week or so. both dan and tim will be there. >> go rangers. >> if you look at f freeport-mcmoran, that's been doing a stealth rally. you continue to ride that horse. >> silent f in clam. thank you forthat horse. [ music ] >> my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a whole market somewhere. and i'm here to help you find it. >> i'm kramer, welcome to mad money.

you need to know the source of your investing advice. tonight i will tell you i am, and how i got here. what i want to do tonight in the extremely special show is to trace the arc that brought me to mad money. it's to give you some money making lessons, from the phases of my various careers, and explain how you can try to make money. i'm giving you the investor guidebook, call that the skinny on how i learned to become an investor. you will become better than i would ever be. my love for stocks started back in fourth grade. my dad would bring home the

philadelphia bulletin. it was one of the largest newspapers in the country. he had it when he came back from work every night. i wanted the comics and sports. i was a phillies fan. i pivoted hard-core to the eagles. i was also curious. curiosity has always been a blessing and a curse to me. anyway, there was always this solid chunk of the paper that seemed impenetrable to me, the business section, it had these giant names that seems to go on forever. the other tables, different from the batting averages i would read, i read them from left to right, open range, close, what were these strange things? why did they matter? i asked my dad.

occasionally i would hear him get mad when he heard prices on the radio. he always seemed to get angry. i don't know what nashville video did but go out, but i don't know if pop did either, and i know it made him furious, and i wanted to know why. he sat me down and said one of those lines represents the performance of a stock, and the range was how low and high it treated during the day, and the close was what it was worth at the end of the day. it fascinated me. how could there be so many companies? why did they trade in ranges? they wanted to buy stocks and make money from those moves. i looked at a small tables, i always try to look at who was hot, would go up and who would go down. you study companies like you

study players. some were hot, some were duds. i told him i wanted to figure out the stock market, i wanted to know if i could learn something from just following the ranges and reading the tables. he said why don't you try? we would always watch the news while eating, even as i admit i hated it, because most of the news was about the vietnam war. right after the world news, they talked about or showed the most active shocks stocks, the ones that had done best and worst. hot stock was up the worst list, and i guess that's why my dad was so angry. i wrote down the names i heard, i kept them in a ledger that i still have. most of them were defense stocks that went up in tandem with the war.

i decided it was such a cool game, i wanted to enter it in show intel, to see who could find stocks that lit up during the week. my dad's company represented the minnesota mining and manufacturing company. he sold tape and sashaying. they were always innovating, coming up with new product lines. in fifth grade, pop came home with a new line of products he was selling. games. bookshelf games. he said perhaps i might want to learn more about the stock market. he had games he was selling well about business.

one was about takeovers, the other was about stocks and bonds. i loved that game so much. the point of mentioning all of this, stocks are fascinating enough to get your kids started on them right now. i urge you to do just that. it's easier than ever. get some stocks that your kids are familiar with, have them track them and yes who will do best overtime. here is the bottom line. get them started early, and they play for life. the stock market is a long-term contest. the earlier you get in, the more you can win over the long haul. let's go to dave, in california.>> thank you for taking my call. i'm an older retired investor, who is moving most of my gains

into t bonds and cds. what is the advantage of a bond letter, and how did those work?>> what i like about a bond letter, i want you to stay short, no reason to go out in the long end, reinvesting like that. i was want people to remember you don't want to bet against yourself and put too much money in bonds. stocks still represent the greatest opportunity. don't forget utility stocks, they can have multiple years of goodness. let's go to philip.>> thank you, i have been listening to your show since 2006.

you've made me all sorts of mad money. >> fantastic, thank you for that, thank you. my question is you called investment the eighth wonder of the world. i'm with you there. should i involve myself in the dip program, or ticket back and put it in socks stocks?>> i am a huge reinvestment person. for my cap and trust, i have to send the dividends out. it has really hurt my long-term performance. you've got to reinvest, that's where big money can be made. one of the biggest things i learned from getting interested in the stock market early, it's a long-term contest. the earlier you get in, the longer you make money in the

long haul. stay with kramer.>> don't miss a second of mad money. followed jim cramer. send him an email, or give us a call at one 807 43 cnbc. >> i love you man, i've been watching you from day one. >> thank you for all of the advice. >> i watch your program every day, i love it.>> thank you for being the greatest in the world. >> thank you for all you do. >> i love your show. >> i'm a long time fan of your

show, we think it's the most entertaining program on tv.

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don't wait- call today. welcome back. we are teaching them life lessons in investing. i've stumbled around the stock market long enough to learn a thing or two. tonight you are getting advice from the school of hard knocks i enrolled in and passed. you are getting the made-for-tv version, right here, right now. for law school, i went to harvard. i talked about my obsession, and learning how to trade through the greatest game on earth, strong stocks and bonds.

i left the stop market games behind when i got to middle school. my obsession became sports. i was the second fastest guy in school, forever. i ran in track, and my father ingrained in me the desire to save money. even in high school, i save money, i bussed tables. i got ice cold soda, then i graduated to selling ice cream. very quickly i learned the value of market power, specifically cornering the market, and i got the exclusive rights to sell ice cream on the

600 level and the 700 level. i had the only franchise in the upper deck. i made fortunes, except for one time they gave me strawberry ice cream. talk about having to run from a customer after they ere sold bad stuff. i had all this strawberry, you can't take it home. i take a beating whenever that happened. that's a business lesson. talk about learning how business really works. the shelf life of ice cream on a hot july night is very short. skipper, cab, chief, that's what people called me to get my attention. i never forgot the monikers, bud, partner, that's why i use

those terms on mad money. i contributed a little every week to the magellan fund. peter lynch, they are fabulous, get them. i didn't save enough when i got to college. i got out of college, after multiple attempts to get a job in the newspaper business, i was rejected by 57 papers. i landed positions, making $150 a week, which is not a lot. i still have eight tattered paystub to remind me of how hard it was, when i got started. nevertheless, i still saved. i applied and got a job at the examiner, that was a horrible

job, paying $179 per week. i found a terrific bungalow apartment. it was pretty sketchy, around the street from pioneer chicken, which was too expensive for me to go to. there was a horrible shooting, and when i returned, everything was gone, everything i had was gone, including my checkbook, which of course was cleaned out. so began my terrible, but thrilling six months of living in my car. i was living hand to mouth, people would take me in now and then so i could get a shower. it would be really important to get that shower, or a good night sleep. i never quit saving. you only need gas, car, and

food expenses if what you're living in your car. needless to say, it was not sustainable. i had no healthcare. the company put me on the road, i at least got to submit some expenses from the daily debt. i got fixed up, and i still put money away, even as i was making weekly trips to the doctor, who was one of the best i've ever had. the whole story is a challenge. i was living in my car and i invested. i never want to hear that you didn't save. that's what i'm here to say. i was giving money to the best of all time. i was taking advantage of one of the greatest markets in

history. the fund went well into the six figures. my contribution was just a few dollars per month, i never touched it, still haven't, i just let it build. i think the take away here is that i want you to save, no matter what the excuse. the earlier, the better. keep your ears open. sends the money in, as little money as you can, to an index fund. join the investing club, i think that is the best way to go. the real bottom line, i was living in my car, sleeping in the back, sick as a dog, what is your excuse for not getting started? you can put some money away.

>> good evening mr. kramer, thank you for everything you do.>> you have been such a wonderful source of information. >> thank you for all your advice.>> your advice let me create a job that i hated. i love you to death.>> thank you for keeping us from losing money. [ music ]

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tonight i'm giving you the life lessons i've learned the hard way, through a lifetime of investing. if you are picking stocks, you need to open an account. i have mine with fidelity. when i first began, i didn't know where to look for ideas. i went to forbes. i

booked shares for crops, and i lost half. i was devastated, but not defeated. i put seven shares in bobby brooks, a clothing outfit. the company reported a bad quarter, and i must have my money again. but a cheap $40 a month growth allowed me to restore my portfolio. i visited a huge public library in downtown manhattan and devoured everything i could find about bob evans. i compared them with other con

weenies in the industry, which is what you have to do. i bought 20 shares, and i've learned is the first thing in investing, know what you own. good service, nice enough growth, a big plan to expand to the midwest, that was for me. and then, standard pressed steel technology. a buddy of mine from high school said they were looking for a job, write for a trade, sbs doubled. 20 years later it would be acquired by another company.

pcp went on to sell itself to berkshire hathaway. i didn't like the random way i was making money. i was covering mergers and acquisitions. it seemed like every other deal was in the oil patch. i went back to the library and took out value line, and checked out the pages allocated to oil companies. they were publicly traded without a family owning them.

i found an oil company with a real gusher in india and asia. i didn't have long to wait. another lesson learned. by companies that would do well on their own. another oil company with vigor scale could do more, if they got rid of the existing management. i had given up the ghost in the first few trades. i had been hanging around the track on weekends, and i learned how to run the handicap. buyers picking winners teaches discipline. how to find the best long shots, going to the tracks, not bedding willy-nilly on every horse come in each race.

beth big, cut your losses. you know what you are doing, when others are not on a less well-known stock. don't gamble for the excitement of it. be disciplined, know when your losses pile up. i decided to hang it up and go back to law school. i never would have had enough money if i kept my money in a savings account. when you get started, go small, invest what you know. research, research, research. it's as simple as a keystroke, and the information is free. simple, no, lucrative, you bet it is. let's go to michael, in california.>> thank you for taking my call. >> of course.>> i know you have

a lot of to help here. this concerns my children. i inherited a good deal of money, not $1 million, but it's a substantial amount. i'm looking at a 30 year timeframe. i've been investing since the day my kids were born, i want to leave them some good money. i'm looking at berkshire and etf, vanguard etf, somewhere along those lines.>> i think the s&p 500 fund and the total return funds are both really good. vanguard is total return. as much as i like warren buffett, i think you have to have a basket if you do one stock. if you do the ones i just

mentioned, you don't have to keep track of them every minute. if they are young enough, maybe they can learn about it and be invested, and interested in their money. let's go to arkansas.>> how re you doing, mr. kramer?>> i'm doing well, how are you? i'm all right. what is the best way to have a long-term goal with a short- term return?>> it is risky, frankly. at one time or another, in my earlier years i would have suggested call options, and some longer-term stocks and mutual funds. these days, i am just against the short-term stuff. i don't want to encourage

trade, not my thing. anyway, if you want to get started in stocks, go small, research intensely. much more mad money coming, including what i learned at my time at goldman sachs. then i get with my investing colleague. stay with me. [ music ] [thunder rumbles] ♪ ♪

♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪ [thunder rumbles] ♪ ♪

tonight's show is all about you learning from my attendance in the school of hard knocks, with a focus on investing. i avoid losers. looking at my actual examples in my life, i want to give you a sense of how you can become a good trader. i've scooted away from trading and trading ideas, and work toward long-term investing. you have to watch your positions like a hawk during the day. there's a great set of tools and the ability to access information in the real-time.

you can't do the one on one, especially when you're doing it part time. there are some advantages that you have now that when i first started trading. you can get in and get out without much friction. the information you need is on your personal pewter or smart phone. trading is lightning fast. back then, i didn't even know what price i paid for stock, what i bought at market, or whatever. [ inaudible ] i had to go with what i knew, with all the stories from harvard law school, there was tons of downtime, and there was a lot

of research. they miniaturize everything to a little piece of film, then you had to read it through a machine that was a glorified microscope. this was probably the best way to publish things at the time. the first thing i had to do was work on finding one training idea per week. i figured i couldn't take a lot of chances until i really knew what i was doing. i was looking for stocks that had catalysts, or possible mergers, and stocks that could rally i read an article in the front page, and the newsletter, mr. bullish. i did not trade if i couldn't

explain what the company did, why i liked it, and what would happen to the stock. what was the catalyst? no buying if there wasn't a clear exit strategy. discipline by the thesis before i pull the trigger. when you trade, you've got to trade with confidence, otherwise you can be shaken out by the arket. are you willing to put a stock recommendation on your voicemail? we used to have those, and updated every week. i had a level of conviction. i was utting my money where my mouth was. there was some freelance work for the new york times, and work for a professor who moonlighted during these

defense cases. the publisher from the new republic tried to get me in on the piece. he got me three works worth of trade. he said he made more money from my answering machine and he wanted to give me half a million dollars. he said he had confidence in me, and he pulled out a check for half a million dollars. that was real money back then. i went right to work trading, and i almost immediately lost a ton of it. i had just blown it to smithereens. my mistake. a man's got to know his own limitation. you can't trade a huge chunk of money all at once.

you have to have a chance to pan out an entry point, come up with a reasonable entry point and exit. you had to know a trade, i didn't, i had no discipline, i violated my own rules, i blew it. i said please take the money back. instead, he wanted me to have more money, adding that i had learned my lesson. when idea at a time, keeping the rest in cash, i went big when i had the most conviction. i slowly but surely made it back. i invested in a more active trading portfolio. that would be the beginning of my investing career. we made a huge amount of money together. if you're trying to trade, make sure you have a catalyst, and exit points, then get out of the stock, even if the idea

doesn't pan out, because you are trading, not investing. you need conviction. would you be willing for the world to hear it? i want you to take a big swing at disney. start small, give it a try. >> your integrity makes you a saint of wall street. business. it's not a nine-to-five proposition. it's all day and into the night. it's all the things that keep this world turning. it's the go-tos that keep us going.

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with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? got him. good game. thanks for coming to our clinic, first one's free.

>> welcome back to mad money. i've been teaching you life lessons in investing. now we are up to the professional grade. i went with goldman sachs for three years before i got a job in the security sales department. if you want to know more about my history, i suggest you read my autobiography. tonight's show is about learning how to trade and invest, so i will dispense with the anecdotes and try to teach you how to make money. it starts with when i began the process of building a portfolio from the ground up. i had the best teachers in the world. the research director put on

investing clicks almost daily. you know who i have learned the most from? my customers. individuals can and do beat the market quite regularly. i have nondiscretionary accounts, i was not allowed to invest anyone else's money unless i could win them over to make the purchase. i made money that i could convince people to act on. you had to know your stuff. i would ask my clients questions about whether they knew enough about the stocks they wanted to buy. i wanted them to be as educated as possible. i knew if the stock went up, it would be their idea, if i went down, it would be mine. that's human nature.

what else did i learn? how about humility. i learned at goldman sachs how humbling this market. almost all stocks have tremendous tailwinds, but when one of your ideas goes against you, you have to explain why a person should buy more, or why they should cut their losses. i also learned to let your gains run, cut those losses. i learned the hard way. i had a real cantankerous client, a real estate tycoon i tried to win over for ages. he said he didn't want trades, he wanted long-term investment. i told him that i thought this stock would be a terrific addition to his portfolio, he agreed, and i got him 10,000 shares. i called him, and said bob,

sell the 1000 shares. i thought he would think me. was furious. he told me i had said it would be a good long-term position, that could have great gains over time, he wasn't the least bit interested in only making $8000. then he questioned my integrity, and wondered if i was turning him. i was scorched, i was burned, but it taught me a terrific lesson. you don't want to turn your investment into a trade. bob was right. i was vindicated, despite myself. finally i learned the science behind a portfolio.

i wanted to figure out what they wanted. where they conservative? were they aggressive? i tried to get to know them, and urged them to get to know themselves, just as you should know yourself. you can handle the pain of a market decline. you get most of it from fixed income, bonds or dividends. you want to hit it out of the park with some of your capital. i try to teach you how to know yourself, to know what you can handle, at what you can't. this is where i learned the value of this verse occasion. you can have oil companies double and double again.

one day, oil plummeted. some global tensions had gone up. those who earned nothing but oil stocks, i learned about diversification. here is the bottom line. from my early days, i learned about investing, finding solid ideals to create long-term wealth in a way that suits the customer. consider yourself the customer of this show. stick with me.

>> i watch your program every day, i love it.>> thank you for being the greatest in the world. we consider you the money market maker. you for all you do.>> i love your show.>> it's the most entertaining program on tv. [ music ]

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through this entire show, you've heard me pounding the table on how nvestment in the stock market is long term. i love to teach my viewers, and also learn from them, which is why i always say my favorite part of the show is answering questions directly from you.

i have my portfolio analyst, we are going to answer your most burning questions, which are always amazing. let's take a look at what we do in the club. if you are not a member of the club, scan the code behind me. i hope you will sign up. first up, we have a question from sandy, this is my husband and i are at retirement age. i don't like olding stocks when they lose value. my original investment is in the negative. i prefer solid stocks. keep or sell these losers? retirement age, that is the eye of the beholder. i have been a big believer, contrary to the entire industry, saying there might not be a retirement age when it comes to stocks. people should always be investing for growth, some ford

dividends, and some for bond. at times you have to take the risk, but you just use smaller amounts.>> there is always a balance to everything. without knowing the stock, if the dividend investment is in the red, maybe they are not growing cash flow or earnings, maybe they are not growing dividends, that can be a red flag.>> you know we got involved in footlocker, and the cash flow to the client. of what looked like a good dividend stock became a non- dividend stock. unfortunately you have to do a level of homework. you are going to miss things, but what matters is, i want you to have more exposure to the stocks than people who expect. retirement age might turn out to be 20 years of capital.

next up is bruce, in michigan. he says how do you set price targets? i'm going to defer to my colleague, who does a lot of the price target setting.>> it is an art, and a science. when looking for price targets, look at some historic multiples of where stocks trade ads, try and figure out how much you think the stock will earn out of the future, and apply that. another key consider raising consideration is if the company is improving margins and trading at a share. it can at least catch p.>> during the great runs for lily and nvidia, how did you set up price targets?>> those were some of the great momentum stocks of the last couple year. stocks like that, you also have to look out years in advance,

especially in the case of eli lilly. it is near the end of the decade.>> we take it very seriously.>> let's go to lindsay, in oregon. she asked do you sell shares with the lowest cost basis, or the highest cost basis? this is an accounting issue. there are rules on what you can and can't do. we sends capital gains and dividends out, and we often want to get rid of the ones that have the worst, our stock and trade.>> this is always a question of tax consideration. if you are taking a profit and selling at a lower tax basis, you will trigger a higher realized gain. if it is at a loss, it is a

smaller loss, it's a tax consideration.>> take it as they come. last in, first out. don't ever get in trouble, that's my lesson for the irs and you. right now on last call, if it's boeing, are you going? another one of its jets hit by a safety incident. we will show it to you. bit coin's rocket ride, is another milestone for prices ahead? we will get insight outshining american stocks. the hottest place to make money may be overseas, we will show you where. is your car spying on you and selling your driving data to insurance company? a stunning report revealing all that you see and hear. and an inarg deal and the ceo behind it joins us. and it i