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Sun 8 Jul 2007

Jim Cramer’s 25 Rules of Investing

Posted by Stephen under Stock Market
No Comments

Understand these, then you understand his book:

Jim Cramer’s Mad Money
Watch TV, Get Rich

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 pre-announcements
23. Beware of Wall Street hype.
24. Explain your picks.
25. There’s always a bull market.

The Jim Cramer’s Mad Money: Watch TV, Get Rich

The Jim Cramer’s Real Money: Sane Investing in an Insane World

I suggested the following stocks:

AAPL
BA
BKC
CBI
GOOG
GRMN
HOV
HSOA
LUV
MA
TSM
XOM

Sun 8 Jul 2007

Jim Cramer’s Mad Money Stock Worksheet

Posted by Stephen under Stock Market
No Comments

I think his show is interesting and also his book. This is the homework that he asked us to do in his book:

Jim Cramer’s Mad Money
Watch TV, Get Rich

Find out how the company makes its money.
1. How did it make its money last year?
2. How did it make money last quarter?
3. Are these high- or low-quality earnings?
What sector does the company belong to, and how has that sector performed?
1. Sector:
2. Sector performance over the last three months:
3. Sector performance over the last six months:
4. Sector performance over the last twelve months:
5. What forces tend to move the stocks in this sector?
How has the stock performed?
1. Last year:
2. Last six months:
3. Last three months:
4. Last month:
5. Last week:
What do the comparisons tell you?
1. Does this company face any threatening competition?
2. What is the P/E of this stock?
3. What is the average P/E of its competitors?
4. What is the PEG rate of this stock?
5. What is the average PEG of its competitors?
6. How much cheaper or more expensive is this stock compared to its peers?
  - Based on P/E:
  - Based on PEG:
Can the stock survive its balance sheet?
1. How much debt does this company have?
2. How much debt does it have due this year?
3. How much free cash flow did the company have last year?
4. How much free cash flow should it have this year according to analyst estimates?
5. Will this company generate enough cash flow to pay its debts this year?
6. Can it pay its debts next year?
7. Will it have to sell assets to pay its debts in near future?
In light of your homework, does this stock look like a good investment?