bullish on oci, oracle. >> guy? >> danger, will robin zone, in the form of dollar/yen headed to 160, melissa, which means gold goes higher, which means new mining. >> all right, thank you for watching "fast money." see you back here tomorrow at 5:00. "mad money" with jim cramer starts right now. more "mad mon cramer starts right now. my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to save you money. my job isn't just to entertain but to educate and teach you. call me at 1-800-743-cnbc. or tweet me@jim cramer. you want to know where that person is coming from.

that's why tonight i'm going to tell you exactly who i am and how i got here. no, not the standard introduction, i'm jim cramer, host of "mad money," cohost of "squawk on the street," what i want to do tonight in an extremely special show by even my wacky standards is trace the arc that brought me to "mad money," not for some autobiographical ego trip but to give money making lessons from the various stages of my career. instead end, this the cramerica. i'm giving you the investor cramer guide book. call that the skinny on how i learned to be a good investor, so i can help you become better. i want you to be better than i'm going to be. that's our mission in the investing club too. let's start early. my love of stocks didn't become after law school or college or even high school. my love for stocks started back in fourth grade. you see my dad would bring home the old philadelphia bull, what

a long time ago that was. it was one of the largest newspapers in the country. he'd have had when he came back from work every night. i wanted the comics and sports. i was a ridiculous phillies fan. i pivoted hard toward the eagles. curiosity has always been a blessing and a curse for me. not only the proverbial cat, occasionally jumping on hot stoves. there was always this solid chunk of the pavement that seemed impenetrable for me. the business section. it was impenetrable. it had a giant list of names that seemed to go on forever. there were the other tables, different from the batting averages tables, box scores, i scrutinize with regularity. when i read them left to right, they made no sense. what's open, what closed. what were these strange things? why do they matter? i asked my dad who i knew dabbled in the stock market. he heard prices mentioned on the

radio. he seemed to get angry, when i heard national video and how it went out. i don't know what video did other than go out and why it went out. i don't know if pop did either, though, but i know it made him furious. i wanted to know why. he sat me down one day and explained that each of those lines represented the performance of a stock of a company on a different game. the open was where the stock opened in the morning, the range was how it closed at the day and the trade was at the end of the day. that fascinated me. how could there be so many companies, and why did they trade in ranges. he told me people tried to figure out which stocks would go up in value, and they wanted to buy them. when i looked at baseball tables, i was trying to find out who would go up on average, who would go down and what it mwoul mean for the teams i liked. you studied the players. just okay, some are hot as a pistol, and others were plain

duds. i told him i wanted to figure out the stock market too. i wanted to figure out which stocks would go higher, just as everybody else. i wanted to know if i could learn something from following the ranges and reading the tables. he said, why don't you try. it seemed pop put the tv on in time for dinner. we watched the news while eating. i hated it because most of the news was about the war and that meant the vietnam war, and it was really not going well at all. they all mentioned the dow jones industrial averages. they showed the most active stocks then, the ones that had done best to worse. national video, pop stock was off on the worst list, and that's why i guess my dad was so angry. so what i did was write down the names that i heard, and i tracked them. kept them in a ledger i still have. what a terrific game it was, trying to figure out the next move of a stock, not a player. all i knew was the name. most were defense stocks, and they went up in tandem with the war. after a year i decided that was

a cool game, i wanted to introduce it to my fifth grade class. i went in, showing them the ledger and the play to see who could find stocks that went up the most during the week. needless to say, not everyone was ento -- is into it. my dad's company represented 3m, he sold tape and ribbon that bowed easily. remember there was a time you had to make your own bows. coming up with new product lines, it does, but these days it is plagued by major l litigation issues. pop came home with a new line of 3m products he was selling. they got into what was known as 3m book shelf games. i might want to learn more about the stock market. he had two games that he was selling well about business. one was about takeovers, the other was stocks and bonds. i almost cried when a good

friend bought me this recently. i love that game so much, and at one point, i asked the old ceo of 3m, bring the games back. neigh don't have the rights anymore. my own stocks games to stocks and bonds, the stocks are fascinating to get your kids started on them. pick stocks, stocks with companies, and have them track those and guess which will do best over teem. here's the bottom line. the bottom line at least of my childhood stock market obsession. we started it early, and they may play for life. the stock market, it's a long-term contest. the earlier you get in, the more you canpotentially win over the long haul. let's go to dave in california, please. dave. >> hey, jim, thanks for taking my call. >> of course. what's up, dave? >> jim, i'm an older retired investors moving most of my stock portfolio gains into t bonds and cds. what are the advantages of bond

ladders and how do those work? >> look, i think that what i like about a bond ladder is it would normally matter a great deal but the yield curve is so flat, i'm trying to think. people want bonds right now, it doesn't make a lot of sense. i want you to stay short. no reason to go out on the long end. i'm not sure of your age, but i want people to remember that i think you don't want to bet against yourself and put too many money in bonds. stocks represent the greatest opportunities, and don't forget utility stocks. they could have multiple years of goodness. >> philip. >> booyah, jim. >> what's up, phillip? >> i want to thank you. i have been listening to your show since 2006. one of my coworkers turned me on to the show and you have made me all sorts of mad money. >> fantastic. thank you for that.

>> i'm a member of the cnbc investment club so i enjoy listening to you as well. >> okay. my question is so i know that you have reinvestment, and i'm totally there with you. my specific question is should i invovl myself in the brokerage or put it back in a stock. >> i'm a huge dividend reinvestment person. as a matter of fact, i wish there weren't an alternative. i have to send the dividends out, and it's hurt my long-term performance. you have got to reinvest them. that's where big money can be made. one of the biggest things i learned from getting used to the stock market early is that it is a long-term contest. the earlier you get in, the more you can potentially win over the long haul. on "mad money," i'm giving you a look at where i got to where i

am today. the best practices i learned about the market and how you can incorporate the life lessons yourself. so stay with cramer. >> don't miss a second of "mad money," follow@jimcramer on x. have a question? tweet cramer, #madtweets. send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. >> thank you for everything you do. >> you have been a wonderful source of information with your teachings, thank you. >> thank you for saving us from ourselves. >> your advice let me quit a job i hated. i love you to death. >> thank you for everything you do. thanks for making us money, and more importantly, thanks for keeping us from losing money.

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welcome back to a bizarrely special "mad money." i'm teaching you life lessons in investing from my wife. i'm not a dollar sign represented by a man or a stock symbol for that matter, ticker jim. i have stumbled around the stock market to learn a thing or two. you are getting wisdom from the school of hard knocks that i have pass ld. don't you love it at the pro football game, they have the players say his name and the school, the school or hard knocks. that's what i attended, and you are get the made for tv version. for law school, i went to harvard though. we covered how i first got involved in the market, my fourth grade obsession of keeping a ledger for the stocks. not monopoly, but stocks and bonds with the little certificates and skate board,

and cards that would send the stock higher or lower. i love that game i. i left the stock market games behind when i got to middle school. my obsession became sports. i was the second fastest guy in the school forever. i ran track. girls who my teenage self found more mystifying than the market. maybe they still do. that's a subject of a different show. my father ingrained the desire to save money. i learned early in high school, i bussed tables at the block and cleaver, which we called the block and cleavage because we were funny and at the height of the adolescent humor. i worked as a vendor at the veteran stadium, selling ice cold soda. and then graduated into selling ice cream. hey, i got ice cream, vanilla and chocolate. i learned the value of market power, cornering the market and paid people to give me the exclusive right to sell ice cream on the 600 and then on the

700th level, which i owned by keeping everybody out of it. can you imagine how much money you could make with having the only franchise in the whole upper deck. even for a team as horrible as the phillies which won almost no games. they gave me strawberry ice cream, talk about having to run from a customer after you sold them that stuff. i got stuck with unsold ice cream. i had to buy it from the company before selling it. i take a beating whenever carl was on the mound. that's a business lesson. the shelf life of ice cream on a hot july night is about as short as short can be. during the lightning round, i might jest with you u by your name, chief, i learned these names at the ballpark. it's what people called me to get my attention. to buy ice cream. hey, chief, frankly, i loved it and its bizarre intimacy, and i never forgot the monikers. i made a ton of money, opened a

fund at fidelity, contributed a little bit every week. it was the top mutual fund of its time, "beeating the street, still on amazon, they are fabulous. the munches work study, and it went toward my tuition and room and board. when i got out of college and multiple attempts in the newspaper business, i was rejected by 57 papers. i hate everybody who rejected me. never mind, i landed a position as a general reporter, and then got caught making 150 bucks a week, which is not a lot to really boil it. i still have my tattered pay stub, got it in my wallet, to remind me how hard it was when i started. i saved. i put a few dollars away. i mean, like maybe $4. not that long after that, i applied and got a job at the examiner. that was a horrible job, paying $179 a week. and more expensive than

tallahassee. los angeles, i found this terrific bungalow apartment, pretty sketchy around the corner from pioneer chicken. which was too expensive. my place was broken into repeatedly, at the same time, i was assigned a story in san diego, a horrible shooting, and when i returned, everything was gone. everything. everything i had, including my checkbook, which of course was cleaned out. so it began. my terrible but thrilling six months of living in hi car, basically trying to get by. my goal was to save enough to get an apartment, i was living hand to mouth, and people would take me in now and then so i could get a shower. it's really important to get a shower or a good night's sleep, but you know what, i never quit saving. i remember cashing my paycheck every week and writing a check to ma jgellan fund.

saving on homeowners insurance, it was very expensive back then. needless to say it was unsustainable. when i came down with mono nucleus. i had no health care. the hbo had no branch where i was at the last station when the company mercilessly put me on the road, so i can submit expenses from day-to-day. i had to go to the market to get fixed up, and i still put money away, even then. i was making weekly trips to the doctor. it was one of the best i have had. but the upshot of investing is this is a challenge. the whole story is a challenge, and this is what it is. if i was living in my car and invested, i never want to hear that you didn't see. never. that's why i went through this. amazing. back then, i was giving money to the best stock picker of all time. fast forward 35 years later, and took advantage of the money, ultimately managed to a fund well into the six figures, not because of my additional

contributions, only just a few dollars a month, but away from capital appreciation and the powerful compounding. i never touched it, still have it. i just let it build. the i think the take away is i want you to save no matter what the execution. through thick and thin. when cnbc has the all star managers on, keep your ear open. the time to own a stock portfolio, send the money in, as little money as you can to an index fund, to one of these big mutual funds. if you need help with your own portfolio, join the investing club. if i could still send the checks to fidelity when i was living in the car sleeping in the back, jack daniels and a hatch et cetera, a pistol, sick as a dog, then what's your excuse for not getting started. you can put some money away too. that's the way i was living. "mad money" back after this. coming up, take a trip down memory lane. the hair is gone but the wisdom

tolls on. stick with cramer.

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what an impossible shot brought to you by comcast business. we're find ago magical money mystery court. the life lessons i have learned the hard way. i want to tell you how i got started in individual stock picking. even after multiple periods of pain, chaos, you believe too or you wouldn't be watching. if you're picking stocks, playing with real money, not just the ledger of the game of stocks and bonds. you need to open an account. when i got started in 1979, there was no such thing as an online account. i chose to put my individual stock account there too. when i first began, i didn't know where to look for ideas. i turned to forbes. please don't take this

personally. i read a nifty article about a terrific orange grower in florida. and i bought ten shares for nine bucks. frost tip, wiped out the crop and my investment was cut in half. like the plot of trading places. what can i say. pretty similar. i was devastated but not defeated. i sold it out, took the capital and bought bob by brooks. almost immediately, reported my quarter. i had a decent job at a magazine, making 20 gs, and a studio. cheap $40 a month rent allowed me to replenish my stock pretty quickly. i was on the road quite a bit back then. after a hard night on the town researching a story in kentucky, i fell in love with the breakfast at bob evans farm. finding out it was publicly traded, i visited the manhattan

public library and devowed everything about bob evans. write ups that allowed me to compare bob evans with other companies in the industry which is what you have to do. i knew i had a good one. i bought 20 shares. stock went up immediately, a good quarter, and i found out the first part of investing. women's fashion, certainly not me, but a good play is sauces after a hard night on the town. an attractive setting, big plan to expand in the midwest, that was for me. sps technologies, my old hometown that made fasteners, crew screws. i already had a job but back to the library for more research. solid company, no doubt. nothing about its hiring push.

sps doubled not long after and i caught the bug for good. 20 years later it would be acquired by aircraft carriers around the globe. so now i'm figuring it out, the best investment ideas come from what you know, information gleaned from public sources. even if it's hard surreptitious didn't like the random moway i s making money. i figured that would be a rigorous approach. look around at work, stupid. at the time i was covering mergers and acquisitions. looking at the lawyers who do the deals, profiling some. following the deals they were on. it seemed like every other deal was in the oil patch. oil companies were being acquired and i was standing around writing about them. i went back to the library for value line. stock research magazine and check out the pages devoted to oil companies. i cross referenced with other

research, find out which could be acquired without problems, they were publicly traded without a family owning them or seem to fit the size, the parameters of other deals. i set all of this, and an oil company with a gusher in ind n indonesia. i didn't have long to wait. almost doubled my money. buy companies that would do well on their own. it was under managed, which was the consensus i found about reading about oil companies. another company at a bigger scale, as much as i hit winners, i gave the ghost in the first few trades. at the time i had been hanging around the track on the weekends and i learned how to handicap by reading books of andy buyer, legendary horse racing writer. even betting on the ponies, it teach discipline, how to identify the best thorough breds

to bet on. the long shots, being to the tracks. information less well known. not betting willy nilly on every horse. find the ones that the payoff is more sure and bet beg. you can take a swim when you know what you're doing, particularly when others don't want a less well known stock out of the way track. don't scam on stocks for the excitement of it. be disciplined, don't let your losses pile up. i decided to hang it up and go to law school. i saved enough money to cover the first year. here's the bottom line. you want to get started, invest what you know, research it intensely. research, research, research, i got old data from the public library. now it's a key stroke and the information is free. analyst, and of course the conference calls that are musts if you want to know what you're doing. simple no. lucrative, you bet it is.

michael in california. >> yes, jim, first of all, thanks for taking my call. >> of course. >> i'll try to make this as quick as possible. i know you have a lot of people to help here. this has to concern my two children. i inherited recently, a quite a deal of money, not a million dollars but a substantial amount, and i'm looking at a 20 to 30-year time frame here. i have been investing for them since the day they were born. they're doing all right but i want to leave them so good money. i'm thinking on the lines of berkshire b, and this is putting all of this money. berkshire b and etf, vanguard etf, somewhere along those lines, what do you think? >> i think that s&p 500 fund and the total return funds are both good for that kind of situation. vanguard is total return. one thing i would caution, as much as i like warren buffett, you have to have kind of a

basket if you do one stock, but if you do the ones that i just mentioned, you don't need a basket, and don't have to keep track every minute. if they're young enough, maybe give them something they want to spend time learning about, that could be good too to keep them invested and interesting this their money. thank you for the kind questions. let's go to loil in arkansas. >> yes, how you doing, mr. cramer? >> i'm doing well, how about you. >> i'm doing all right. i just wanted to know, getting back to the market with 11 k, what's the best way to have a long-term goal but short-term return on a year or two on your investments? >> you know, it's too risky, frankly. at one time or another, i think in my earlier years, i would have suggested call options and then also some longer term stocks and mutual funds but these days, i'm just against the short-term stuff.

i can't deliver and i don't want to encourage trading. but thank you so much. i wish i could do better for you, but it's just not my thing. trading thing is not my thing. if you want to get started in stocks, go small, invest in what you know, and research intensely. the process may not be simple but boy it can be lucrative. much more "mad money," including an inside look at my team at goldman sachs, and taking your investment questions with my colleague, so stay with cramer. coming up, how has investing changed since cramer's hedge fund days? we count the ways, and the answer may surprise you next.

[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] ♪ ♪

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tonight's show is all about you learning from my attendance at the university of financial hard knocks with a major investment. i have taken you through the importance of getting started early, saving no matter what. i have shown you how to spot winners, avoid losers, all through looking at my actual examples in my life. now i want to give you a sense of how you can become a trader. u uh-oh, here we go. a good trader, and i don't normally recommend this.

it's not the direction i like to take the show. "mad money" has changed time and again. and trading ideas toward long-term investing. there's so many more obstacles to trading than investing these days. you have to walk positions like a hawk. to the point where it's hard to do your job. there's so many people with a great set of tools and the ability to access information realtime. there's products that allow hedge funds to move around, toys, it's hard to compete against them. you can't do the one on one, especially when you're doing it part time. now that you didn't, when i started trading, my law school back in 1981. first commissions are nonexistent, your broker doesn't need to take a fee. second, the information you need is on your personal computer or ceremony. back in the day, i had to call br brokers and watch the tickers on fnm. i didn't know a price i paid for

a stock or when i bought it. when i was in class, i had to use pay phones. you often had to wait on one pay phone while a kid chatted endlessly to a girlfriend. maybe some called home to mom. i had to go with what i knew. i knew individual stocks. for all the stories about harvard law school, i can tell you there was tons of down time at law school and a terrific business school library that had a lot of south side research. that's the stuff brokers, and micro, they miniatureized everything to a little piece of film and you had to read it through a machine that was a glorified micro slope. the best publicly available information at the time for a student that you get in the early '80s. the first thing i decided to do given the circumstances work on one trade a week. i couldn't take a lot of chances until i really knew what i was

doing, a valuable lesson. i discarded ideas looking for catalysts, upcoming reports or mergers. stock could rally based on other parts of the newspaper, an article on the front page might be talking about medicine. a new oil fund. i got on a role. i started first writing about the market, a news letter called mr. bullish. no one else cared about what i thought, and i did not trade if i couldn't explain exactly what the company did, and why i liked it, and what would happen to the stock, what was the catalyst. don't buy anything that didn't have a clear exit strategy from the moment i put the trade on. important lesson. made discipline by the insistence of written pieces before i pulled the trigger. when you trade, you've got to trade with confidence. otherwise you can easily be shaken out by the broader market. you want to trade with confidence, ask yourself, would you be willing to put a stock recommendation on your voice mail. yeah, we used to have those and update it every week.

at that point, it was a quarter. it was something like this for me. hi, this is jim ycramer, i'm no here right now. that's the level of conviction i had about my picks of the week. i put my money where my mouth was. old employer, american lawyer and some legal work for a professor who moonlighted doing these criminal defense cases. kind of a famous guy. we won't go into that. it wasn't long, at that point, the publisher for the new republic. i neglected to call him back. successful, and he told me to meet him in a coffee house nearby. when i did, he said that he made more money from my answering machine, and he wanted to give me a half million dollars to manage. i didn't think i was capable of handling that on my own. he said he had confidence in me, and when we're having a cup of

coffee, we pulled out a check for a half million bucks. i went to work trading. almost immediately, i lost a ton of it, i could see how i might have to wash dishes, mow his lawn for a hundred years. make back the 70 gs, my mistake, got to know his own limitations. you can't trade a huge chunk of money. all my weekly discipline. can't put it to work at once. had to do -- you could only do that after a huge amount of work. you have to have a chance to pan out an entry point, come up with a reasonable entry point and exit. you have to know how to trade, and i didn't, and i violated my own rules and blew it. i confessed to marty, please take the money back. instead he wanted me to have more money, betting that i learned my lesson. he was right. i reverted to my old style,

trying to be right about one idea at a time, good big. i slowly but surely made it back, and invested a more active but not truly trading portfolio to get a better feel of things. that would become the beginning of my investing career, and we made a huge amount of money in that. here's the bottom line. if you're trying to trade, make sure you have a catalyst, an exit point where something is supposed to happen and get out of the stock, even if the idea doesn't pan out. you're trading, not investing. you need conviction, and you have to ask yourself, would you be willing for the world to hear, hi, it's me. i'm not here right now. i want you to take a big swing at disney, ahead of the analyst meeting. start small. give it a try. "mad money" is back. >> booyah gjim, booyah jimmy

chill. >> booyah jim. >> quadruple, that's a lot of boo yas. so this is pickleball? it's basically tennis for babies, but for adults. it should be called wiffle tennis. pickle! yeah, aw! whoo! ♪♪ these guys are intense. we got nothing to worry about. 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. okay, team! oh, thank you so much i couldn't have done it without you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet,

it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot tamra, izzy and emma... they respond to emails with phone-calls... and they don't "circle back" they're already there. they wear business sneakers and pad their keyboards with something that makes their clickety- clacking... clickety-clackier. but no one loves logistics as much as they do. you need tamra, izzy and emma. they need a retirement plan. work with principal so we can help you with a retirement and benefits plan that's right for your team. let our expertise round out yours.

[ inner monologue ] i needed some help. and benefits plan good thing i knew someone... ♪ ♪ or... some-thing.

[ a.i. copilot ] glad you called, j. [ a.i. copilot ] it's time for an upgrade. awesome. ♪ ♪ [ inner monologue ] i knew what i had to do. because they never stop. no time to waste. this isn't sci-fi. this is precision ai. ♪ ♪ welcome back to the special edition of "mad money" where i have been teaching you life lessons investing from my life. now we're up to the professional grade when i started at goldman sachs, i have been courted by goldman for three years before i got a job in what was then the security sales department, helping individuals with money.

i got a ton of this history for those years, and if you want to know more about it, i suggest you read confessions of a street addict. my autobiography. i'll dispense with the anecdotes and try to teach you how to make money for the events that transpired during my time at goldman. i began understanding the process of money managementment the ability to build the portfolio from the ground up. i had the best teachers in the world. one of the hedge fund managers was the research director and put on investment clinics daily. you know who i learned the most from in my customers. individuals from all walks of life. at goldman, i learned something to this day can't be understood by profgessionals in the business. i have what's known as nondiscretionary accounts, being that i wasn't allowed to invest money with my own ideas unless i could win them over to make the purchase. i was on commission, and made

money with the buys or sells i could convince people to act on. that's where i learned how important it was to talk over a story with an individual to be able to articulate in a way that made sense. can you do that to someone when you're picking a stock. you had to know your stuff. whether they knew enough about the stocks that they wanted to buy. i wanted them to be as educated as possible too. that's because i knew if the stock went up, it would be their idea, if it went down, it would be mine. that's human nature. what else did i learn. how about humility. it was at goldman sachs, i understood how humbling it could be. almost all stocks had tremendous tail winds, when one of your cds went against you, you had to get on the horn and explain either why the person should buy more or why they should cut their losses. i also learned to let your gauge run while you cut those losses. i learned the hard way, many of my clients were perfect business people who didn't know that much

about stocks. they just have been fabulous at running their own enterprises, a real cantankerous client, who i worked hard to get, trying to win them over for ages. i told them i'd be judicious, work hard and get it right for them. he didn't want trades, he wanted long-term investments, at the time, i happened to like the stock of kimberly clark. i told them this woman would be a terrific addition to this portfolio. i bought 1,000 shares. the stock went up 8 points, i had a winner. i called and said i want to sell the 1,000 shares to kimberly clark. i thought he would thank me. he was furious. he told me that i had said kimberly would be a good long-term position that it could have great gains over time and he wasn't the least bit interested in only making $8,000. then he questioned my integrity, and wanted to know if i was churning him, a horrible charge, meaning i was trying to generate commission off his account. i was scorched, i was burned. but it taught me a terrific

lesson. just as you don't want to turn a trade into an investment, that's a sign you're embracing a loss, and trying to invent reasons to stick with it, you don't want to turn an investment into a trade. when you have a good one, let it run forever, bob was right, doubled. i was vindicated despite myself. i learned the science behind building a portfolio, and understanding how to create long-term wealth. a lot of my business involved contacting people who just came into a great deal of cash, through inheritance of the sale of a business. i regarded my first job as listening to the needs, trying to figure out what they wanted, were they conservative, did they want capital appreciation. i tried to get to know them and urged them to get to know themselves just as you should know yourself. can you handle the pain of a market decline? would you prefer your money to appreciate slowly, most from fixed income, from bonds or dividends. do you want to punish in new issues, do you want to try to hit it out of the park with some of your capital. many of you are familiar with

these lessons, i know that. you have heard me say them time and again on air, preaching them constantly to the cnbc investment club. i try to teach you how to know yourself, to though what you can handle and what you can't. this is when i learned the value of diversification. when i first got to goldman sachs, the oils were hot as a pistol. you understand those were different days. you're going to have an oil company's double and double in a short time. we struck oil. how big those fines must be. everyone got caught up in the oils. the families i work for wanted oils. i wanted oils. every day seemed like a great day in the oil patch. services, drillers, you name it. then one day, oil plummeted. the saudis started pumping. global tensions and jacked up the prices were settled. next thing you know, the bull m mo morphed into a bear. those that owe nothing but oil strokes, i learned the concept

of diversification. i valentine's daylated some of my rules. i never intentionally avoided diversification. from my early days at goldman sachs, i learned the core principles of investing. finding solid ideas to create long-term wealth in a way that suits the customer. consider yourself the customer of this show. stick with cramer. coming up, wall street's most reliable tag team squares off to answer your questions. keep in touch. "mad money" will be right back. meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real. >> i had 20 years of experience as an hr professional and i had reached a ceiling, so i enrolled in umgc. i would not be the person that i am today had it not been for the partnership with umgc. -unnecessary action hero ... the nemesis. i would not be the person that i am today had it not been -it appears that despite my sinister

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through this entire show tonight, you have heard me pound the table on how investing in the stock market is a long-term contest. emphasis long-term. you're never too young to start investing. i love to teach my viewers and also learn from them, which is why i always say my favorite part of the show is asking questions directly from you.

tonight i have jeff marks here, partner in crime with the cnbc investing club. we're going to answer your burning questions which are always amazing, frankly, i learn so much and give you an inside look at what you do in the club. if you're not a member of the club, scan the code behind me or go to cnbc.com/investingclub to sign up. i sure hope you will. let's take our first question. first up we have a question from sandy who asks, my husband and i are at retirement age. he likes dividend stocks, i don't like holding them when they lose value. i prefer solid growth stocks to continue to build our portfolio. keep or sell these losers? i'm going to start by telling you right here. retirement age. okay. that's the eye of the beholder. i have been a big believer, contrary to the entire industry, in saying there may not be a retirement age when it comes to stocks. i think that people should always be investing for growth and some for dividend, and then some for bonds. so my answer to this one is that

you have to kind of at times take the risk, but you just use smaller amounts of your account. >> there's always a balance to everything, right. one thing i would point out is that without knowing the stock if the dividend investment is in the red, well, maybe they're not growing their cash flow, their earnings, maybe they're not growing their dividends, and that could be a red flag. >> you know we got involved with foot locker and their cash flow declined in what looked like a good dividend stock became a nondividend stock. sandy, unfortunately you have to do a level of homework. of course join the club, and we will point them out. you're going to miss things. but what matters is i want you to have more exposure to the stocks that people expect because retirement age may be something that turns out to be 20 years before you -- well, you need to grow capital for that 20 years. next up is bruce, and he's in

michigan, and 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. >> look, i think it's an art and a science, right? there's no one standard rule of thumb to apply, but what i will say, though, when looking for price targets, what you can do is look at some historical multiples of where stocks trade at and try and figure out how much you think the stock will earn out in the future and apply that. but another key consideration, too, is that if the company is improving its margins, taking its share, it would deserve to trade at a premium versus this historical levels or maybe at least catch up, so to speak, the multiple rate closer to peers. >> during the great runs that were lily and nvidia, how did you go about setting. . >> those were the great momentum stocks of the last couple of years. that i would say is a little bit of an arc. stocks like that, you have to look years out in advance, so especially in the case of eli

lilly where it's more towards the end of the decade is where glp-1. >> so people know, we take them very seriously. okay. now let's go to lindsay in oregon where my daughter had her formative years. do you sell shares with the lowest cost basis or highest cost basis? this is an accounting issue. there are rules on what you can and what you can't do. we are, just so people know, we send everything out, all of our capital gains out, and all of our dividends out, and we often want to try to get rid of the ones that has the worst basis, that's been our kind of stock in trade. >> look, this is always a question of tax considerations, right, because if you're taking your profit and you're sell ago lower tax basis, you'll trigger a higher realized gain and on the other hand, if it's for a loss and you sell that lower basis, it's a smaller loss.

it's tax considerations. >> just so you know, my accountant says, jim, just take it as they come, last in first out. why is that, don't ever get in trouble. there's my lesson for the irs and you. i'd like to say there's always a bull market somewhere. promise to try to find it just for you right here on "mad money." i'm more coverage picks up right now. tonight's state of emergency, americans grappling with a deadly tropical storm, dangerous heat, and reaching wildfires. millions along the texas coast remain on high alert as alberto batters mexico leaving several dead. further east, a relentless heatwave smothering 80 million people