic owner Martin Peretz, who gave him
$500,000 to invest; Cramer earned Peretz $150,000 in two years.

3.
List of Cramer's investing rules
Rule 1 : Bulls, Bears Make Money, Pigs Get Slaughtered
Rule 2. Don't Buy All at Once
Rule 3: Buy Damaged Stocks, Not Damaged Companies
Rule 4: Do Your Stock Homework
Rule 5: Buy Best-of-Breed Companies
Rule 6: Diversify to Control Risk
Rule 7: Check Hope at the Door
Rule 8: Beware of Wall Street Hype
Rule 9: explain Your Picks

4.
List of Cramer's investing rules
Rule 10: Bad Buys Won’t Become Takeovers
Rule 11: Never subsidize losers with winners.
Rule12:Wait 30 Days After Preannouncements
Rule 13: Be Flexible
Rule 14: Be a TV Critic
Rule 15: There's Always a Bull Market
Rule 16: Giving Up on Value Is a Sin
Rule 17: It’s OK to Pay the Taxes
Rule:18 Cash is for Winners

5.
List of Cramer's investing rules
Rule 19:No Woulda, Shoulda, Couldas
Rule 20:Expect ,don’t fear Corrections
Rule21: Don't Forget Bonds
Rule 22:When the Chiefs Retreat, So Should You
Rule23:Don't Own Too Many Names
Rule 24: No One Made a Dime by Panicking
Rule 25:Defend some stock ,not all

6.
Rule 1 : Bulls, Bears Make Money, Pigs Get Slaughtered
“This is Cramer's way of saying that you need to know when to sell.”
Bulls make money: When the market goes up, people make money.
Bears make money: When the market goes down, people make money.
Pigs get slaughtered: It’s when people get greedy that they get slaughtered.
Making money is good but don’t get so greedy that you’re holding the bag when
the bubble bursts.

7.
Rule 2. Don't Buy All at Once
Cramer advocates buying your position into a stock in stages. Averaging in like
this helps you get a better price.
To maximize your profits, stage your buys, work your orders and try to get the
best price over time.
No broker likes to fool around with partial orders. No financial adviser has the
time to buy stocks methodically over time. The game is to get the trade on, at
one level, in a big way.
Make the statement buy. Get the position on the sheets or in the portfolio.

8.
Rule 3: Buy Damaged Stocks, Not Damaged Companies
This goes back to buying the company behind the stock. As long as the company
behind the stock is strong, profitable, and competitive, a damaged stock price is
the best opportunity to buy the stock at a bargain basement price.
If you buy damaged companies chances are you are going to lose money rather
than profit.
Buying damaged stocks that are not from damaged companies will possibly
make you more money because the stock price per share will most likely rise
after you buy it.
If you buy damaged stocks it is possible the stock price will not get any lower
and may rise for a period of time.

9.
Rule 4: Do Your Stock Homework
What does he mean by homework?
"Listen to the conference calls. Go to the company's Web site. Read the
research. Read the news stories. Everything's available on the Web. Everything.
Before you buy any stock, it's important to research all aspects of the company

10.
Rule 5: Buy Best-of-Breed Companies
What is BEST of BREED ?
A stock that represents the most optimal investment choice for a specific sector or industry due
to its high quality compared to its competitors. This slang is derived from dog shows, where the
highest quality dog for each breed wins an award and is given the "best of breed" title.
If you do your homework and pick stocks based on the fundamentals, you will automatically
follow this rule.
Investing in the more expensive stock is invariably worth it because you get piece of mind.

11.
Rule 6: Diversify to Control Risk
Sector diversification is important.
If all your stocks are from the same sector, there is always the danger of bad
news in the sector ruthlessly dragging down the stock price of every company in
the sector — even the good ones.
If you control the downside and diversify your holdings, the upside will take care
of itself.
It's the only investment concept that truly works for everyone. If you can mix up
enough different sectors in your portfolio, you can't be hit by one of the myriad
perfect storms that come our way far more often than you would think.

12.
Rule 7: Check Hope at the Door
Hope is emotion, pure and simple, and trading is not a game of emotion.
It is not part of the equation. Don't hold on to a battered stock in the hope that
it will bounce back even though the fundamentals say otherwise. Cut your losses
and move on.
Battered stock : Whenever a broad industry goes into the doldrums - whether
due to a decline in business prospects, economic shocks, or simply a business
cycle, most investors will try to tiptoe their way around re-investing in the now
toxic sector. It can be a very profitable venture for both speculators and value
investors, but investing in beleaguered companies should come with an adjusted
set of rules.

13.
Rule 8: Beware of Wall Street Hype
Cramer cautions against underestimating the Wall Street promotion machine.
Analysts and firms get behind stocks — sometimes irrationally, sometimes
greedily — and can keep the stocks propelled in an up direction well beyond
reason.
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.

14.
Rule 9: Explain Your Picks
You should be able to articulate your reasons for buying a stock.
Selling your idea first, preferably to someone else, can help you spot flaws in
your reasoning.
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?

15.
Rule 10: Bad Buys Won’t Become Takeovers
Cramer believes that buying that crappy stock in order to try to catch a buy-out is
a bad move because bad stocks don’t be bought out, good stocks at low prices
get bought out.
The rule is: “Never speculate on companies with bad fundamentals.”

16.
Rule 11: Never subsidize losers with winners.
You should read the explanation yourself but it’s a good thought – don’t sell a
stock that has performed well so that you can pump it into one you thought was
going to do well but instead has tanked.
Individuals do the same thing. They have only a finite amount of capital to
invest. Rather than take the medicine -- the loss -- they hold on to the losers and
sell their winners.
My advice to anyone who is stuck in this position is quite simple: Sell the
losers and wait a day. If you really want them, go buy them back the next day.

17.
Rule12:Wait 30 Days After Preannouncements
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.
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.

18.
Rule 13: Be Flexible
Recognize and be open to the unexpected shifts in the market because
business, by nature, is dynamic, not static.
Stocks don’t live in a vacuum and things change. Conditions that made your
purchase a good decision (at least in your mind) may not exist anymore, so get
out. Don’t buy and hold through turbulent times if the turbulance affects the
very reasons why you purchased the stock.

19.
Rule 14: Be a TV Critic
Don’t believe everything you hear on TV. Ha! That’s all there is to this rule…
We don’t know how much “value” is in it since we probably shouldn’t believe
everything you hear from anyone without doing your own research.

20.
Rule 15: There's Always a Bull Market
Something is always hot, always growing – so you just have to find it.

21.
Rule 16: Giving Up on Value Is a Sin
Buying low, selling high – and wait after you do buy low.
cramer details some examples of stocks at 52-week lows with tremendous value
but no buyers. The reason, he claims, is because investors aren’t patient enough
to buy into these “lows” and wait for the highs to rematerialize.

22.
Rule 17: It’s OK to Pay the Taxes
This is a great, short post, about how you shouldn’t hold onto a stock just
because you don’t want to pay short term capital gains. Some stocks are meant
to be held short term and you buy them on that notion. “… no taxes are due
when you sell at a loss.”

23.
Rule:18 Cash is for Winners
Don’t be afraid to pull out of stock and just leaving it in cash.
Jim Cramer cites the reason for this aversion started when Fidelity Magellan
underperformed (ten years ago) because it held too much cash and the manager
was canned.
Apparently, picking bad stocks can’t get you fired but not picking at all sure can.
Another nugget in here that you might not pick up on is a corollary to this rule
which is: Don’t be afraid of not getting enough exposure (ie. money in the
market).
As Warren Buffett once said, you only need a few good decisions in your
investing lifetime to become very rich. You can afford to let some of them pass
you by.

24.
Rule 19:No Woulda, Shoulda, Couldas : This damaging emotion is destructive to
the positive mindset needed to make investment decisions.
Rule 20:Expect ,don’t fear Corrections: It is not always clear when a correction
will strike, so expect and be prepared for one at all times
Rule21: Don't Forget Bonds: It's important to watch more than stocks, and
bonds are stocks' direct competition
Rule 22:When the Chiefs Retreat, So Should You: High-level executives don't
quit a company for personal reasons, so that is a sign something is wrong.
Rule23:Don't Own Too Many Names: It can be constraining, but it's better to
have a few positions you know well.
Rule 24: No One Made a Dime by Panicking: There will always be a better time
to leave the table, so it is best to avoid the fleeing masses
Rule 25 : Defend some stock, Not all

25.
Bibliography
Books:
“confession of a street addict” written by Jim Cramer
Jim Cramer's Stay Mad for Life written by Jim crramer
Internet:
http://www.thestreet.com/static/25-rules.html
www.investopedia.com/
http://www.thestreet.com/files/m/white-paper/sb-72/prrg-0014_white_paper.pdf