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

ISBN: 0743224892
ISBN 13: 9780743224895
By: James J. Cramer

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About this book

How do we find hot stocks without getting burned? How do we fatten our portfolios and stay financially healthy? Former hedge-fund manager and longtime Wall Street commentator Jim Cramer explains how to invest wisely in chaotic times, and he does so in plain English in a style that is as much fun as investing is -- or should be, when it's done right.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. He explains why "buy and hold" is a losing philosophy: For Cramer, it's "buy and homework." If you can't spend an hour a week researching each of your stocks, then you should hand off your portfolio to a mutual fund -- and Cramer identifies the very few mutual funds that he'd recommend.Cramer reveals his Ten Commandments of Trading (Commandment #5: Tips are for waiters). He explains why he's not afraid to compare investing to gambling (and tells you which book on gambling you should read to become a better investor). He discloses his Twenty-Five Rules of Investing (Rule #4: Look for broken stocks, not broken companies).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. "Jim Cramer's Real Money" is filled with insider advice that really works, information that Cramer himself used to make millions during his fourteen-year career on Wall Street.Written in Cramer's distinctive turbocharged style, this is every investor's guide to what you really must know to make big money in the stock market.

Reader's Thoughts

Chad Ingram

This is a great book for anyone looking to understand the stock market and your 401K situation at work. I wouldn't buy everything Cramer says in this book, but I learned a lot of ideas I can use for my own life.


Read this book first. Jim Cramer is my hero. In today's information age, Jim is the voice of reason and experience. He provides the average person the means to succeed on Wall Street. If you are thinking about investing, then read this book and then read it again. This book discusses general investing.

C.J. Cato

I started listening to Jim Cramer about a decade ago when I was still living in South-East Austin. There was a 50,000 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 1989 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 ten years later I still listen to him with just as much interest, (no pun intended). I can't help but think that in some small way, the years of enthusiasm Cramer has given me in regards to the market is most likely one of the reasons I will begin work on a Master's degree in Finance this coming year.. After many moons of listening to Jim on the radio and then his television show, "Mad Money" over on MSNBC, I decided to take the time to read one of his books. He's written several, but I chose, "Real Money - sane investing in an insane world." I wanted to read this introductory book on the stock market because I had questions; questions so embarrassingly simple that only a conversation between me and Jim's silent text could provide the privacy I needed while overcoming the learning curve. Jim came through for me big time. I was baffled before I had bought the book as to why if you buy a stock from a company, and the company won't buy it back nor pay you dividends, that it is worth anything at all... I was baffled as to what use the P/E ratio was to me, or why do some investors tell you to keep your money in the market even when everything is falling. The answer to those and dozens of other obtuse and seemingly simple questions are cleverly sorted out in Jim's book. Because of that, this is a must read for any novice or intermediate investor.Cramer's Twenty-five Rules for Investing1. 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 preannouncements 23. Beware of Wall Street hype. 24. Explain your picks. 25. There's always a bull market.


When I first caught this guy on CNBC (while at work), I couldn't believe that a major network was giving this blow-hard that much air time. Eventually, I started to warm to his sheer obstreperousness, and when he was the only guy in the media last autumn to call it like it was and note that the Fed was about to dilly-dally its way into allowing a wholesale collapse of the global financial markets, I began to sit up and take notice.I've since come to the conclusion that Cramer is one of the smarter investment guys out there. There are several ways to skin a cat, and while a lot of folks try to find an investment trend and ride it for all its worth (the trend is your friend, the saying goes), I've always favored Mencken's philosophy that no one has ever gone broke underestimating the intelligence of the American public, that American capitalism is built on a false confidence in an indivdual's ability at any given time to know what the hell is going on, and that the best way to make money is to wait for fear to overpower greed in the market.... it is at these moments when you can either short the market or wait for things to get cheap enough to find some great buying opportunities. Well, that's not exactly Cramer's philosophy, but he does start with a basic premise that is spot on, namely that you make money either buying good companies during the times when the market lets them get too cheap, or you ride the waves of irrational exuberance higher, knowing that's it's all B.S. and that the the market will signal when to get out ahead of all the suckers. I like the information in this book. As a futures trader, I don't know much about stocks, but this book has given me a host of practical strategies that make sense and that don't dwell in the pie-eyed fantasy world of most financial analysts, who are far too complacent in the moral and practical superiority of their free market abstractions.


This had more depth than I expected from what I've seen on TV. Jim Cramer delivers thoughtful ideas about trading in an entertaining format. If at times sensational, it's all derived from an authentic energy. Cramer challenges some fundamental concepts, such as the dichotomy between investing and trading, while soundly backing others, such as the importance of diversification and risk management. I've read enough in this genre to start rating books by whether they offer something new. This one certainly does.

Paul Tennant

its a must read really. despite his antics on the cnbc show mad money, the book is absolutely great. i read it in collage and it sprung about an appetite for knowledge like a son of a gun. it goes in to the market cycles, talks about the actual costs of a stock with pe and peg ratios. He writes in a most engaging way talking about the bulls and the bears. Youll learn a lot while being entertained.

Matthew Kowalski

This book is about the rules that governs cramers trading.about his rules that have helped him win in good and bad markets.he wants you to win and he wants you to know the games that others are playing with you.so further lets get to the body of the work that cramer has laid out for individuals with investment on the mind.His chapter listing is as suchStaying in the gameGetting started the right wayHow stocks are meant to be tradedSome investing basicsSpotting moves before they happenStock picking rules to live byCreating your discretionary portfolioSpotting bottoms in stocksSpotting TopsAdvanced Strategies for speculatorsEpilogue IndexStaying in the gameis the essence of investing of not quitting when the going is rough and to continue doing homework even when the tides seems as though it is against you.the fact of tides is that they recede as they also come.It talks about intelligent investing and that no investor has infinite bullets to get it right so you have to be making good calls to stay in the game.Stay tough so that you can get past the really bad years because the stock market is cyclical.Getting started the right wayThis chapter is very important it talks about cramers interest in speculation as well as the fact that he decries the buy and hold mentality. At some point you have to sell and no one is going to tell you when that time is so you have to figure it out for yourself. So this chapter takes you on a tour of thinking of thinking about the angles and playing them because you must.He warns of penny stocks and shell companies and how you have to be on your guard so you are not taken by these companies so that you do not loose all that you have worked so hard for. This chapter talks about paychecks and how they almost never have enough left over to do any thing that really matters with. Thats part of the reason why I want to invest I want to be able to carry out the things that I have been thinking of so long with the environment of my creation. Rules that beyer created that cramer thought was important 1 If you only learn from mistakes you will not repeat them 2 Only go to the tracks where there aren't lots of good players so you can clean up 3 Only bet on situations where you have total convictionIt takes homework to be a trader.This chapter also discusses some of the things that happen when you are going to have an ipo.How stocks are meant to be tradedMultiple * Price = EarningsPrice / Earnings = MultipleLimits allow you to set prices without having to pay unless the trade is executed.Multiples are often set improperly for small lesser known companies. When the economy turns down debt can be a real killer.Some investing basicsThis chapter discusses the idea of where your portfolio may want to be depending on risk and age. Although he certainly says that even early on some of your cash should go to retirement investments. Speculation is part of the key to his achievements. As time goes on you have to shift your focus so that you can live well as time passes. Separate your speculative pool from your retirement pool. Diversification is the only free lunch on wall street. At least five stock for diversification and one hour per week with those stocks for homework. Make sure you are investing in viable companies before you measure growth. Long term growth to determine purchases vs dollar amounts.Shared ideascramer and buffett both follow the paperbuffett cramer and soros look for their inadequacies and change in situationsbuffet and cramer believe in homework and keeping up with whats going on.buffett and cramer, soros lived through some tricky deals and still have done well.Spotting moves before they happenThis chapter talked about the specifics of a one point move and its exactly what you think its a large purchase by large brokerages or other people with large amounts of assets buying a large amount of assets. Market dislocation and fully valued sectors. Looking for big moves when you are looking for these moves you are focusing on the paper and the paranoia of the people. The psychology and the psychology of fear and the game that is generated by the psychological factors that make people make bad decisions because they are not keeping it together under stress and duress.Different techniques and rules cramer uses for each cohort and discuss. Rotational catalysts shift group to group depending on macro backdrop. estimate revision catalystssecrets of large cap investing.24 percent year no down years because he figured out the markets and which companies where going to beat expectations.what happens when the fed changes things how it squeezes and expands cash flow. Cyclical buy and sell chart on pg 115.the value of cash in some markets.the importance of the fed.sell in time.valuing companies40% management30% fundamentals15% technical analysis15% alpha factorStock picking rules to live byTacticswealthy money is impatient.rules of the trade never turn a trade into an investment your first loss is your best loss its okay to take a loss when you already have one never turn a trading gain into an investment loss tips are for waiters you don't have to profit to sell control losses winners take care of themselves don't fear missing anything don't trade headlines don't trade flowtwenty five investment rules to live by bulls and bears make money pigs get slaughtered its okay to pay taxes don't buy all at once arrogance is a sin look for broken stocks not broken companies diversification is the only free lunch buy and homework not buy and hold no one ever made a dime by panicking own the best of the breed its worth it he who defends everything defends nothing or why discipline trumps conviction the fundamentals must be good in a takeover don't own too many stocks cash and sitting on the sidelines are fine alternatives no woulda shoulda coulda expect corrections don't be afraid of them don't forget bonds never subsidize losers with winners hope is not part of the equation be flexible when high level people quit a company something is wrong patience is a virtue giving up is a sin just because someone says it on tv doesn't make it so always wait thirty days after earnings preannouncement before you buy never underestimate the wall street promotion machine be able to explain your stock picks to someone else there is always a bull market somewhereCreating your discretionary portfolio you will do time consuming sometimes tedious homework spend an hour per position per week doing research you must be interested in business you must have someone to talk to about the idea cramer can't encourage you to quit you have to endureSpotting bottoms in stocksLook for balance sheets that are out of whack vs long term fundamentals. first thing he gauges is market sentiment. capitulation crescendo bottom sell offs the only people left are the people not moving. catalyst.find the bottoms and buy and sell some on the way up.Spotting TopsLook for tops and sell before tops so that you don't kill your market appreciation. Competition caps companies as well as taking from them if a move happens in the other players zone. When ever management is vague it is a top because management wants to show off good results. Over expansion a company cannot handle its growth this causes a top. Government blindside, this happens when the gov changes rules and you get unexpected consequences. When retail cannot expand any more it hits a top. Fad stock tops occur when the fad is depleted of its energy and it's not going to go anywhere from there. Accounting mayhem things with the books seem cooked you have to get out. The grilled egg top you have to leave because its to hot and being in to long with force loss. Advanced Strategies for speculatorsThe arithmetic of buying callscall optionprice = purchaseprice * 100 * optionshortsBooks that Cramer recommendsReminiscences of a stock operator by Jesse Livermore - psuedonym Ed LefevrePicking winners by Andy Beyer


Cramer is sometimes embarrassing on his show but he is not without knowledge and ideas. The book is accessible and has good contents. I don't agree with his emphasis on timing the market by investing in cyclical businesses. I recommend as a first book on investing: The Warren Buffett Way.

David J. Andrews

The man is crazy but his book is an easy to read introduction to the stock market and to investing. A lot of people have made a lot of money by following the simple common sense advice in this book. I'm one of them.

Rajual T.

I am not the biggest fan of Jim Cramer, I find that more often than not his "picks" are incorrect, but every once-in-a-while, even a blind squirrel finds a nut. I think at this point Cramer has published one too many books that are beginning to repeat others. However, I do find his books to be more useful than his television show, and I think he does a good job at explaining in detail fundamental investing information very effectively. My problem with the book is that I feel it leaves the reader hanging. There are too many occasions where it seems like a cliff hanger, a good chapter than leaves me with questions, perhaps waiting for the next book. Of Cramer's work, I don't think this is best. Try the book below for a better read:Confessions of a Street AddictConfessions of a Street Addict


great introduction to investing, but read a lot more before jumping right in because not everything is as wonderful as he makes it sound. For example, he talks about the stock market being up over the past 30 years, and therefore it will be up over the next 30 years, but the stock market has been down the past 11 years so... learn some terms, get excited, try it out, but this is a crash course.


This is not a book that I could read "cover to cover" - I stopped somewhere in the middle and plan to pick it up again later. There are chapters, but the whole book seemed to be one continuous stream of thought, so even though I didn't get to the end I feel like I have "read" the book. I thought it had great advice that I could actually understand, and Cramer was witty enough to keep my attention. This is the first book on investing that I was able to actually read, comprehend, and not fall asleep. So for that, it gets three stars!!!


Learned a bunch...but the last chapter seemed really important (options) but was a bit rushed and sort of added as an after-thought. I guess I can always read an options book down the road... Looking forward to reading a bit more (Jesse Livermore) and getting in the middle of it all!!


Yes, Jim Cramer is an egotistical, obnoxious blowhard, but that doesn't mean he's an idiot. He knows his business, and if you can get around his clown-like antics, you may learn a thing or two about investing.

Thomas Janeway

Jim grows on you like moss on the dark side of bark. At first blush, he's loud, morning zoo zany and LOUD. Beyond the noise, reading his books are totally sane. The knowledge is possess is vast and brilliant. Don't underestimate his nuggets. Every investor's portfolio ought to include this book. Skip universities. This book delves into the hard knocks of street smarts. Become a disciple of this guru and you will become richer for it.

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