Cramer Remix: My advice to investors
Editor's note: This show is in memory of Jim Cramer's father, Ken Cramer 1922-2014.
Jim Cramer loves stocks. He absolutely loves them. And he has for a very long time.
"My love of stocks didn't begin in law school or college or even high school," explained the "Mad Money" host. "No, my love for stocks started back in fourth grade, that's right, fourth grade."
As a child Cramer took pleasure in playing stock market games. His father's company was the National Gift Wrap and Box Company that represented 3M, and they sold games designed to gain the interest of young investors.
"I loved those games so much," he said. They clearly helped spark the beginnings of what would become a celebrated career. "I have subsequently asked the CEO of 3M (MMM) to bring the games back," Cramer admitted.
Cramer's point here is that parents shouldn't worry that kids are too young to learn about the stock market. As far as Cramer is concerned, it's never too early to get kids interested.
In fact, he thinks they may absolutely love it. Especially if it's introduced not as something serious, but rather as a game.
"Simply pick companies that are familiar to your kids and have them track them and guess which will do best over a period of time," said Cramer. "If your kids have an aptitude for investing, they will naturally find the contests fun. And they may stick with it for life."
Read More Cramer's first fling with stocks
Another lesson that Cramer has passed along to his fans, is to save. Whatever you can-whenever you can. But always save.
It may sound simple, but the "Mad Money" host thinks too few people really understand the concept.
Quite simply, a good investor always saves-period.
"That's something my father ingrained in me," said Cramer. "On the advice of my father I opened an account at Fidelity (FIS) with the Magellan fund and would contribute a little every week," said Cramer.
Read More Living in his car, Cramer developed investment strategy
Looking back at the milestones in his life, Cramer thinks he may have discovered a secret to stock picking. It's not often discussed but it should be.
And that is, when picking stocks, you may do best to pick a company that's involved in something you already know.
It's a lesson the "Mad Money" host learned the hard way.
"The best investment ideas come from what you know melded with information gleaned from public sources," Cramer said.
Read More Cramer stock picking secret, revealed!
Trading versus investing. Those terms are kicked around on Wall Street (^GSPC) all the time, and if you're new to the market you may think they are interchangeable.
They are not.
Typically trading means moving in and out of positions over a short period of time, sometimes in the same day. An example would be betting on a stock's move immediately after earnings are reported. That's a trade.
Investing involves longer time horizons, as much as a year or more, and it typically involves themes that have breadth such as the renaissance in housing or the resurgence of banks.
Long time fans know that the "Mad Money" host does not typically advocate that home gamers trade. That's the deep end of the pool and something he thinks is better left for the pros.
"I have deliberately skewed the last 500 some odd shows away from trading and toward investing because there are so many more obstacles to trading than investing these days," he said. "You have to watch your positions like a hawk, to the point where it's very hard to do your full-time job and also follow the market."
Read More Cramer: If you insist on trading, follow 3 rules
The "Mad Money" has enjoyed a storied career over the years. And part of it involved working at perhaps the most prestigious brokerage on Wall Street.
"I had been courting and been courted by Goldman Sachs (GS) for three years before I got a job in what was then the Securities Sales Department, helping individuals and small institutions manage their money," he said.
Of course all that Cramer learned at Goldman Sachs could fill a book-it's called "Confessions of a Street Addict."
Although it's never wrong to take profits, Cramer quickly learned when his client at Goldman gave him an earful for suggesting to take profits on a stock he recommended, because it was to be bought as a long-term investment - not a short-term trade.
This was an accidental lesson in humility.
And humility, Cramer said, is another important tenet of investing.
Nobody is infallible and everyone makes mistakes. The trick is to have a plan in place in the event the market turns against you. Never get caught off-guard.
