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. i'm trying to save you money. my job is not just to entertain you but educate you. call me at 1-800-743-cnbc. investing can be a lot like comedy in both disciplines

timing is everything. perhaps the similarity is why occasionally people call me a clown or a joker. as long as it's not a midnight toker. maybe they're complicating my timing but they compare me to them. when it comes to stocks knowing the right moment to buy, the right moment to sell among the most important yet difficult parts of managing your own money. you tell me this so many times when i see you. i'm solving it tonight. precision is tough to get right. you see come memorial servitheme to time the market. there's a whole group of people that make a living telling you there's no way a regular investor can do it. give up on trying to trade. give up on picking your own stocks and put all of your money in a fund that mimics the

performance of the stock in the whole. they can be a decent way to make money in the market but the argument that they're the only way to go is bogus. we all have made money with individual stocks or know people that have. that success is denied by all who are for the brain dead form of investing. if you bought in at the peak of october 2007, s&p 500 was trading at 1500, you got annihilated. where as if you came in later you made out like a bandit. you ended up losing half your money in about 18 months. sure eventually you made a descent chunk of it back.

that can take ages to come back from. and of course put the dow jones average before europe ruled in april 2011 and then panic in summer 2011 you saw 20% of your capital erased. recently they're regular occurrences and they get my point across. timing is everything if you want to make money and last i looked that is a worth while objective not trumped by the demand that you go into an index fund. timing or how to better time investments is something that can be taught and that's what i do. so it is my mission in life to make you better or at least a better client, full service broker which i also like instead of being self-directed. i'm going to teach you to do a better job of timing your moves by avoiding common mistakes and absorbing crucial lessons that i picked up in trading. one of the reasons timing the

markets is so tough is when you should be putting money to work investing sideline cash switching from bonds to stocks are also often the moments of the greatest terror and angst. they're the exact hours or minutes when everyone is telling you to get out and all of your instincts are screaming that you should panic. i understand their concern. it's a lot easier to say i should sell something here when everything is going down than to say no, wait a second, it's time to buy. no one is going to remember you as a hero if the market goes right back up. you will always be a goat if it keeps going down. especially nowadays when twitter and youtube can keep anything alive in context or out of it. the market could go up the next day and people don't realize the rest of the sentence is if you're up, maybe you should go. maybe the days when you were freaking out because the market is being clobbered, they're

almost never a time to sell. there will come a better time. a time when the market dips a bit. why not try this strategy for a change. just reverse your thinking. pick something to buy, not sell. do it small. you don't have to be heroic but you also don't have to break down the doors on the way out. nobody ever made a dime panicking. it's an awful strategy if one can call panicking a strategy. let me put it another way. pause you don't like a market doesn't mean it's the right move to sell. only once in 30 years was it right. every single other time it was wrong. remember the sequestration scare? the debt ceiling debacle. the japanese nuclear crisis. the 1987 crash. i'm that old.

1911 for that matter. pan -- 9/11 for that matter. panic selling hasn't worked. the only time it made sense was 2008 because the financial institution was on the brink of the collapse. that was a systemic crisis. not a temporary crisis. so it made plenty of sense which is why i told you to sell. i went on the "today" show of october 6th, 2008. >> what is your advice today? >> whatever money you may need for the next five years please take it out of the stock market right now. >> yeah, when the whole system was in jeopardy only time since the great depression buying actually hurt you. stocks kept falling and falling and falling. it was a good call. you never got the chance to unload the merchandise you bought at a higher price. that was the only time. that instance, once in 80 years.

i don't expect that to repeat itself. in october of 2008 i was criticized for what i said on that today show. telling people to sell. i was told i was yelling fire in a crowded theater. if the theater is burning you need to get others out. in 2008 and 2008 only quick and almost immediate selling was the right move. the market was heading down huge almost in a straight line. it was smart to sell even if we were already 700 points down. getting in was tough but you managed to side step a decline of more than 35% if you took action. of course it was better to heed my september 2008 call but that was done in a less dire moment. they are among the proudest hours i've had in mad money but they get lost in day-to-day investing. maybe that's good. that selling is not an appropriate take away unless the whole system is in jeopardy and as i tick down the other

proximate causes for big sells in the last few years you can tell they ended up being moments to buy, not sell. yet every other crash or correction or sell off you could afford to wait or should have bought into the panic. how about the timing within the sell off? i find that within day one of a vicious decline, hold your horses. you have to stay patient. patience doesn't come easily. wait it out abit. pref ably 5 to 7%. the wreck less hedge fund was collapsing in october threatening to bring down other institutions with it and i wrote a column for the online publication i just founded called the street.com and it was

called get out now. get out now. i was advising people to sell because the fed didn't seem to understand the gravity of the moment and was ignoring the crisis that could spin out of control. within one hour of the posting the fed held an emergency meeting to cut rates. and the market rallied approximate back in my face. magnified by the time stamped audience. people still pen about that chapter on twitter and the lessons learned from it. if you took the other side of my panic you made fortunes. i'm pointing it out not to say i'm an idiot but it happens. i radically reversed my stance not long afterened i had to pay up huge and i still feel the scrambled eggs on my face now and then from that call. do not sell in the midst of an awful decline no matter how much

you want to. that's bad timing. keep your head. you will get a better moment to sell. in all of my years of trading panic has only been a huge sell in systemic problems. remember that and my story about getting it wrong the next time we get a horrible pull back. believe me, it will not be systemic like it was in 2008. may i go to paul in california, please? paul. >> caller: yes, jim, this is paul from california. first of all, i want to thank you very much for all of your help and research. >> thank you. >> caller: you have really helped my family and i appreciate it. >> thank you. >> caller: you always say to use limit orders but if i have been watching a stock and tracking it constantly and it finally hits the buy price that i want, wouldn't be it smart for me to use a market order if i feel it's gone down? or do you think i should wait for a limit order price?

>> you have to wait. let me tell you why, some of the big declines we've had have been so fast and breathtaking that you get a report that you bought a stock at 20 and it's 15 because the machines went wrong. until they rule it has to be banned, i can't say yes to that kind of order. >> caller: you and your crew are fantastic. >> they are good. >> caller: my call today is on options. i hear on cnbc and sometimes on your show that options for a particular stock are expensive right now or reasonably priced right now. how would i know when options are reasonably priced or expensive? i've read all your books but i don't remember this being discussed. >> i addressed it in real money

and also a little bit in getting back even but it's a great question. what i like to do is look at how many points over -- you take the option and then you look at what is known as the premium. how much it is over if you backed out the price of the stock. if it is very high and the expiration of the put or the call is happening in a very near short of time you know it's expensive. you have to measure the premium. the premium could be too big. that's when you have to avoid it. you heard it before. timing is everything. especially when it comes to investing. please, please, no panic. time is on your side. take a breath, relax, keep your head, and maybe buy. time is money. i got a lot more coming up. stay with us.

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>> when to buy? when to sell? it's all about time. that's right, you could have the best stock picks in the world, it wouldn't mean a thing for your portfolio if you didn't have a sense of timing. i am a believer that non-professionals can manage the money just as well as the pros, sometimes better. that's why i come out to teach. you may have heard from the naysayers, intelligencia, it's possible to beat the market and outperform the benchmarks, that's like the s&p 500, as long as you know what you are doing and think like a disciplined investor rather than a gambler. if you are devoted and inclined to learn about stocks, my experience is that you will most likely beat many money managers and you will be able to take taxable gains and losses when they suit you, not the manager, a very important issue concerning the importance of taxes and long-term performance.

right? a huge part of knowing what you are doing is having decent timing or knowing enough to make, not to make boneheaded mistakes about when to buy and sell. that's why tonight i'm going over the most frequent errors investors can make. >> so i can steer you on the right track. it's easy not to make mistakes when everything is going away him when the mark turns south, when everything looks like it's turning apart, when the braesh is on, that's when people tend to screw up. for example, let's say your portfolio has your pants down, many of you are caught ern owning too much stock, something pros call having too much exposure? i have been there. it's horrible. the worst part is not knowing what to do, whether you should blow out of your stocks or hold tight. you know what else is extremely dangerous in a struggling market? the propensity to take sweeping drastic action all at once. when it seems like everything is going wrong, when you know the

economy and the market are getting worse, you are dead certain nothing good can happen. here's my advice. take a breath. hold it. don't do anything crazy. i would say meditate and do yoga. i am one of those down dogs who roommates about how bad things are, instead of concentrating on breathing. i'm concentrating on how horrible things are. what's crazy? selling everything is crazy, even if you owned too much stock and you wanted to lighten up, you have resist the urge to sell everything. that's bad timing. i always tell you never to buy or sell all at once, it's pure arrogance, my rule is that you should buy and sell by increments, if a stock you bought goes down, you can buy it at a price, can you sell more to take advantage of the price rather than feeling like a chump. rule applies to more than individual stocks, it applys to your whole portfolio. you should never sell everything all at once. what's the right move? here is your crisis playbook, moments when the fundamentals

are deteriorating in front of you and you generally want to get out. first you have to sell something, not everything is equally good. and some might be bad. here's my rule for what can be sold in a pullback. got store, don't give them back. that's when you have to remember this sound, you have something where the fundamental apples have changed, the story is going against it. blow out of that stock, people. you have something that you think is going lower in the short term, you know what sell, sell, sell, sell a little, please. do it. that's fine. you can buy it back lower. do not sell at all. that is just plain stupid. don't ever blow out of everything. don't give up on stocks entirely and hide in treasury bonds or cds or puny yields. instead, when things look dire, get ready to deploy your capital that are selling off. use that money to buy something you really like. this is why not in the heat of battle in the calm at the end of the week, i rate all my stocks and my charitable trust.

you can follow along from 1 to 4, the 1s the best, 4s the worst. i swear this rating system will help you. i pioneered it. it is on display on every bull ten we send out every day. it is the best way to handle a sell-off. it is a proven game plan i have used for three decades. it has never steered me wrong. the 1s, what are they? they're the top flight stocks. they're the names you begin to buy more in moments of pure chaos. you have been ready. you have done the work. you know they are ripe for the occasion. the 4s are the expendables that you sell when things turn awful. you just don't get emotionally attached. you don't. they'll get it back. the 3s, stocks you wish were higher before you sell them, they can be sacrificed if you need to raise cash for your 1s. don't wait for them to get back to even if something is likely to go up a lot quicker during the same period of time. the 2s, they are the highs before i pull the trigger. why not sell it all when it seems like the market is turning against you. why not?

american stores. don't know it? don't remember it? american stores is the old acme, my favorite supermarket when i was growing up. i had owned them in 1990s with my old hedge fund, betting that one day it will be taken over, that it was worth so much more than it was selling for, time will be on my side. then we got a brutal sell-off. i couldn't stand the pain. i got goldman sachs. i picked them up in the phone, i said, "buy my whole book." meaning they took me out of all of my options. they stopped me down from 2%, they agreed i would get the proceeds down 2%, no more than that. you could do that then. you could literally offer everything you had and they would buy it on the line. included in that package i sold the stores. it was so ugly, i didn't want to own anything, including a stock i owned forever.

a big institutional trader i was could get a huge firm like goldman sachs to buy it as a discount, knowing you could crush your stocks and do damage by going at it piecemeal, it was what i to the was a prudent decision. two weeks later, two weeks later, after i had sold all my position, albertson's bought american stores. it was a huge premium. gigantic. i couldn't believe it. i had held on to american stores for all these years. like a chump i told it because i couldn't take the pain. if i had added the position, i could have blown it out and made my year. i always remembered that moment, it caused me to rethink i always remembered that moment, stocks down 2%, you know what, the stockmarket bottomed out 2%. i didn't have the guts to go back in at the time because i was so adamant we were going down 4 to 5%. what's the moral? selling something wasn't a bad idea. the pain sometimes becomes too unbearable.

i know that when you're all in. meaning you have little to no cash on the sidelines, selling everything, massive mistake. it's always good to use a top notch futures led 500 seller to pick at. not load off, pick at your 1s, your favorite stocks and they always end at some point. not all of your stocks will bottom at the same. if you rank them, you probably won't care the best ones will get put on sale along with all the other merchandise, the good with the bad, the weave of the chat and the draws for that matter. selling everything, getting out all at the same time, that doesn't leave room for the possibly that things can and they might get better and quickly. it doesn't leave room for the next american stores. it takes you out of the stocks you have been waiting on, being patient. it's awful timing. the time warps feelings ability stocks. so never trade like it's the apocalypse, never sell everything all at once. instead, go to the supermarket of stocks. buy out what you want to buy on weakness, remember, i checked out of the most important stock i liked in my zeal, to get into

that ten items or less line and to because of my haste, my bearishness, i missed the huge american store's buyout and the stock rally that followed soon after i left the store. do not repeat my mistake. after the break, i'll try to save you more money.

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with apologies to the great carol king it's never to late to know what you own anyway. we live in a world where too many people never met a disaster they don't like. they're all equal these days. you can bet that the press will go into total financial disaster mode. day after day, the more sensationalistic and frightening, the better. everyone is kind of addicted to

it. it fans the flames of panic. every negative story will make it seem like it's the end of the world as we know it or we're on the end of the world. we have to accept this overreaction is a part of the change in the way the business media and market, all media, sports media, you can't shake. it's almost like they want to shake you out. they want to shake you out of just about anything you want to own or might want to buy. at times we seem to be unable to steer ourselves against the glue machine, instead, view our own thoughts with unlimited pessimism over all outcomes. how many times have we seen this happen? think about it. the market sold off based on instability, egypt and civil war in libya, cypress, tragic earthquake and tsunami in japan prompted a full nuclear crisis

the sovereign debt crisis in europe i think now finally is over. what should you do during these types of scares? what's the right way to react to this kind of crisis? i think these terrific non-systemic risks, meaning the bank in the u.s. is not about to go under. these moments can make terrific buying opportunities in the right stocks. you got to get it in your head, how? okay. let's figure this out "mad money" style, using the method that i would employ at my hedge fund that i no longer work at and retired from. it drove down the stock futures. remember, chicago futures they locked down new york stock also. first we had to put the event in the perspective, okay. the news is potentially tragic. it almost always is. you can't ever make fun of it it's not something you make light of. what effect does it have on the numbers? what about the numbers in cramerica? let me give you an example. in the 20 years i invested in other people's money, i use what

i call the bristol-myers theory. the company i felt always had the most consistent earnings imaginable. nothing is changed. at the hedge fund, we had board meetings at 6:00 a.m. what was the point? get the heck out. we might as well go home. since the opportunity to make money has passed. i sent you home if you were a minute late. they were lucky if i didn't throw water bottles at their backs. i saved that for when they lost me money. i did throw. i hit the guy. every time we got rid of noes those nasty events at the morning meeting, somebody would say what are we going to do now? iraq invaded kuwait? what do we do, jim what do we do? first off, i'd say, call your mommy. dripping with sarcasm and arrogance, what the heck does that have to do with the priced to earnings ratio of bristol-myers? of course, the answer is nothing. the first thing i always did when i heard or saw a big scary event was to make an equivalent

to bristol-myers him they wouldn't be hurt even if it turned out to be worse tan expected. at times it can seem like we have a terrifying new crisis every other week. you need to develop your own bristol meyers names. maybe it's a high yielding food stock. maybe it's verizon, another steady eddie company with a big dividend, southern duke, i don't know, be ready. find something you like and get ready to buy during a market-wide sell-off that won't hurt the earnings of verizon, or pinnacle or southern or duke at general mills, for instance, step two, ask yourself, is this the event? is it bad for all the earnings out there? for example, when the egyptians were demonstrating the streets in early 2011 and demonstrating again, trying to kick out a dictator, there was a moment when even the oil stocks, which benefitted from higher oil prices got knocked down along with everything else. doesn't that make no sense whatsoever? that was tremendous buying opportunity. if you bought the oils, that's what you had to do. same with the overthrow of the

elected but diselected egyptian leader in 2013. egypt gives us a lot of selloffs. what does this mean? it means when oil comes down because of unrest, if it's in an area that threatens the oil price to go higher, you got to act. you have to buy. i'm sorry, there is some big scary crisis somewhere on the globe, like the sequesters an debt ceiling, unrest in unrest in egypt. i need you to remember the bristol-myers theory, what does shave to do with my stock? put it in perspective, maybe you feel you buy an area that's an opportunity brought down by the particular event. the bottom line, there will never be a shortage of terrifying events to bring down the whole market. the next time it happens, don't run away. there might actually be an opportunity for to you make a very, very big profit. vince in maine. vince. >> yes, thank you, professor

cramer for all you do for us. a quick question on what makes stocks split and what do we do when they do? >> this is such an interesting question, people always get it wrong. it's up to the ceo and the board. there is no rule. some companies go, look at berkshire hathaway, up 150,000, 100,000. it's up to warren buffet. companies have to decide whether they think it makes their stock more attractive to individuals or does it make it more attractive to hedge funds, which they typically don't want. i am in favor of stocks because so many of our viewers don't want to buy stocks in the high dollar amount even as i know the truth, which is if you take a pencil and you snap it in half, you don't have two long pencils. this is the same thing. it's cosmetic. but in this market, it's working. patrick in arizona, please, patrick. >> hi, jim. we had a stock that's had a good run, we, of course, take some off the table. >> right.

>> but if it's one of our stocks we like long term, what is the plan to get back in when there are no pullbacks? >> well, you know, i got an answer to patrick you are not going to like. happens, you missed it. one of the great things about this market is. >> all aboard. >> there is another train coming to the station. when that happens, you missed it. it's one of the things people don't want to do, anybody, is to say, you know what, i missed that one or i blew it. sometimes you got to own it. charitable trust, i say, we can't buy that one back. it moved too far. that's what happens, you got to wait. john in new york, john. >> caller: jim, good evening. this is john from new york. i have a quick question for you. i own a stock. i made some money with it. i'm looking to take my money and put it into something else. is it best to take one stock with that money or two good stocks with that money? >> it depends on how much time you have. >> caller: split it. >> it depends on how much time you have, i try to say over and over again, if you have no time

at all you should just be in a mutual fund. look, there is a lot of good managers that come on to cnbc. if you have time, do one stock. if you have a couple hours a week, you can do a whole bunch. if you don't have time to monitor it. look at it as quickly as possible. a good investor knows what is she owns period. it's more important than ever in this crazy world. the hyperconnected disaster world, when something happens, i don't want you to be panicked. it could end up being a buying opportunity. >> keep up with cramer all day long. follow at jim cramer on twitter and tweet your questions hashtag mad tweets.

>> time after time, timing is everything. a stitch in time saves 9. whatever you say, whatever trick, remember this, i am teaching you timing your buys and sells can and should be done. those who say it is impossible, they simply want to keep you in your collective chains. consider me a bolt cutter,

setting you free. i want to talk to you now about a particular kind of chain you need to be out of battle from. it's called the ipo chain. i like ipos. it's been an amazing period of time. we've had so many great ipos. we do our best to try to analyze them for you on "mad money." they are not easy to do. so many teams you call me and ask, jim, is xyz a good one? i have to say, it depends on where they bring the deal. jibberish for the amount of shares offered. let's say xyz is becoming public. the bankers are talking about bringing the deal at 20. $20 price times 50 million shares. but the bankers can do a lot of different things. insider own both, venture capitalists who help fund it might own a lot. whoever seeded the company will have a substantial amount of shares left. secondly the ipo price they are talking about. may be what's called the price

talk, meaning what the initial price they are thinking about bringing the company at, not the last price. if demand accelerates, you are going to hear the price move up, maybe to 25, maybe to 30. obviously that puts it at a rich level. i may like the ipo at 20 and may not like it at 30. i may think it's a sale at 30. accept it for an ipo, too, please, some stocks do get too expensive. later on a third variable the bankers if they want it to pop, they want to generate a hot deal with town immediately goes premature, it opens. they can hold back stock. let's say xyz has 50 million shares, getting what is known indications of interest. they might send some other company with 50 million shares has a demand of 10 million to be sold, that offering includes a price of $20 million a share. the stock will wallow. the opposite is true if they cut back the shares. bankers are experienced. these syndicate managers as they

know how to figure out how to make a stock pop and how much they want, simply by severely cutting back number of shares they offer. they say we got a demand for 20. they have 5 million shares. only one-tenth of the shares demanding. cut back will generate real excitement in the number of shares they are given. that's what makes for a hot deal because if the bankers have demand for 10 million shares and issue 5 million, everyone will cut back who wants the stock. it will be wildly oversob described, what we're hoping for. people, that is how hot deals are made. i happen to call these kind of offerings sliver offerings for the days that we brought public the street.com. they did a sliver, a sliver of it. sold a lot in the social media craze. they create a wild pop, bankers choose to make it hot, or perhaps to create excitement.

obviously, if they offer a lot more stock on the deal, there will be a risk it won't hold, it will go below where they price the deal. nothing is worse than what is known as a broken yield with under that immediately goes below the offering price. it hurts shareholders and the company, better offer a sliver, get people excited. all juiced up. six months down the road when what is known as the lock-up expires, hopefully the stock will be well above where it is priced. insiders who choose to sell will get out at a big profit. i don't care about the insiders. i care about you. i want you in on sliver deals, any deal where it owns 10% of the company, i want you in for. so let's take groupon the online social media company. i'm not a fan of this kind of company in general even though this company improved dramatically overtime with new management whom i happen to like very much. i know they can and have done great things for retailers. i've already tired of my daily

offering, i don't want to go 10 miles out of my way to save money, a slice of pizza. brazilian waxing. groupon, the ipo, hey, let me in. there are 640 million shares. sliver of an offering almost assured demand would exceed supply. 20 and trade it to 30. the company raised 7 million and received a giant allocation. needless to say, they only made out like bandits if you sold, well, if you sold, when the selling was good, you made out terrifically. that was the first day of trading. how about the buyers in what is known as the after market. the price of the stock up once it actually started trading. if you bought it at 28 where it opened, you didn't have that much room, did you? after that groupon began an ugly slug down, one that was impossible to reverse until the board finally saw fit to relieve the errant ceo. it's been good. it's been a buy ever since. well, what was the right thing to do? follow steve miller's famous eat it and take the money and run. you can fly like an eagle.

ring the register when it opens. the brokers don't like to encourage what is known as flipping, which is putting in for hot deal, bang out when the stock deal trades, i'm not the broker. they may not condone the practice. i say why not? you do feed business. you put in for a sliver deal, which is designed to pop. why can't you take the pop? unshackle yourself. here's the bottom line chl sometimes there is only two decisions to make, but in for a sliver deal you time that sell, please, don't stick around for one red hot minute longer and never, never, never buy in the after market. the vast majority of the time, buy in the after market on a sliver deal is for suckers. be smart. take the money and run. stick with cramer. where will it send me... one call to hoveround and you'll be singing too! pick up the phone and call hoveround, the premier power chair. hoveround makes it easier than any other power chair.

hoveround is more maneuverable to get you through the tightest doors and hallways. more reliable. hoveround employees build your chair, deliver your chair, and will service your chair for as long as you own your chair. most importantly, 9 out of 10 people got their hoveround for little or no cost. call now for your free dvd and information kit. you don't really have to give up living, because you don't have your legs. hoveround replaced the legs. and now every hoveround comes with this handy tote bag and cup holder for access to your favorite items. and right now, get this limited edition hoveround america travel mug free with your hoveround delivery. [singing] hoveround takes me where i wanna go. call or log on to hoveround.com to find out where a hoveround can take you!

>> not every stock can be owned forever, period, no, there are very few stocks that you should own all the time. year after year, decade of decade. the fact is, if you don't know what would make you sell a

stock, then it's not okay for you to buy that stock. lots of people end up selling at the wrong time, they never anticipated selling at all. they figured that's never going to happen. they only thought about what they wanted to buy. they didn't have what i call an exit strategy. as your investing coach, i need you to make sure you don't make that same mistake. i need you to develop exit strategies for your stock. how do you time yourselves? okay. there are many stocks where you, when you buy them, you need to understand some day, possibly some day soon you will have to sell, for example, high flying tech stocks. they're like they can be obsolete almost immediately. it's simply not safe to own them unless you recognize they can't be owned forever. eventually, you need to ring the register and take the profits when you have them, before they slip away. that's why warren buffet never owns the smoke stack. they make money when the economy is healthy. they're hostage. they sell sunday, the first real sign of a slowdown, association

you can't ride through it. lot of this comes down to understanding. tech stocks not just the same as pepsico, the first of these tech names are trading vehicles that can fly and crash. second half of the pepsicos that are staples and can trade forever. a trading vehicle can make you a lot of money, not a lot of time. you have to take it off the table every now and then, if you let it ride, that vehicle will eventually crash, dropping 10, 20, 40, 50% in a matter of day, hours even. a staple can be earned long-term. the business can underperform. of course, we will find out about that ahead, we will sell it. it's very unlikely the stock will fall off a clip. in other words, when it comes to changing vehicles, you have to sell when it's time to sell. tech stocks are winners when a cycle is strong, smartphones, or tablet computers

some companies find smartphones can make you a lot of money when times are good. you got to believe it can get you annihilated when business isn't hot. the only exception here is if there is no cycle. no hershey bar cycle. we don't talk about people using more kellogg's frosted flakes in the spring. there is no seasonality. but that's simply not the case. take the dot-com run, it was so fantastic. i got to tell you, you had to catch it. if you bought at any time up to the lost two months and sold it, you would have made a fortune, perhaps the most ever churngs perhaps the most ever. back then, you had to buy the parts and the equipment makers, big, small, independent were expanding. they had all this money from the stockmarket. until the demand fell apart, keep owning these stocks. if you didn't sell, you were blown out. you had to buy and sell. i tried to teach that you you have to change your view when the facts change, at jim kramer on twitter, it is the case. i don't want you to end up like

the victims in the dot-com bond. the people refused to sell and got wiped out. sometimes that means selling something even though you bought it at a higher price, another thing people hate to do. the facts have changed the business has gotten weaker. you don't make money on every single trade or investment. all you want to do is live to play again. often the shooting star tech stocks will get hammered after the first signs that things are deteriorating. don't tell yourself it's time to sell. it's not. they can go lower. use any day strength to lighten up, come on. your first loss is your best loss, stay investing in the same world, i was reading the other day, boy, is that pertinent to what i'm talking about. discipline makes a huge difference. i am tireless in telling you not took grody, saying you have to take something off the table, i endlessly tell you it doesn't matter where a stock has been. when it goes down, down, down, when that happens, sorry, you have to sell the darn thing. if you love it, you can buy it

back lower when business is improving and not deteriorating. don't treat businesses as though they're staples that can be held for ages. there are third rail names. take caution. you can do very well for yourself. take profits on the way up. get out of the way down. you don't have to go over the top to make money in these names. have you to be willing to jump ship. when it's clear the stock is peaked and the business and you are ready to head down, stay with cramer.

hear we go. the first tweeter says i'm trying to buy a small regional bank with no buying with limited order, getting in on low buy no volume stocks, don't do them unless you buy ten shares or maybe 100 shares. why? because i talked about an exit strategy. it's difficult to get out of those. with 100 shares, yes, you can put a limited order, of course. nothing bigger if there is no real market. it's not for you. and now to the blood diamond, who write, when you are not on squawk on the street, mad money, or twitter, life is not the same. i am hashtag addicted to jim cramer i am hashtag addicted to taking a vacation.

you should see me at the shore, i am more recharged. hash tag. chartnado. chartnado. our next tweet comes from an early bird show. this one says, following, can you talk about the preferred stockmarket? preferreds are another form of capitalist corporate bonds, preferreds, they're stocks. i like the preferreds in getting back even, i talk about bank preferreds. i think that's the best place the best thing i had preferred. matthew says how much do you sleep a night? what keeps you up all night? unfortunately, i have a sleep disorder. i have two or three nights a month i don't go to sleep. most nights i go to bed at 11:30 or 12:00 and get up at 3:30 or 4:00. now, hashtag charitable jim, would you explain how a contraryian will buy stock on a pullback? thanks for all you do. i am going to refer you to bob langstuff in real money.com. he knows it better than anyone.

i like to say, "stick with cramer."

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>> chartnado. i like to say there's always a bull market somewhere, and i promise to help you find it right here on "mad money." i'm jim cramer. i will see you next time! student loan cosigner releases -- fact or fiction? also, a "suze follow up." i heard you just say that i was right, but did you really -- >> you weright. >> well, of course i was. and you ask me, "can i afford it?" >> i want to buy a 2013 nissan 370z to replace my car that i've had since i began driving seven years ago. >> big discount there, brian -- $45,000, a discounted deal there. hi, everybody. i'm suze orman, and you are watching "the suze orman show."