us. and looking sporty. it's as breath of fresh air. walmart, this is a company that should be trading at a higher multiple. i like walmart. >> and carter braxton worth? or ishares treadsry bond ift, sht. >> thank you forto share yep lt. >> mad money with jim cramer starts right now. . >> my mission is simple. to make you money. i am here to level the playing field for all investors. there was always a work around i promise to help you find it. mad money starts now. >> hello. i'm cramer. welcome to mad money. welcome to cramer america. my job is not just to entertain but to teach you. that is what we are doing tonight. so call me or tweet me at jim cramer. tonight, i'm letting you in on

something big. the method to the madness. i think you can put in the time and effort. simply investing in individual stocks. running your own portfolio rather than dumping your money into the index fund is something i'm confident all of you can do by yourselves. i always emphasize the homework and i hope you do that homework joining the cnbc investment club. my old rules one hour per week per stock. this week and these days, the research is readily available online. a few hours if you own 10 stocks. easier time and cut down. we do them with you. investing is more than just 10 stocks. then i get worried. that could be difficult unless your matching money full-time. of course if you don't have the money or the inclination, you are better off putting her money and a low cost index

fund. and i like these. they are good. i am in some. if you are willing to put in the work, regular people can be disciplined and follow the rules. rules we constantly highlight as part of the cnbc investing club. that is what we are talking about tonight. the show is all about the method or methods to break the bar to my madness. highway pick stocks? how do i tell you some are worth buying and some are not? those of the questions he will constantly ask me. tonight you will get the answers. i have her too many methods. too many ways of picking up great stocks for one show. i will give you the tools of my trade. not so you can start but pick stocks like me on your own. i want you to be a great manager of your own money. you can focus on a smaller amount number of names. this is about educating you giving you the ultimate insider perspective of how the market works and how it can help you

make money. just to dole out the stock picks like the proverbial fish you give a manicure too lazy to shop for fish at whole foods. i want to empower you to give you the tricks are used to pick out great stocks and invest in them like a pro. methods that have served me well for more than four decades and allow me to get an annual 4% return for my hedge fund. not bad. these skills are what refresh the show and guide me as i manage my own travel trust now. a learning exercise. now let's get rolling. what are the easiest names to identify cramer names? the stocks that i should possibly own but don't end up on the show, it is by watching a list that comes out every day called the new high list. stocks in this highest list, the high of the high, has something going for them and that is true in the market is in bad shape. the best of the best can hit

new highs and the averages are falling apart. what does this tell you? either it is of a broader bull market because the sector is on fire or that it has serious earnings or sales momentum. no matter how they get here, many stocks keep going higher because it is kind of a list of a students worth betting on. they tend to keep getting straight a's. just like the smart kids in school. a great bull market. we see this over and over again. the same stocks with new high after new high afternoon high. and even as the bear claimed endlessly that it could be false and not trusted. this is caused you to miss out on some of the greatest rallies in history. i'm not saying you can just chase any stock hitting new highs because they would just go higher. that would be true bozo the clown behavior. i'm saying that if you want to identify potential winners, unless there has been a stunning change in the market by interest rates or the political environment, then a good place to start. but another place to start is

the new aisles. emphasis on start. that is the thing about the market. it is not that hard to play. things pretty much keep going the way they were going until something major shifts. and then you have to lower the course. those course changes can be pretty radical. that is why you always have to be really evaluating your ideas and should never dig in your heels when the facts change. >> i recommend buying stocks unless there are special circumstances later tonight. what i like to do when i'm punching for stocks and what you should do is wait for something to pull back from the new high list because that is the best place to start. this is an inspiration list. you watch those and then wait for them to come down so you can pull the trigger.

>> this gives you a good lower priced entry point and a stock that has likely a lot of positives going for it an overall move in the stock market. less than 5%, two -- too early. this is a fabulous way to identify potential. you only buy stocks that pulled off from the new high list if you are confident they will make a comeback for substantive reasons unrelated to the broader market. unrelated to the broader market but related to your stock. to do the same homework you normally do. even if it is conviction of stocks going higher and it is cynical. the biggest caveat of all when you are shopping for stocks that pulled back from highs is to make sure they have not pulled back for good reason. the selloff needs to be extraneous to the business. don't go getting a homebuilder down when interest rates are up. if a big pharma is hurt by higher rates, that has nothing to do with earnings.

maybe it is worth buying. make sure you are dealing with it damaged stock and not a troubled company going down. the fundamentals have not changed. the stock probably has not fallen from grace. it has pulled back for mechanical regions. more than ever, stocks are traded like commodities. ultra levered hedge funds causing zoloft to make no since whatsoever. you will see high quality stocks pulled back for unrelated reasons to the core business. of the fundamental picture changes, whatever made the stock attractive as it climbed its way to the new high list goes away and that stock is no longer a candidate for the portfolio. this story has to be intact or the method won't work. here's the bottom line. that is the first method. watch for stocks that have pulled back from a preselected list. the new high list. because a broad market selloff is sometimes a great opportunity. some of my best pictures have

come out of this process and hopefully some of yours can too. let's take some calls. let's go to andrew in georgia. >> hello mr. cramer. how are you today? >> good day. how about you? >> i'm well. you for asking. i'm a fairly new investor and have been investing for about three years. i want to say that i appreciate everything you do for the new guys who don't know what they are doing. >> thank you, andrew. terrific. how can i help you. >> my question is about earnings. i want to know. after the earnings announcement, how long to wait like when you say the smoke clears and would to be look for -- in it. i find that after the ipo, you have to be careful because what

you have a lot of analysts that want to stay positive and say positive things and they tend to lose their critical faculties. my advice is very clear. when you get a stock that is down substantially from where it opened, that is how you look at it. a lot of times, the opening is controlled by people who are way too enthusiastic. a company with actual earnings and a good balance sheet that trades at a premium to the stock market but has a premium growth rate, that might be okay. otherwise, no thank you. i will find better stocks. how about greta in west virginia. >> first of all, thank you for everything you do. i think you are a national treasure. >> you are very kind. thank you. >> when you want to generate cash, how do you decide what stocks to sell? >> we talk about this a lot with the club. i tend to rate stocks one, to four. always willing to sell a four or three.

what i try to look at is, i look at it like a painting. i don't to buy a new painting without selling an old painting. what i look for are companies that reported a bad quarter and it is disappointing to me and have a little bit of lift that i can start lighting up from. i don't want to sell the company that just had a good quarter but companies that are always there and you have to have that discipline too. as hard as it might be. >> timothy in new york. >> hello mr. cramer. thank you for taking my question. >> sure. >> i want your opinion of quandt's. understand the screen dozens of parameters on thousands of stocks and use algorithms to rank them in terms of growth, momentum, profitability, revisions and so on. >> they have a very good and

repeatable performance. it seems that these are a valuable tool. on the other end, why would an investor use them exclusively? >> that is a great question. i think that a lot of times the quants go up and down and trade too much. they recommend stocks and then the chart says no or the numbers say no. i like to buy great companies with great management and have a good secular tailwind behind them. and the quants don't necessarily catch those. i think everything, whether it is quants or charts or whether it be everything from research, i like to included all. if quants has great records and they share data they are using, i am a buyer too. now you know the first method to cramer's madness. watch for stocks that pulled back from the preselected list of good companies. and a broad market and not because something happened at the company itself. i am giving you an in-depth

look at more methods to my madness. if you want to have a better more well-rounded since of your own stock portfolio, you do not want to miss the rest of the show! so stick with cramer!

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welcome back to tonight's methods to mend a special where

i'm revealing some of my best tricks for buying and selling stocks. i will give you the sure ones. i would tell you to think of me as the penn and teller of the stock market with a physique more like teller. i want to pull back the curtain and she how professional looks for stocks to buy and to sell. there is no magic. no hidden talent. a bunch of discipline i can help you try to make a mad money if you master them. you don't have to be the old or smart. you have to know what you are doing. this is where cramer comes in. maybe less of a sad clown these days and more like king lear. something to think about. and of shakespeare. let's move on to more important things like i to find stocks that are great buy. earlier i was talking about picking off off-season stocks. you get a cheaper entry point. i said you really want to buy names off the new high list

because you are paying too much for them and usually get a better chance, a better deal if you wait. five-day percentage. given how volatile the markets can be even when things are going well, there are few occasions when it can be justified. have some patience. sometimes it is so hot that you have to buy as soon as you can because it is not getting lower anytime soon. you won't find is often. but when you find them, you have to remember not to buy all at once. when you have 100 shares, we think it has so much mojo. get 25 shares. the worst that happens, it goes higher still. you get a quick profit and find the next one. and believe me there is always another one coming down. one exception where it is okay to get a stock had a new high. if you see insiders buying stock when it is already of a great deal, that is a total greenlight. don't laugh. it does happen. it is rare but it happens. it is very of this method not

working out. i love when i see the insider buying after a decent run. that is a terrific sign of confidence that the round may just beginning or there is a big runway ahead and they think it will be long-lasting. fyi, insiders can't flip a stock that they buy immediately. they have to wait six months or the government takes away the game. that is the law. so these people are seeing positive things that likely won't disappear in six months time. and boy do i like that! normally insider buying ranges from meaningless to small. but on its own, it is an efficient reason to buy a stock. sometimes you catch them buying the stock because they want to give the impression of confidence and create an illusion that they are doing better then they are. insiders are not stupid. they know that if they are seen buying their own stock, even in small amounts, then the market will smile upon them. then they gain the system. that is fair. but it means we ignore most insider buying that is not substantial because it could be pure flimflam. if it is truly colossal, you

might want to take another look at the stock in question. when insiders buy a lot of shares, it is a powerful endorsement. it is the value that does this. we are focusing on one sort of buying. the kind you see with stocks that have been running and are perceived as being historically cheap or low dollar amounts. those sometimes can be down there for a reason. there is nothing more arrogant and yet telling then when an insider backs up the truck for their own stock when it has been rolling along at a good clip. think about it. they are saying, we know we rock. we are so darn confident that it will keep going higher that we will buy shares right now hand over fist. arrogant, sure. but it is rare. corporate insiders have some notable exceptions in the mad money wall of shame. and if stocks are already on a terror, it is probably a good chance executives know what they are doing. of course them that everyone deserves the benefit of the doubt of the business and if there are so many investors i

got burned by the 2021 boom with ipos, i know a lot of people assume most ceos and executives are a lot of liars and crooks. that is less from the draw from the ipo. healthy steps is one thing. a total unwillingness to believe anything positive is something else entirely. if you will invest in the stock market, you need to have some measure of trust for the people who run the companies that you own shares and/or else why bother? just go buy the index fund. widows could be going on quickly even when the ftc and the justice department and the trust division are hostile to mergers, you still get some pickups. sometimes executives will buy their own stock because they hear footsteps of a potential buyer. they hear companies are interested in them and it is nothing pacific specific. and they turn them down. it is a healthy and honest reason to buy. or maybe they realize that the business is worth more then they thought and can be broken up bringing out value.

there are all different generations look even tyco and dupont. we have seen tons of these breakups over the years. wall street like smaller and more straightforward companies that are easier to get your head around. think about carrier and otis and united technologies. maybe they get executives see the ability to create value and they wanted on themselves or the stocks run a bit but they don't think the run is over because they recognize how much better the business will be when it is broken up. for me, buying after a big rally can feel reckless and even lazy. most investors are smart enough to wait for a pull back before they pull the trigger. but insider buying after decent run tells me that one of the people that knows the business best doesn't believe there will be a pull back and there is nothing more bullish than that. you would want to wait until the stock sells oft after the insiders have bought. that is the best of both worlds. i have not seen it happen that often. but i have seen it for some red hot tech stocks.

bottom line, one more method to cramer's madness. when you see insider by in on a stock with insider run, you might want to do some buying to. med money is back after the break! . coming up, need another tool in your belt to identify the right time to buy a stock? cramer is revealing how short interest in a name could be your telltale sign to buy it next. if your business needs a new application then developers will have to write code.

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you are in luck. you caught cramer on a good night. i'm not going home to sip cheap scotch from a dirty note linoleum floor. i apologize to dewars sketch of choice. have you ever tried the 18-year- old jamison? sweet! i am in a great mood.

a manic mood which is me at my best. i am pretty darned productive in high gear. i am revved up. and revealing many secrets. the methods to my madness. i'm giving you some of the best ways that i know to pick stocks. i will teach you to invest to trade like cramer. not to be like me because i have some emotional issues that you probably would prefer not to emulate. someone off track. so far, i have given away two of my precious secrets. two of the tools i used in my hedge fund. and that you can follow by joining the cnbc investing club. i play with an open hand and not a poker-faced. allowing subscribers to see all of my trades before they happen. when teaching tonight is a single set of stock that might be worth owning and it is worth your time and effort to go through the often boring process of reading to the conference call transcripts and quarterly filings to do the

necessary homework. there are thousands of stocks out there. any method we can use to narrow down on them is a method we are having. i talked about insider buying. and i don't usually is insider buying. and to determine whether or not a stock has it going. there is one other scenario where insider buying makes for an incredibly bullish tail. that is when the stock is in a heavy and short position. a lot of people out there have borrowed shares or sold shares that are waiting for them to go lower before they buy back the stock. returned to the bank and collect the difference between the price they sold them at first and the price they bought the stock at later. think of it as regular investing but in reverse. we try to buy low and sell high. and then turning that around and selling high and buy low. there are a lot of smart people that have serious conviction that the stock is heading lower. and facts, it takes more conviction to short a stock

then to go along. when you shorten the potential downside, it is incident when your long, the stock stops losing money when it hits zero. shorts lose money when stocks go higher and the other thing is that if there is a lot, the stock all of a sudden gets great news and we get what is called a short squeeze. it sounds like what it is. in order to close out, the shorts have to buy. this is called short hovering. a lot hover at the same time and in a panic the stock will surge. here is what you have. a lot of people desperate to buy the stock and cut down on losses and a lot of demand. they have to buy on what they want the performance to be wiped out. the process is so protectable that it sometimes will be a short squeeze. that is what gamestop was all about. that is what amc was about. that is with the meme stocks were about. where is insider buying fit? let's say you have a stock and some of the will that run the

companies are buying shares for themselves or maybe an outsider takes a more than 10% stake in the business. in any case, it wants more. it's almost like drawing a line in the sand saying, our stock goes the slow and no lower. this is an explosive combination. and it often leads to a short squeeze and the stock is higher. shorts are smart and they tend to be smarter than long site investors. but they often don't know more. if a lot of people are shorting a stock and management starts buying it in sizable amounts, you start doing your homework right then. feel it. usually make sense to decide with management and you can read -- ride higher and higher in true jackie wilson style. as the shorts panic and push shares higher and the desperation to cover cut losses and moves on. certainly company with a heavy shortage stock announces the gun buyback. bigger than any previous one. that is another line in the sand situation. companies often repurchase

their own shares. not all or bullish but some are outright wasting money. a new buy back in the face of the shorts is often a good reason to take a closer look. a note of caution. you need to be very careful doing with a company in the crosshairs. especially when people are nervous in the market is in bad shape. just to know the landscape. you know the fundamentals are there. these days, stock owners no longer have the benefit of rules. they make it harder. when i got started in the business, it was much harder. but the sec gutted the rules under both democrat and republican administer regions on the name of creating more efficient markets without these protections were you can't smash the stock down. any time something is wrong, and we see it during the financial crisis of 2008. that was a horrible period. in a smaller version during the crisis of 2023.

so it is like shooting fish. other than a few like first republic, they were fine. of course in recent years, short-sellers found themselves talking about bull raids facilitated by social media platforms. so they have to be careful. but only after the meme stock. that is a highly unusual situation. you can still find great opportunities after they have overreached. before going into one of those situations, i have to warn you that the balance of power still favors the short-sellers. that means even if the short- sellers are wrong bout a company's prospects, they can still demolish the stock. especially for a highly visible campaign. many times, it is right in the stock deserves to be slaughtered. don't underestimate the amount of damage the shorts can do to the stock. in the end, the best are the stocks that play good and solid

dividends. when you are short a stock, you have to pay a dividend. you see the dividends and the yields going higher. that is often a career for a place to be. especially when the insiders are there too. so here's the bottom line. insider buying plus heavy short interest can equal raging bull buy. as long as you have the situations where the shorts are determining to crush the stock at any cost. let's go to debbie in colorado. hello debbie. >> hello, jim. my husband and i are proud members of the club. we actually absolutely love it. it is so much fun. >> i will pass it on to my colleague. fantastic. >> my question for you today is, i have a 31-year-old sun fast and he is finally starting to listen to me. so i was wondering if you had some tips and tricks for us to get him involved in the market? he has a good amount of money to spend and he is really excited about getting involved. >> there is so much he can do. i would first look at biotech

which has some amazing situations. i like vertex. i think he could look at vertex. that is a terrific company. and let's not forget that you want to have a diversified portfolio. it is okay to take a look at the stocks. you and i both know. honeywell and maybe you have a stock that is a bit of a flyer, like footlocker. so emphasize the science that he could be in good shape. now we will go to vincent in new york. >> hello, kramer. how are you? >> i'm good. how are you? >> i'm well. >> how much advice and what kind of advice would you give a 26-year-old that has been daytrading for 26 years and looking to do better? >> if your daytrading, it is a full-time occupation. what do you want to do is put

money in the return fund and put money in the vanguard s&p 500 fund and keep putting money away every single month. if you made a lot of money, take off some capital and put it in the vanguard account. that is the way i would suggest to do it because i want you to have exposure to the broader market and not just the stocks you are trading. in most cases, the stock of insider buying and heavy shortage does you have to avoid the situation where the shorts are determined to crush the stock that you owe. more mad money ahead. i have more tools to show you. so stick around!

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my interviewers know that this shows all but investing. stocks for the long haul. not short-term trading. is easier to be a good investor than a good trader. especially part-time. knowing how to trade makes you a better investor. this is one of the most basic and useful disciplines out there, especially the markets get hit by wild springs and swings. that is most markets in recent years. what does it mean to trade

around the core position? first you need a stock. pick one you like and have an opinion about. when you have a bias about in a stock you think is heading higher over the long term. what you are searching for is a great company with shares that might get tossed around with market volatility even if you believe they will only get higher if you are patient. buying gradual increments is good because we know the buying at once his. arrogance. and by the way, the whole process of buying in increments is something we are constantly showing you how to do if you belong to the cnbc investing club. take something like nvidia. they make the most powerful semi conductors on earth that we need for cutting edge applications like artificial intelligence. i have loved nvidia for the long haul. it has an insanely volatile stock let's say you want to own 100 shares of nvidia over time. to get 25 shares over a period of weeks or even months.

if that is your core position as an investor. let's say you want to trade something that is hard to do cheaper then it has ever been. home gamers can fit in and fill it out. no stock commissions. i would recommend. trade something like nvidia. but this is a different story. let's go back to 100 shares of nvidia. sitting at $500. every time the stock jumps another 5%, you could sell 25 shares according to your position. you shave a little off to bring in some profit. so nvidia hits 5.5, we have seven shares. keep scaling on the way up. but never sell the final 25 because that is your core position. if something happens to knock the stock back down and nothing has changed with the underlying thesis, use that for stocking more nvidia. we have done this for the trust. it will happen pretty often. since we are in a world where stocks can get crushed by all kinds of factors, nothing to do

with fundamentals, that is what happens. as the stock comes down to the original cost basis, you buy it back in increments. we started with 100 shares. let's do increments of 25 to buy it back on every decline. you can go beyond 100 shares and if it comes down low enough too. this might be small potatoes come up 5%. down from where you started by 25 shares. repeat the process. over time, the prophet will add up and that is what trading on a core position is all about. a lot of people think trading is incredibly exciting and it can be. but if your good trading in a core position, you should be pretty board. all you are really doing is watching stock moving and adding your position accordingly. the image of training is something reckless and irresponsible. trading at a core position is really the height of prudent adjustment. so it is good in this business. exciting. obviously you can seal the numbers depending on how big your position as.

the best idea is to avoid putting yourself in a spot where you have too much on the table in case the stock gets done or too little on the table to take advantage of anything outside that comes your way. trading in the core position is an important basic strategy that everyone can use. even those of you who find the notion of trading abhorrent. because it is less trading and more of a supplement to investing. here's the bottom line. nine of the basics of how to trade around a core position. and another method to my madness, one allows you to generate a lot of small gains that i am telling you will add up over time mad money is back after the break! . >> coming up, cramer reveals his tools to the trade of buying a stock. what about selling them? cramer is breaking down how to get out of a stock at the right time when mad money returns .

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is amazing. (we did it) i've been maintaining. the weight is gone and it's never coming back. with golo, i've not only kept off the weight but i'm happier, i'm healthier, and i have a new lease on life. golo is the only thing that will let you lose weight and keep it off. who loses 138 pounds in nine months? i did! golo's a lifestyle change and you make the change and it stays off. (soft music) i have one more trick to teach you tonight. one more method to my madness. i want to talk about selling. how do you know when to sell stock? how do you get out before the

party ends slager the not the last person to get stuck cleaning up the mess? this is a question that needs to be answered. there is a lot of money made with hot stocks and a lot of momentum. when you play the momentum game, you need to know when it is time to leave the table. there were always naysayers and eventually they are almost always proven right. remember everything with the collapse. it usually occurs later rather than sooner. and all the negative talk keeping on of the recklessness. at actually cause you a great opportunity to make money. people shy away because they don't know where they will stop or where they will top out. it is understandable. i would be afraid to buy them too if i did not have the discipline to let me know. but i do have one and you are about to learn it. the first one i'm talking about is hot speculative stocks. stocks of companies with fairly low market capitalization.

usually the stocks begin with very little research coverage and they often don't have the earnings or sales. i would never get these. these can go up for a very long time. they can catch fire and stay on fire for years when they have the wind at their back. it is not the stock. it is watching the analyst coverage. you have to use your own judgment. a good rule of thumb is that when one of these hot stocks has a half of a dozen analysts covering it, the run will peter out. the stock in question is becoming too well-known. it is a speculative winner that can keep winning after it gets big. you can find out how many people own a stock by looking it up online. it is not hard to find information. the formula has worked for me as long as i can remember. it works because the number of analysts is a good gauge of how

much awareness and interest there is. hot stocks get tapped out when there is no one left to be attracted to them or to go buy more. when all the people interested in buying have already bought. they come out of nowhere attracting more attention and more backers and eventually everyone wants a piece of the stock and has a piece of it already. and it runs over and it is time to go home. and if the meme stock guys get their hands on it, take advantage of their enthusiasm to bring the register. it is a great sign that you went out because they can only push a stock up so much before they run out of firepower. of course, there are other situations where speculative stocks go out-of-favor all at once regardless of how much attention they get. 2021, we had a huge run anything related to electric vehicles. think about carmakers or battery plates or charging stations. same with software stock. a lot of this is easing money environment with near zero interest rates. a lot of liquidity kicking around and it had to go somewhere which is why so many

money-losing companies had red hot stocks. then the federal reserve declared war on inflation in november of 2021 letting you know that the age of zero interest rates has come to an end. we knew that this was about to be drained out of the entire market. that is what always occurs when they tighten rates. anything speculative was toast in a new environment. and said you wanted new companies that make things or do things at a profit. i know was not the most elegant way to freeze it. but they held on better than speculative i got obliterated in 2022. putting aside the interest rates issue, when the fed is not tightening and it is safe to speculate, you need to watch how many analysts are following the speculative stocks to know when the run will end. the bottom line. when a red hot speculative stock it's too much attention, needs to rally slightly on its last legs. there are only so many people willing to buy these things and eventually, they run out of fire power. stick with cramer!

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always say we have the smartest viewers in television and i love taking your questions, listen to your pitches and listening to what americans want to know about. joining me today to do this is jeff marge, portfolio director for cnbc investment club. we are answering your burning questions in your hashtag mad mentions. jeff does a great job of helping me out with analysis and for members of the trust. if you are not a member already, what are you waiting for? let's start right now with 10 in alabama. i think is a great question. how do you decide whether to take profit rather than keep a stock longer to receive capital gains tax? these are always hard issues because i think you have to worry about that kind of thing with your accounting professional. what i care about is whether the stock will go up or down. and i believe that stocks can go down, you should take it off the table even if you have a big year.

that is what matters to me. >> of course you want to see qualified advice for something like that. but for the travel trust that you can follow along with at home, we don't play the text game too much. everything gets donated to charity at the end of the year. >> i think that i have always felt from real money, my first book about investing, never fear the taxman. fear the losses. >> next, taking a question from russell who asks, i always try to follow your advice to buy stocks and forge portions rather than what i often end up with different stocks making it hard to measure. what would you recommend? >> this is another one where this is a discipline that i came up with which says that it is a way to figure out whether you missed the move or not. if you come in and the stock keeps going up, there is no doubt that you are late. there is nothing you can do.

i have accepted the consequence. if i'm late, then all i do is have a small gain. that is the way i look at it. >> it is a high-quality problem to have. if you are able to continue to do your homework. then you can hold over especially if the prospects are good. it is a challenge because you don't want to spread yourself too thin with a different number of stocks. if they are going higher, it is a quality issue that we deal with sometimes. >> it is a discipline. what happens if you buy all at one time and it goes down? it could go down. that is the worry. >> let's take a question from randy and ohio. i know that when bonds sell off, the rate goes up. why would this impact stocks? there are many different ways you can answer this. one is that if interest rates go for something risk-free for the bond, then that has greater appeal from a dividend which may be equal because the dividend, that is only part of

the equation of one a stock matures. if the stock goes down big, you wipe out whatever gain you get. and of course there are long- term considerations as you know just about the value of a bond versus a stock. >> it is competition for dollars. like you brought up and mentioned. but interest rates are also used to have a discounted cash flow model where investors look at the cash flow out and they discount them back and when the interest rate is higher, they get discounted at a higher rate which lowers the value of stocks. there are also things like financing costs if it is used. of the company relies on financing to sell their products. higher rates might hurt their business as well. >> you have to think, stocks are not as competitive in many different ways and bombs if rates go up. it is really the way you have to look at it. even if you don't actually understand the cash flow. you have to take it for granted that that is what

occurs. >> next, lynn and virginia wants to know, if i only had five shares, would you recommend taking the profit? should i close out the position or let it ride? these are questions so hard because five shares reminds me of just the tail end of having a wind. it's like a tailwind. and what do you do? five shares is really so that if the stock goes down, you can buy more. if the stock goes up and we recommend to sell, i would just get rid of it. i really would. i would say, let's move on and find something better. there is always something better. >> it is absolutely a fair debate. they are growing the dividend and growing the profit. the outlook is bright. maybe you could sell one or two but you also don't want to fall into the trap from the earlier question that we just had about managing too many positions. it is always across discipline happening. >> at that is one of the things people don't understand about investing. there is no right or wrong. it is often two rights that compete against each other.

we have a question from kyle who asked, do you have a symbol or approach to approaching and index funds as he did for stocks until you went to the oscillator is oversold? or would you go across average? this is funny because this is where i have gotten two disciplines. what i like to do, if i'm putting money in every month, if there is a month down more than 10%, i double. let's say august is down 10%. i take july's contribution and i keep that. august contribution. and then i take september's contribution and i take september and august together and i feel like that is a good mood. so you have two twelfths. >> stocks generally should be more attractive as prices come in. you wouldn't run from the sale of a department store. on the other hand, what i would say is if it was index funds, it is more about time in the market and not necessarily trying to time it oversold or bought. you just wanted the investment

for the long term. >> i think that is a really important issue. we do not, by my method, try to imply that we are timing the market. just trying to put more money at one level but certainly do the rest. >> that is the way you should do it. >> what can i say? there is always more market somewhere. i promised i would find it for you right here on mad money. i'm jim cramer. see you next time! . >> right now on last call, turmoil in the middle east taking a turn twisting in the wind while the biden administration refuses to overturn an apple watch ban. holy until! the chipmaker is at the come back cranking up. a big buy signal for stocks. a major trend among one group of investors. and a loss that may live in infamy. the detroit pistons on the brink of a historic losing streak as