the last word from the options pits. scott? >> if you have monday off, remember why. >> brian? >> tesoro. i bought calls today. >> mike? >> sell puts in dish. >> have a fantastic weekend, everybody. . 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"ment welcome to cramerica. other people make friends, i'm just trying to make a little money. my job is not just to entertain you, but teach, that's what i'm doing tonight. call me, 1-800-743-cnbc. there are some things i'm keeping from you. tonight i'm going to do something about it. tonight i'm going to tell you

who i am and how i got here. no, not i am jim cramer, founder of "the street.com. that plus an av tar and 2,300 character sums up everyone these days. i want you to know more than that. it did take me two years to know av tar wasn't a movie. what i want to do is show you by my own whacky standards is trace the arc that brought me to "mad money." not sore tom auto biographical ego trip. i do that all the time. to give us money lessons from my various careers and how you can profit from them. remember, in the end, this is cramerica! [ music playing ] in short, i am going to give you the invest-a-cramer guidebook the skinny on how i continue to learn every day so i can help you become better than i have ever been and will be. that is the goal of "mad money."

let's start early. my love of stocks didn't begin after high school or college. my love for stocks started back in 4th grade. that's right. see, my dad would bring home the philadelphian bulletin. at that point one of the largest newspapers in the country. a great afternoon paper. that's when they returned home from work every night. i was a ridiculous phillies fan back then. if i can go back in time, i would have made it so i was a yankee fan. no one would ever fill you up with a team that has the most amount of losses in all of proernl sports history. i was curious to know. curiosity has been a blessing and a curse of mine. not that of a cat, probing, looking, jump on a couple of hot stoves. anyway, there was this solid chunk of the paper that seems impenetrable. it was impenetrable because the names seemed to go on forever. they were the other tables, different from the batting

average tables and box scores i would scrutinize with regularity. they made no sen at all. open range, closed. what opened? what range? what closed? what are these strange things? why did they matter? i asked my dad that dabbled in the stockmarket. on occasions he would get mad on things mentioned on the radio. in particular, he got angry when i heard something called national video. and how national video went out. i didn't know what national video did ority went out. i didn't now if it popped it, either. i know it made him furious. it made him react with such fury some he sat me down, explained each of these lines represented the performance of the stock. different day, each day. the open when the stobl opened up in the morning. the range was how high and the close was how much it was worth when trading finished at the closing bell. it fascinated me.

how could there be so many companies and why the heck did they trade in ranges and what did it mean to close? he described to me that people tried very hard to figure out each day which stock would go up at the close and wanted to buy them so they could make.from that increase during the range from the open to the close. frankly this struck me as downright silly. i told him when i looked at the baseball tables, i was always trying to figure out who was hot, who would go up in average, who would go down, what it would mean for the teams i liked, specifically the phillies. he said it was stocks. you studied the companies like the players him some of the players were doing okay. some were as hot as a pistol. some were duds. i said i wanted to figure out which ones would go higher. i wanted to know if i can learn something following the ranges reading the tables. he said, why don't you try? it seemed in my house the radio was always on until pop put the tv on the time for dinner. we always us watched the news in

time for anothering. most of the news was for war, the war in vietnam. it was frightful, scary and real in life. even when i was 9-years-old, my mom worried i had to go to vietnam. fortunately, the war was wiengd down when i got my draft number and it was a high one. so i was spared from the conflict. after the news, they mentioned the dow jones industrial average and they either talked or showed the most active stocks. and then the ones that had done the best to the worst. national video was often on the worst list, i discovered. hence, the anger. so what i did was write the names down that i heard and i tracked nem. i kept them in, believe it or not, this ledger, that i still have. here it is. what a terrific game. i was trying to figure out the next move of the stock. even as all i knew was the fame, polaroid, xerox, national video. sin tex, pan am, united. oh, most of them were defense

stocks. they went up a lot, in tandem with the war. hey, so i not a lot of those. a bunch of others. look at that. conair, eastern, yeah, national rca, admiral. after a year, i decided this was about as cool a game as imaginable. i wanted to introduce it to my 5th grade class. i did a show and tell, showing my ledger. inviting everyone to play so see who could find the most stocks that went up in the week. i have to admit, everyone was not interested as i was. not long after, my dad's company, represented the 3m corporation. then the minnesota mining manufacturing company in the philadelphia area selling tape and sashine, a fancy ribbon that bowed easily. they talking about stath satin ribbon. sashine, triple m as we called it was coming up with a new product lean. which is why i favored it. you should, too, pop came home

with a new line he was selling, they got into 3m book shelf games. he said perhaps i might want to learn more about how the smashing really worked. and the company had created two games about business. acquire about takeovers, which had all been the rage at the time and because the conglomerate age and stocks and bonds of which i am fortunate enough to have got an copy right here, courtesy of gorge menesis, who was producing "mad money" who gave it to me for the holidays. i almost cried when he gave it to me. i subsequently asked the ceo to bring the games back. apparently, i don't own the rights anymore. the point of all this from my stock games from stocks and bonds, which george bought off ebay is the stocks are fascinating enough to get your kids involved right now. it's easier than ever. pick some stocks. they are performing in an odd way winding down in different

wars. companies that are familiar to your kids, have them track them. guess which will do better over time, not the city transport. not the growth corporation of america. not the pineer mutual fund, not the central city municipal bonds, stocks that are real. here's the bottom line of my childhood stockmarket obsession. get started early. and then they play for life. because the last of the stockmarket's a long-term contest and one i think the earlier you get in, the more you can win. i'm going to mickey in new york. mickey! >> caller: hey, jim. i want to thank you for all you do. i have been investing since i was quite young. i was wondering what kind of changes should i make as i get older? >> i tell you what, it's a generational thing, if you are 50, push 50% bond, 60s, 60% bonds. no more. find conservative stocks that

give you good yeechld shift over time to the national partnerships. then i think you will be able to do well. rick in arizona. rick. >> caller: hello, mr. cramer, how are you? >> really good. how are you? >> caller: i am doing great. watching your show a couple woox ago, you mentioned your bucket list and attending the indy 500. i have a buck list and things i want to do, places i want to visit during my retirement. because of following your advice this last four years, i am well on my way of being able to do those things. >> that's fabulous. >> thank you so much. my question i have for you is i have a couple of young. i'm trying to get them started in investing. the question i have is, what advice and what are the most essential items or ideas on investing concepts to people need to know when they start learning about the market and investing in themselves. >> the first thing they need to snow what they own. the idea is to own things like

disney, i tell people start with disney, domino's, mcdonald's, if you like mcdonald's. go to the mall. go to cost co. go to places are you familiar w. read the annual. buy share, one share, get him or her involved. get them started early. teach your kids about the market. it is a very valuable lessson and there are many more coming up on this special edition of "mad money." we'll be right back. .

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money," i'm trying to teach you life lessons from my wife. while i am not a symbol, or a techer, i have stumbled in life to learn a thing or two. tonight you are getting some of that wisdom from the school of hard knoxs, don't you like at the beginning of the football game, some say the school of hard knocks? well, that's what i attend when it comes to stocks. you are getting the on tv version right here right now. when i first got involved, my 4th grade obsession with keeping a ledger to track stocks and then ultimately to learn how they trade through the greatest game on earth? no, it wasn't monopoly. it was stocks and bonds. but with its little certificates and its game boards and its cards, that was about news, tell us about news and how that would send a stock higher or lower. that's what this was all about. now i left the stockmarket games

behind me by the time i got to middle school. which by the way, they don't call junior high. my obsession became sports. i was the second fastest guy if school for ages, of course. then girls can leave you more elusive than this stuff. they were more elusive than the ranges of stock. that was a walk down springfield, main street. i couldn't win for losing. that was a different showing. early on, i learned even in high school, you got to save. i saved as a bussed tables at the old block and clear. we called it block and cleavage. we were hilariously stupid. that's what we did. 16tally, as a vendor at veteran stadium i sold hey, ice cold soda and ultimately graduated into selling ice cream. very quickly at that job, i learned the value of market

power, specifically cornering the market. and i paid people to give me the exclusive right to sell ice cream, hey, ice cream, vanilla and chocolate on the 600 and 700 level of the vet stadium. can you imagine how much you made? even as horrible as the phillies by then. by paying those guys not to sell ice cream against me, i made fortunes, except the time i sold strawberry, or when lefty was on the found mound, i would get stuck with unsold ice cream. you had to buy it from the company before you sell i. i would take a genuine beating. talk about learning how business worked. the shelf life of ice cream on a hot july night is about as short as short can be in july. i might gest with you about your name. hey, chief, skip, captain. i learned these names at the

ballpark. it's what people called me to get my attention for ice cream. i loved the bizarre false intimacy. i never forgot the monnicers. i opened a fidelity with the magellan fund and contributed a little every week. it was the top mutual fund at the time. i met peter lynch. he had one up in wall street an beating the street, which remain two of the best investment took books of all time. i tell them to goat say i want to learn nmore about the stockmarket. it went towards my tuition and room and board. when i got out of college and after a lot of attempts to get a job in the newspaper be rejected, by the way, by more than vest papers, i have every single rejection letter in the trunk. i landed a general assignment report, making $156 a month. i keep the tabs to remind me how hard it was when i got started

and how poor poor i was. nevertheless, poor, $156. i contributed even then. i put a few dollars away within i could. not long after i applied and got a job at the now defunct herald examiner. i was making $179 a week. it was in the town four times as expensive as living in tallahassee. i found a bungled apartment in the fairfax district it was sketchy back then. 1819 orange grove around pioneer chicken, which was way too expensive for me to go to. a few weeks later i was stopped and broken into repeatedly. at the time i was assigned if san diego, a horrible school shooting. when i returned, everything was gone, everything, everything i had. so it began. my terrible but thrilling six months of living in my car, basically, trying to get by. the only real upside when you met him, might have met a woman. it was easy to figure out the

inevitable end of a night query, your place or mine? now, i know this isn't your normal behavior. as much as i knew my ultimate goal was to save for an apartment. i was living hand in mouth. people would take me in to get a shower, change, get a good fight's sleep. i never quit saving. i remember cashing my paycheck to the fidelity magellan fun. you only have your gasoline, car insurance, food expense if you are in your car, homeowner's insurance, car, wow, how poor was i at putting money away. i had mononucleosis, i had no healthcare t. company mersfully put me on the road to submit some expenses for my day to day. i had to go to pike grant farmer's clinic.

i put away money, even though i made the weekly trips to the doctor, who was the best doctor i had. amazingly, giving money to the best stock pecker of all time, i managed through the years, 35 years later to put enough money away to take advantage of the great bull marks of our time. not to brag, but to teach. that money ultimately amounted to a fund well into the six figures. not because of my capital additions. i stopped putting money away in that fun years ago, but because of the power of compounding with an amazing investor at the helm. i never touched i. i let it build. i want you to save no matter what. obviously, the earlier the better, through thick and thin. listen, when cnbc has those all star managers on, you don't have enough money to handle your stock portfolio. it can buy one or two stocks. send the money in, as little or as much as you can. here's the real bottom lean. if i can send those checks to the magellan fund living in my

car, kept warm by a bottle of jack, safe by a pistol by my side, the most down and out you can be in this great country. you can make money, too. after the break, i'll try to make you more money. ♪ [ engine revs ] ♪ [ male announcer ] just when you thought you had experienced performance, a new ride comes along and changes everything. ♪ the 2013 lexus gs, with a dynamically tuned suspension

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dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. the act of soaring across an ocean in a three-hundred-ton rocket doesn't raise as much as an eyebrow for these veterans of the sky. however, seeing this little beauty over international waters is enough to bring a traveler to tears. we're putting the wonder back into air travel, one innovation at a time. the new american is arriving. >> we're riding the mystical life lessons i learned the hard way, through decades of stock

investing. i told you first how to get your kids started early. i told you how nothing should stop you from investing. listen, if i can do it living in a 1977 ford fairmont, you can put money away, too. i got involved in individual stock picking, something you know i still love an believe in, even after unseemingly chi canary and chaos. it is wild, if not lucrative. yes is the reason i believe you watch. certainly your inclination. that isn't like the funny outfits and the outrageous sound board courtesy of within i used to have a radio show similar to "mad money." buy, buy, buy, sell, sell, sell, called "real money." if you were picking stocks with real money not just with a ledger, or with a 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 money in an individual stock account there. when i first started, i didn't know where to look for ideas, so i turned to forbes. people at forbes, do not take this personally. i read an article about american agronomics. i bought 10 shares for $9. a week later a frost hit and wiped out the whole crop. my investment was more than cut in half. i was completely devastated. >> the house of pain! >> but not defeated. i sold it out, took the capital. you know what i did? i went back to forbe, i bought 7 shares of bobby brooks. an outfit i never heard of. forbes said it could be a terrific buy. almost my money was halved again. fortunately, i had a decent job which had just been started. i was making 20gs living in a

less than swank studio. the cheap $40 a month rent with a sofa bed albeit the rent in tallahassee an more than the back seat of a car will allow me to replenish my coiffeurs. i was on the road quite a bit back then. i fell in love with the breakfast at bob evan's farm. finding out it was publicly traded when i went back home, i visited the huge, fabulous mid-town manhattan public conglomerate and devoured everything i could about bob evan's farm. they had articles, microphish and investment publications with write-ups that allowed me to compare bobe with other companies in the industry. i knew i had a good one. i bought 20 shares. it grew up. the stock split. know what you own. like it even. what did i know about growing oranges? who knew about women's fashion?

but a god plate of scrambled sausages served in an attractive setting with a nice waitress, a company that i found had a long tradition and good service and expanding to the mid-west. that was for me. next up, standard press steel. wow, that became sps technologies. it was the old stanley press steel from my own hometown. they made fastensers, for airplanes. a buddy told me they were hiring like mad, wondered if i wanted a good job paying good money. i had a good job. st technology, solid company, no debt. but nothing in print about its hiring push. hmm, right for a trade, right? no one had that skinny? it doubled long a. by that point, i bought the bug for today. the aircraft builders around the globe, one i like and have liked

for many years, a quality company. now i'm figuring it out, right the best investment ideas come from what you know melded or gleaned from public sources even if they are as late or hard to source as taking a trip to the new york public library when i was supposed to be working. i didn't like the random way i was making money. a friend from friend's lucky homes, random. a hearty breakfast at bob evan's farms. i was thinking, there must be a more methodical way, right? thint hit me, look around at work. at the time i was covering mergers and acquisitions, following the deals they were on. it seemed like every other deal was in the oil patch. up with after another after other, small tore mid--size oil companies were being acquired, buy, buy, buy. all i was doing was standing about writing about them. so i went back to the library, took out some editions of value

line. i cross-referenced them with other research to fine out which one could by a kwierd without problems, either because they were public, without a family owning them or they seemed to fit the size of parameterers with so many other deems i was writing about. so i settled on -- tovus. another lesson learned. if you want to buy companies that are owned or undermanaged the consensus i found. that meant a another company can do more than natomas. as much as i had hit some winners, i was distraught i had given up ghosts in the first two trades. at the time i had been hanging around the track, yeah, the track on weekends. mostly aqueduct. near boy. i learned how to handicap by

reading the books by a book by andy bier, picking winners. in my first season, they may be the best books i mentioned earlier. they teach discipline, how to identify the best thoroughbreds, going to out of the way tracks where information was less well known. not betting nilly willie on each horse. find a payoff more sure and bet big, cut your losses if you are having a bad run. every one of these lessons can be applied to the stockmarket. you can take a huge swing when you know what you are doing, particularly when others don't on a less well known stock. don't just gamble on stocks for the excitement and fun of it. most important, be disciplined. don't let your losses pile up. after five years of professional journalism, i decided to hang it up and go back to law school. the good news, i saved up enough. i never would have made enough had i kept the same scale. an index fund would have made me nothing, well, nothing at all.

here's the bottom lines, you want to get started, invest small. invest in what you know. research it intensely, back then i got old data, now it's a key stroke. the information is free and up to the minute analyst presentations and broker annual research and of course the conference calls i tell are you a mus if you are going to know what you are doing. simple? no. lucrative? you bet it is. frank in arizona, frank. >> caller: jim, whenever i'm considering buying or selling a stock, i look at the bid price the ask price. sometimes that price range is nar row, sometimes it's wide. how is that information used in determining if it's time to pull the trigger? >> well, look, if you like the stock, i'm going to tell you that's irrelevant. what really matters is because if you want to hold the stock for a while, you just have to hold it and forget about that spread. most of them are tighter. remember, i used to buy spreads by stocks, we used to say they can drive a stock through them. things are much easier now,

don't worry about the spread. .

tonight's show is all about you learning from my attendance at the university of financial hard knocks with a major in investing. i have taken you through the reports of getting started early and saving no matter what. i showed you how to spot winners and avoid losers all through looking at actual examples in my life. now i'm going to give you a sense of how you can become a trader if you want to and be a good one at that. hey, you know what, "mad money" has changed time and time again over the years. it's been on for so long. and i deliberately skewed it in the last 500 and some odd shows away from trading. much more oriented in investing, longer term investing. there are so many obstacles in investing. you have to watch your position to the point where it's hard to do. you can't do your job at the same time and follow the mark. there are so many people assessing the information in real time. there are so many different products that allow hedge funds

to move stocks around like toys. you are really going one on one with the big boys if you attempt to trade at home or work. it's almost a sucker's game. but there's some advantages that you have now that you sure didn't have when i started trading in my law school dorm back in '81. first, commissions are so, so much lower. so you can get in, get out without much frux after commission profit. that's why i'm not worried about the spreads as i said earlier. second, the information is what you need on a personal computer, even your smart phone. i have to call brokers all day to see the precursor to cnbc. back then, i didn't know what stock i got my price when i bought it. when i was at class, i had these cell phones. you waited while some kid chatted aimlessly to some girlfriend or some woman was calling her mom. baby, you're on the dorm phone. at the same time, though, i had to go with what i knew.

i knew the individual stocks about harvard law and i can tell you that there was a tonne of downtime and a real good business school across the river at southside research, the stuff that brokers churned out as well as up to date microphish, those plastic things, all things considered, i possessed the best publicly available information around at that time. the first thing i decided to do, though, given the circumstances was to work on finding one trading idea per week. you can't be all over the map if are you doing this as a hobby. i fixed i couldn't take a lot of chances until i knew what i was doing. that's a valuable lesson for you if you want to start trading. i discarded a tonne of ideas looking for stocks that had catalysts, upcoming reports, possible mergers, stocks that could rally based on other parts of the paper. an article in the front page of the new york times might be talking about some break through in said sin. i got on a role. i started my first writing about

the market. yeah, i wrote a news letter "mr. bullish." i mailed it to my parents once a week. i used to type on my old little lippic type writing, olimpia, i don't know. i wouldn't do good if i didn't know why i liked it. i had that level of discipline. no buying of anything that didn't have an exit strategy. i had to have an exit strategy from the moment i put the trade on. again, an important lesson made discipline by the insistence of a written thesis before i pulled the trigger. when you trade, you must trade with confidence. none of this scared stuff. you could easily be shaken out by the broader market if you afternoon. you want a trader confidence, ask yourself, would you be willing to put a stock recommendation on your voice mail and update it every week?

hi, this is jim cramer, i like monolith at the end of the next quarter? darn it. i did that, too. i had that level of conviction about my pick of the week, which is incredibly important to the possess. i managed to augment the winnings with work i was able to get from my old employer. with some legal work from a professor who moonlighted during criminal defense cases. it wasn't before long that at that point a publisher from the new york public magazine tried to get me to write a piece. i neglected to call him back. he got three weeks worth of trades off that answering machine. he told me to meet him at a coffeehouse nearby. he said he made more money with my answering machine and wanted to give me a a million to advantage. i said i wasn't capable of managing that. he said he had confidence in me. shortly thereafter, after i gave him a tuck of war, he did give me a check for a half a million dollars. by the way, that was real money back there. i had it in my hands, i was

like, whoa, it was too hot to touch. i ran down to fidelity with the money. i went right to work trading. almost immediately, i lost a tonne of it. >> the house of pain! certainly sell, sell. >> and i can see how i would have to wash dishes at marty's house and mow the lawn for 125 years to make back the 70 gs i had blown to smitherines. my mistake, as clint eastwood told us so wisely in "magnum force." a man has to know his ontario e own limitations. you can't trade a whole lot of work at once. you have to do after you had ideas you knew had a chance to pan out with an entry point that was reasonable and an exit point that was planned. >> buy, buy, buy. sell, sell, sell. >> knowing you would be gone whether it worked or not to keep that discipline intact. i viemted my own rules and i had blown it. i confessed for the marty my

sins and said he should take whatever is left of the money back. instead, you know what, he wanted to give me more money. he was betting i had learned my lessons. you know what, he was right. i then reverted to my old style, trying to be right about one idea at a time, keeping the rest in cash. going big when i had the most conviction, any good trader would do. i slowly but surely made it back and paper invested a more active but not truly trading portfolio, paper invested, even though i had a half million in the bank, that would become the beginning of my actual professional investing career which you will hear about in the moment. here's the bottom lime. if you are going to trade, make sure you have a catalyst, an exit point where something is supposed to happen and are you out of the stock either way because you were trading, either way, either way, because you are trading not investing. you need conviction. you have to ask yourself, would you be willing for the world to hear, hi, it's me. i'm in the here right now, but i

want you to take a swing at disney ahead of the analyst's meeting. if you can do all those things, start small. give it a try. stick with cramer. all business purchases. so you can capture your receipts, and manage them online with jot, the latest app from ink. so you can spend less time doing paperwork. and more time doing paperwork. ink from chase. so you can. anbe a name and not a number?tor scottrade. ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade. because i don't trade like everybody. i trade like me. that's why i'm with scottrade.

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>> welcome back to this special auto biographical "mad money." i am teaching you life lessons from my life. now we're up to the professional grade. my time when i started at goldman sachs. now, i had been courting and been courted by goldman sachs for three years before i got a job. it was then called security sales, helping small institutions manage their money. i got a tonne of history those years and in confessions of a street addict. you can get the skinny in the outrageous attendance stories. tonight's show like every "mad money" is learning about trading and investing by studying with me at the university of hard knocks, just to give you cool funny stories. i will dispense of the an next doets and try anecdotes from

goldman sachs. i am about making money. first, that's where i began to understand the process of actual money management, not picking a stock here or there. but the process, the ability to build a portfolio from the ground up and i have the best teachers in the world at goldman sachs. one of the great hedge fun managers of our time, lee cooper. lee cooper was the research director at goldman. he put on investing clinical almost every day of which i never missed a session. hardly an hour went by when i didn't hear a new great idea to explore. you know who i really learned from? my customers. chiefly wealthy individuals from all walks of life. it was at golden i learned something to this day can't be understood by so many professionals, including the academics. individuals can and do beat the market quite regularly. why can't they know it? if they only worked at goldman with me, they would see it. they would know what i saw, know

all theoretical, i'm practical. within i was at goldman, i have nondiscretionary countsk, meaning i wasn't allowed to invest anyone else's money with my own ideas or investment ideas unless i can win them over to make the purchase. i had to talk them into it. remember, i was on commission and made money only with the buys or sales. there was no 1% wins. that came later with my hedge fund. that's whaen e when i learned to articulate it in a way that made sense. can you do that to someone if you were picking a stock? you had to know your stuff. i often ask the boyar questions about whether they knew enough about the stock, their stocks, about the ones they suggested to me they wanted to boy. i wanted them to be as educated as possible by my idea or their ideas. that's because i few that stocks go down. i knew if it went down, well, let's say if it went up, it would be their idea, right? if it went down, it's on me.

hand the is just human nature. i realize that very quickly. you can never say, pam, that was your idea. what else did i learn? humility. it was at goldman sachs i learned how humbling this can be. when one of your ideas went against you, you had to get on the horn and you had to explain either why the person should buy more or whether they should cut their losses. that's why you always have as to recognize how fallable investing can be and how you have to understand what to do when stocks go say gainst you. i also learned to let your gains run, could you cut those losses? i learned the hard way. many of my clients were terrific business people who didn't know that much about stocks. they had been fabulous building up great wealth. not through the stockmarket, but through actual companies. okay. so i had this real cantankerous

client, a real estate tycoon. he had worked hard to get where he was. i was working hard to try to get him as a client, trying to win him over and it took me ages an ages. i told him, when i finally convinced him he should work with me, that i would be judicious. i would work hard and get it right by him. he said, point-blank, he didn't want to trade. no trading, jim. i want longer term investments. at the time i liked kimberly-clark. the maybe company. i still do. the management comes on the show. i told this cantankerous client i thought this one kmb would be terrific for his portfolio. he agreed. i got i. i got the sale. he told me to buy a thousand shares. i got i. almost immediately it went up 8 points. it was a dream. i had a winner. so i called him, i said, bob, bob, i want to ring the register. i want to sell the 1,000 sales at kimberly-clark.

i thought he'd thank me. he was furious. he told me that i had sze said kimberly would be good for the longer the, that it could have great gains over time. he wasn't the least bit interested in only making $8,000. then he questioned my integrity. he wanted to know if i was churning him. that's a hard charge meaning i was trying to generate commissions with his money. you know what? i was scorched and torched. but he did teach me a terrific lesson. just as you don't want to surgeon u turn a trade into an investment, it's the reason why you ferment why you are into it. you have a good one, lettich run, for heaven's sake. you know what, bob was right. kimberly ultimately doubled. and, well, i was vindicated, despite myself. finally, i learned the science behind building a portfolio and understanding long-term wealth. a lot of my business involved contacting people who came into cash, through the sale of business, like a power pole

winner or somebody who would sell to yahoo. now, these people tended to be rather unsophisticated about their money as they may be unsophisticated about something else in life. i regarded it as listening to nooer their needs, finding out what they wanted. did they want exam prersvation, meaning they didn't want to rick their money but make a little of it or were they aggressive? did they want capital appreciation? build that wealth quickly. i tried to get to know them. i urged them to get to know themself, just as you should know yourself. you may think you want to get rich quick, believe me. you want to get rich carefully. ask yourself, can you handle the pain of a market decline? would you prefer your money to appreciate slowly and get most say in fixed income, meaning bonds or maybe dividends. do you want to participate in new issues? try that, it could be too risky. do you want to hit it out of the park, maybe i'm not the right guy for u. many of you are

familiar with these lessons. i try to teach you how to know yourself and to know what you can hand him and can't. finally, this is one i learned the value of diversification. at goldman sack, it was hotter than a pistol. you could have oil companies double and double and double again in a very short time after they struck oil. we fixed out how big the fines were him they were pretty available back then. so everyone got caught up in oils. the families that covered oils, the p.a. they called it. every day seems like a good day, oil service, oil drillers, oil platforms, you name it. then one day, oil the commodity plummeted in price. the saudis started pumping like mad. some global tensions jacked up the price were settled. they had cooled. next thing you know the bum markets were bear. those who had nothing but oils including yours truly, we were crushed. i had understood first hand from right then the concept of

diversification. while i followed the ruse, i never avoided diversification. hence why we play, am i diversified? hence i think it's important. i almost lost everything. i learned from my early days at goldman sax the core principles of investing, building a diversified portfolio to create long-term wealth. that included no margin buying. consider yourself the customer of this show. remember, all my investors who consistently beat the market on their own in ways they liked aided by people like me who would work with them cons consciencetiously put their plans. .

humans. even when we cross our "ts" and dot our "i's", we still run into problems. that's why liberty mutual insurance offers accident forgiveness with our auto policies. if you qualify, your rates won't go up due to your first accident. because making mistakes is only human, and so are we. we also offer new car replacement, so if you total your new car, we'll give you the money for a new one. call liberty mutual insurance at... and ask us all about our auto features, like guaranteed repairs, where if you get into an accident and use one of our certified repair shops, the repairs are guaranteed for life. so call... to talk with an insurance expert about everything that comes standard with our base auto policy. and if you switch, you could save up to $423. liberty mutual insurance -- responsibility.

what's your policy? you follow my love affair of stocks to show the importance of starting early in investing. solely invested in a mutual fund no matter what the circumstances, to understand the need to save. i want to wish you success in trading and investing and to remind you when you hear from the graveyards to say you can't make money at home and have to give it to a fund. the story of my life is you can make money in many different ways, with managerers, brokers yes, gloriously by yourself. stick with cramer.

here's my take. profits are the mother's milking of stocks. you got to grow the pie larger for everybody. free market capitalism is the beth path to prosperity. this is "the kudlow report." .

>> i like to say there is always a bull market somewhere. i promise to find it just for you, right here on "mad money." i'm jim cramer. see you next time. >> the scandals and questions facing president obama and the entire executive branch just aren't going away. tonight, the biggest questions are all about attorney general eric holder, whether he lied to congress when he said this just last week. >> with regard to the potential prosecution of the press for the disclosure material, that is not something that i've ever been involved in or heard of or we think would be a wise policy. >> yes, but, in fact, as nbc news first reported and the justice department first confirmed, eric holder personally signed off to fox