but here is a stock breaking out. thermo fisher, science. the ceo is speaking next week at a goldman conference. >> i'm melissa lee. we'll >> 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." other people want to make friends, i'm trying to save you a little money. my job is to teach and coach you, so call me or tweet me at jim cramer. nobody, i remember, nobody likes to be disciplined. they don't like to be admonished. and they don't like to follow the rules.

i don't blame them. i was a rambunctious kid myself when i started to manage my own money at first i didn't know the rules and when i learned them, i sprang them because i didn't believe they could help or cut off my upside. even if they cushioned the inevitable downside. the rules kept me from making a huge amount of money when things were going gangbusters in order to keep me from losing money when things went badly. >> the house of pain. >> the rules i'm discussing keep you in the game even when things are tough and you make those mistakes. the rules protect you against your own bad judgment what's going on in the companies you own or whatever is happening in the market overall. if you're going to make money using stocks because you just can't get much of a return anywhere else these days, that's pretty much the case, you're going to have to work harder with your money to do so. and that requires discipline.

discipline because once you start buying and selling stocks, you can make more mistakes than if you just do nothing with your money. if you do nothing with your money, you'll have a whole lot of nothing to show for it. that's why we're doing a show on how to trade and invest responsibly to make your money work for you. how to tend it and make it grow. we're kind of gardeners of money tonight, keep it growing from active money management, that's not a sin and a lot of you practice it. i want you to do it right. before we dig into the ways to make money grow by being hands on about it, i want to delve into a little psychology of stock ownership. i go back and forth from this street to squawk on the street or wall street or ask me on twitter, don't you worry about your stocks? now, it is true that i don't own any individual stocks. i invest just for charity with all profits and dividends given

away to charitable causes, more than $2 million in the time since i set up my charitable trust. but i still worry as i want to be able to give as much money to charity as i can. plus, tell you and explain what i'm going to do it before i do it, you bet i'm concerned. it can be downright embarrassing when i get it wrong. i'm always worry about the trust stocks and doubly worried when they go down when the market as a whole is going up. that's a sign to me that something is wrong and someone knows something that i don't know. i better find out or i won't be able to take advantage of the weakness to buy more. i'll have to sell instead. that's the chief reason why i'm always bugging you about reading news releases and going over the conference calls, and going to the websites for more information. you can't be informed if you don't try to inform yourself. i know that those who don't know

what they own and can't articulate what they own and don't know what a company makes or sells, don't know why it would be going down either. they don't know whether to buy or sell into a big sell-off. however, we are talking with psychology here, the psychology of the mind when all of that homework doesn't pan out. believe me, it is frustrating. when we select a stock on the show to highlight, we do a massive amount of work on every time, same as i would do on my old hedge fund. it is difficult to see is it go down. there are plenty of times when there is something you can't detect. there's plenty of time when there's puffing by management and we don't know the truth. i talk many times about press releases that make things sound better than they are. the ones that satisfy we're i am pleased to represent it has gone up 12%, but it means 20% and

with that 12%, you have a hideous shortfall or worse than that kind of puffery, when you own a stock and someone knows the truth and you don't. maybe someone found out about the truth playing golf with an executive. you know that stuff goes on. maybe some hedge funds paid under the table to get the truth as we've seen time and again for years and years. even as many hedge fund titans ended up in jail for doing it. the insiders had the call. you didn't. they are also tons of time where you simply own too much stock in the market versus what the market is going to do. we call this being too long, as professionals say and can't buy anymore stock on the way down because you're so out of capital you'll lose money, at least on paper or bow rowing money for your portfolio. stocks aren't houses, you can't fall back and live in them if you have a mortgage on them.

they just get taken away by the margin clerks. >> sell, sell, sell! >> what do you do? how do you manage a portfolio under conditions where things go wrong with the stocks you own all the time and things go wrong in the market all the time, wholly apart of what's going on at the individual companies in which you own shares. there are no magic bullets but i believe when in doubt, this one principle is key. discipline trumps conviction. memorize that term. discipline trumps conviction. i stared at the yellow post-it for many years when i was managing money professionally to remind myself things go wrong and you need a scheme to help you deal with situations as things go wrong as they do. i put a discipline trumps conviction sign right on my personal computer to remind me of what to do in the stock market when things go awry.

one of my best forms of protection is to recognize if you're not tough on your own decision-making and like your stocks equally or pretend to like them equally, you can't be flexible and change up when things go wrong. that's bad, people. that's why i've come up with a system of ranking my stocks when things are good and times are placid as hedge funds -- these are hedges against yourself for when things get tough. when it's really calm out there you can do good decision-making. remember, not all stocks are created equally. when things go kerr flooy, just like a wagon trail in the 1800s, buy them down to get take better basis or average price for your holdings. why does this matter so much? because we must expect corrections and much expect declines as a matter of course of the more on that later in the show. we must anticipate the days where we wake up and hear good people on "squawk box" saying futures are down, down a great deal and market looks to open

down half a percent. you've heard that so many times. we've learned so much over the years about what triggers corrections. more on that later too. the most important thing is to have a game plan, where you know that even when you've done all of the homework and have the tremendous conviction, discipline dictates that you must assume there's something you don't know going on with your individual stocks or that there's something happening in the world that is beyond the control of your acumen and you're being victimized by the events of the market. my ranking system will get you through the chaotic times. when all others around you or fumbling and fretting and they can't take it anymore and have to get out of dodge at the exact worst time. heergz the bottom line, in order to deal with the decline in the stocks or in the stock market as a whole, you have to accept that something is wrong that the companies you own shares in that you might not know about or maybe there's something happening in the stock market that you didn't foresee. therefore, you must be ready with a game plan that can bail

you out short term and keep you in the market longer term so your money works for you and not against you in a time when you need it most. frank in new york. frank? >> caller: jim, i understand why a company goes public to raise capital for various different reasons. but why would a company want to go private? >> this is a great question. typically want a company to go private because they think it's worth more than what the stock market is paying for it. that is key. when you see a company go private, that's because the owners and managers of the company recognize there's so much value and the stockholders and buyers don't and take it private and make it look better then they tend to bring it public again. how about ann in california. >> caller: hi, i haven't seen any pro inspectus on stock splits lately. is there sne way to tell when a company is going to split stock? >> no, there isn't. companies tend to be close to the vest about it. when you split a stock, you only

get two pieces of the same company. it doesn't necessarily create any wealth at all. it happens to be exciting and i can tell you when stocks do split, some of the smaller investors have a chance to buy that they didn't have otherwise. i'm pro split but it does not create any wealth and they tend not to signal when it will happen. >> discipline isn't fun but it is necessary if you want to make big money in the stock market. when there's a decline, you have to accept the facts and always have a game plan ready. i'll help you out on "mad money" tonight, trades and investments, knowing the difference will explain you from a world of hurt. >> house of pain. >> investing on headlines' ever word, we'll help you spot the true story. a correction is always lurking around the corner. i'll help you protect yourself when it strikes. stick with cramer. >> don't miss a second of mad

money, follow on twitter. have a question? tweet cramer, #madtweets and send jim a e-mail to madmoney at cnbc.com. or give us a call 1-800-743-cnbc.

we're always looking for ways to speed up your car insurance search. here's the latest. problem is, we haven't figured out how to reverse it. for now, just log on to compare.com... plug in some simple info and get up to 50 free quotes. choose the lowest and hit purchase. now...if you'll excuse me, i'm late for an important function. compare.com. saving humanity from high insurance rates.

♪ >> tonight we're going over the rules, the rules make it so losses can be pal atable and keep you in the game when others are freaking out. i used to talk about the rules all the time when i was managing money until they became second nature to me. that was years ago and when i think about it, it's usually in response to a tweet at jim cramer that asks a question that the rules answer and answer kind of axe toshio mattically. i've got to dust them off and make sure people realize i'm not ducking their companies and flushing them out than 140 characters. i want to be thoughtful on twitter but it's really hard. this is the format.

someone will mention a stock, that had a hideous decline. what do i do now? i often turn the table, why did you buy it in the first place? the followers tend to regard that answer as either arrogant or flip. i'm trying to figure if they bought it as an investment, which it might be fine in a longer time horizon and buy more or do it for a trade and perhaps they they should cut their losses. why does this matter? one of the cardinal rules, to never turn a trade into an investment. if there's one concept you must take away from this show, never turn a trade into something that it wasn't meant to be, a long-term investment. let's talk about the process of buying a stock, the check down you do before you pull the trigger. when i decide i'm going to buy an oil driller, i have to declare right up front to myself whether i'm buying it for a

trade or for an investment. what's the difference? a trade means that i'm buying it because of a specific catalyst, a reason that will drive it higher. that kcatalyst might be a datapoint, a belief something may be better than expected or restructuring or break-up into several pieces or some other material event that could occur. in other words there's a moment to pull the trigger, a moment to buy. perhaps because you think that oil is about to spike because of a shutdown of the somethipigot russia or problems in the middle east and there's a moment to -- >> sell, sell, sell! >> when the event occurs and you're done. you must declare first before you buy. the vast majority will buy a stock for a reason and either the reason occurs and nothing happens to the stock, so you then decide, darn, i'll call it an investment and won't worry about it, buy more if it goes down or you decide to hold onto it because what's the worst

thing that can happen? the answer of course is plenty and almost all of it bad. the answer is you never bought it in the first place if you didn't think the reason was going to occur. now there's no reason to own it in the first played. i've seen a myriad of investors developing a rationale that they are doing the right thing because they don't make the distinction between a trade and investment. if the reason i bought the oil company higher oil prices doesn't materialize, i really can't say i'll hold onto it because it has a swell dividend. for all we know, the only thing that would have saved the dividend from being cut is higher oil prices and without thex the idea for the trade is going the dividend. now when i want to invest in a company, not trade, invest in a company, i buy a small amount of it to start and then hope the market will knock down the stock so i can buy more at a better price. that's right. i actually when i invest want

the correction, which is always the way you want to be thinking if you're trying to start a new investing position. ideally the stock is down already from the highest because you don't want to invest at the 52-week high. there's nothing like a nationwide marketwide sale to get you better prices on your buys. trading is the opposite. i put the maximum on at the beginning because i believe the data point or event is about to occur. i never buy anything for a trade without that defined catalyst, that's the word we use, catalyst, hoping it will go higher as there could be no hope in the equation of buying a stock. i buy down, lower prices, when i'm investing. i cut my losses immediately when i'm trading if the reason i'm trading the stock doesn't pan out. that's why i like to say my first loss can be my best loss. it starts going against you in a meaningful way, perhaps to the decline of 50 cents is meaningful when you're trading, you may have a real problem on your hands.

i'm not kidding. when it comes to trading i'm an extremely disciplined person to the penny. i like to cut losses quickly and get over them quickly. my first loss is my best loss. all other losses tend to be from lower levels and bigger cost if i don't operate on this principle. anyone can feel the trade going awry but because of ego, pig headedness. they don't want to heed the thunder and stay in only to panic out at lower levels when the catalyst doesn't occur and whole reason to own the stock evaporated. please, don't fool yourself, cut your losses quickly when you put a trade on and it starts to go awry. there's an occasion or two when it's about to pan out and market doesn't know it but for the most part it does and you're probably going to be wrong. just a fact of life. of all of the studies i've made, the bottom line, never turn a trade into an investment, better to take the loss because believe

me, the percentages say you will most likely lose money and if you do so, do it earlier rather than later and save some bucks. stop fearing the big score and start fearing the losses because it is the latter that can wipe out juicy gains you have and then some. a stock rise can be quite seductive but chasing it doesn't always have a happy ending. i'll let you know when it's ever right to go after a hot stock. and corrections are as certain as death and taxes. how to prepare yourself for the inevitable. it's easy to get attached to holdings, but holding on too long can burn you in the end. when to cut the cord. stick with cramer. >> mr. cramer, absolutely love the show. >> we really appreciate you, man. >> during elementary school, learning so much from you. >> i know you hear this all the time, thank you, thank you,

thank you so much. >> this has been my best year by far and away in the market. i want to thank you for looking out for the regular guys out there. >> great to hear your voice and know that you're there for us. >> from our family to yours, happy holidays, cramerica.

>> we're going over the rules that have gotten me this point in my career where i can play for charity instead of trading at my own hedge fund, which i retired from. the lessons of the hedge funds are very much with me. i'm going over them tonight in a special show to help you with your portfolio. let me give i one always the height of silliness. if it weren't for that darn buy of -- then you fill it in -- why don't we use high max, i would have been up big or i would be making a huge amount of money in the market if only i hadn't left blank, let's use fireeye use against me when there was insider selling. it takes only one or two losers to wreck a portfolio. i devote my time analyzing my loser stocks than my winners. i recognize that stocks often telegraph declines ahead of time. loss control is the paramount

concern for all of those in the market because the winners, good stocks, they take care of themselves. take the loss before it gets hideous. don't buy into the notion that you can't sell until it comes back and then you promise not to do it again. how many times have i heard that one? that's how losers think. you need to think like a winner, not a loser. you want one of those people whom i answer with focus will you, on twitter. because you're unfocused and undone by the market. the flip side is true too. you don't have a profit. you do not have a profit until you sell the stock and nail it down. it's not a profit, people constantly confuse booked gains and real gains to take to the bank or of course get yourself a cashmere sweater in a nice department store with phony paper gains that are meaningless. they can be taken in a heartbeat by a tough market.

they don't want to pay taxes. i always tell people, if i could just rewind the tape to january of 2000 or july of 2007 when people were sitting on literally trillions of dollars in unrealized gains because they didn't want to pay the tax man, we would be able to drill this point home well enough people would respect it. gains not taken can be losses that will be taken. gains taken, never become losses. it's that simple. i stress this point because we have all been brain washed not to sell. somehow we think it's sinful and trading low. it's common sense cal to sell and logical to sell and may be the only way to really get rich in a choppy business. but it's just counter to human nature. when it comes to stocks to human nature, i think you've got to learn to counter it. it's so often hard to resist though. i get it. for example, i can't tell you how many times i've had my heart in my throat pounding, pounding because i didn't own enough

stock in arise gs market. i didn't have enough exposure. i can't tell you how often i felt i had to play. i had to be big in stocks because the market was going higher and going higher without me. you know that almost every time i had that feeling, almost every time, i had that i can't miss this action drama playing around in my head. you know what happened? that's right, i lost money. discipline is the most important rule in winning investing. we're doing winning investoring, what we're teaching, admitting that you missed the opportunity and it is already too late. i almost always feel like i've missed something right near the top of the market, the top of the move. when i was a hedge fund manager, are you sitting down for this one? i actually turned that sentiment into a profit center by actually betting against myself and the market when i thought i was missing the upside. the heart stuck in the throat feeling correlated with the tops of moves, not the bottom ones.

i made money saying there's that pain again, sell. i always remember the best time to buy when it feels most awful, not when it would relieve the insesant pain, given that the rally has invariably already occurred. you must protect against overtrading. trust me, there aren't that many great ideas out there to act on. the real great guys don't have that much ideas. you have to think about when you're prone to this. when i go on twitter, i'm always amazed how people want me to opine on a stock that just reported and want me to do it just in one headline alone. i find the business wires that report these numbers are almost always wrong in their quick takeaways because business is a lot more harder and complicated than the press release, which often -- anyone tried to go through a bank quarter knows, they can't capture the reality because the reality is in reality a jum bl. headlines that present stories about such and such a number be

better than expected are the types of headlines that always punish the quick draw mcgraw traders. and there's another metric that may be more important and i think you have to read the whole story and listen to the conference call, which part is most important? the portion right before the q and a when the company lays out its guidance for the future. that moment and not what the headline writer is responding to, is what you will see will make the stock move. that's where you get the accurate move from. everything else guesswork. we can't do much with just guesswork except get in trouble. so many of you want to get in trouble because periodically you want to be right. this point is very important, electronic trading you can move too fast and often many do. it's like your car goes too fast for you. if this is really a great opportunity, you will not miss it by taking time to inform yourself. believe me. before you do so, be sure you know what to look for and what matters. you might want to have a grid of

what all of the anl logs have been saying about what is about to occur. that way you won't be fooled by first move taken by people less informed than you are and less informed, believe me and most important, understand that the headline for many companies earnings doesn't even tell you how the company is doing on those key metrics. with oil, what are you looking for? production growth, not earnings per share. hotels? revenue per room, not earnings per share. airlines, revenue per receipt mail, not earnings per share. i've seen numbers only to learn the company is guiding down expectations later in the conference call or the key metric estimate wasn't beaten, even though the head line says it was. bottom line, don't let gains turn into losses and never trade before you fear the market going up without you or stock rallying off a headline that maybe might be wrong as they so often are. ed in california. >> caller: boo ya jim. i like injuyour opinion on deep

the money calls from six to 12 months in stocks you recommend, to avoid any market swings, what do you think of that? >> this is exactly what i want. ed is doing exactly what i want, 100 page chapter that i tried to cut back and couldn't. he's doing stock replacement and taking the risk out of common stock by declining and stopping the decline at a certain point and getting the upside, big percentage gains, you are the man, ed, you know what i have to say, you have horse sense. jacob in california. >> caller: hi, jim, booyah. i love the show. love the advice, it's phenomenal. as an initial or first time investor, what is your recommendation how many positions one should have without going over their head? >> we can only handle 30. as soon as we do more than 30, and we're pros devoted to this,

we get hurt. i think more than a dozen in an individual that may be as sophisticated as we are, is going to end up making mistakes. try to limit it. it's five with mad money, that's a good way to get started. larry in massachusetts. >> caller: jim, it was often said jack kennedy's greatest strength he surrounded himself with extraordinarily bright people. well, i wouldn't be in the game at all but for your teaching, many books, action alerts in the show. i have to tell you how much the folks that you've gathered at the street.com, brian ashenberg and regina and cliff and katie at the show -- >> holy cow, you're a close follower of the world i find myself living in. what's going on? >> caller: i'm a cramaniac, what characteristics made it a core holding such that the bad news

threshold are higher? >> what a great question. thank you for all of the nice things, everybody. here's what you look for. when everybody knows what you know, when there isn't a single analyst that doesn't love your stock, when you constantly hear that that company is great and ceo is great, you know what, it's long in the tooth. got fomo, don't trade because you fear a stock rallying off a headline that may be wrong. there is such a think as overtrading. i'm here to help you. corrections will come but you don't have to suffer when they strike. i'll show you how to prepare for those painful days. >> house of pain. >> getting too attached can be a portfolio killer. i'll explain why emotions and money don't mix. they are oil and water. plus, i'm taking on your tweets. stick with cramer.

♪ >> tonight we're going over the rules and disciplines i've learn and holy cow, four decades of investing. rules i wants you to know and want you to just kind of learn

by heart like i have. you know, not just like the usual twitter, 140 character stuff, this is real stuff here. a lot of people for instance don't think a correction is ever going to occur. get lulled in the market in good times and a lot of people get involved when there's been months of good times and when bad times hit, they are eager to pin blame or be shocked in disbelief, instead of expecting corrections and not being fearful of them. when a correction occurs many investors decided they want nothing to do with the market. the correction signifies that something is wrong with the market as a whole as if these aren't stocks of companies and therefore the market can't be touched. that is a really big mistake that is made constantly. corrections happen all the time. they particularly happen after big runs and to be anticipated. i learned this in the great peter lynch years ago, anticipate these.

you can't write off the market when they happen. i always like to tell the story and put things in sport analogies. of joe dimaggio after his own personal bull market. his 56 game hitting streak, when he failed to hit in games 57, should you have traded dimaggio and cut him? well, whatever. was he finished? is that smart thinking? same with the market. corrections are to be expected and accepted as a matter of course particularly after 56 great days on the market, you're going to get something like that. when they happen, they are not a reason to panic. they can be great opportunities. even as people insist that they are wrecked, that the market is done because the charts are bad, taking out the 200 day moving average, created a bearish crush, a death cross, behindhing cross, a winning streak with a couple of losses and we put on

or you read bears who come out of hibernation, like to be right that day. given that so many don't expect corrections, he's something that's common sense cal but avoided by many people i have met. lots of people wrongly believe in fully invested at all times. lots of managers think they are supposed to be fully invested every day. i have to tell you, this is nonsense. lots of time the market just stinks, you want to have cash in. not go in and out of the market, rick on, risk off nonsense. have some cash, pretty good. a lot of times there's nothing to do except have some cash. one of the chief reasons i outperform every manager in my 14-year run is that there were substantial blocks of time where i had a lot of cash. i was largely in cash including the 1987 crash when the market dropped 508 points in one day. from a much lower level than this one, actually 22.6% hit to be precise. cash is such a great investment

at times. even when it earns little or nothing as it has for ages. i regard it as a better hedge, a perfect hedge as opposed to shorting the market because the market keeps going higher than it did in 1999 or year before the great recession in 2008. you could face devastating losses as an overvalued market can stay overvalued and climb and climb and climb. i think cash may be the single most underrated of investments because nothing feels as good as cash when the market comes down. i know that from my charitable trust. it's one of the reasons why if you follow my method how to trade around the stock, you will know as the market spikes, i take stock off, sell a little, trim here and there. yes, to get ready and reposition myself for the next correction. close viewers of the show know i sell strength and buy weakness. when the time is right, i almost always have that cash to put to work because i believe so strongly in cash as an option.

if you don't raise that cash, here's what could happen. you might end up selling your winners to subsidize your losers, that's another common mistake people make. so many bad portfolio managers always sell the best stocks to hold onto the worst stocks. you can always tell when you see this pattern. you'll being reviewing someone's portfolio as i used to before my rules prohibited giving individual investment advice and it will be filled with junk. you will say, what happened to all of your blue chips, kind of stocks that can best weather tough times? invariably they say i had to sell those, i had to buy more of these other stocks, they kept going down. portfolios riddled with stocks that stopped working a long time. i have counselled enough professional investors in trouble to noel the first thing that gets sold are the best stocks because they can be sold. there's always a bid for the good stocks, any buyer willing to put up capital while the bad

stocks go and fold under any pressure. when they have a handful of good and awful stocks, they don't sell the awful ones because they are down so much. a typical alibi, they are going lower. do not subsidize losing stocks with winners. if you own companies with deteriorating fundamentals, common occurrence, sell the bad ones and reapply the proceeds. move on. don't feel bad for yourself. lots of times the circumstances have simply changed for the stock market. the company in which you have invested might do a lot of business in russia which would have been great before sochi but with the fight over ukraine, the profile changed. you may have to sell that for a company that's largely domestic or a slowdown in the economy has caused shoppers to stay away from expensive branded products and towards private labeling goods. one of the largest trends that blindsided many of the food stocks thought to be safe or

terrific drug company like pfizer, making fortunes until they went off patent. these kinds of stocks were so often kept because they had gone down and they bought more of the stocks and subsidize d losers with the sacrificing losing stocks. get ready for the correction. it's coming. have cash on hand. when it happens, don't sell the good ones to subsidize the bad. you'll end up with a terrible portfolio that won't be able to bounce back when times turn better. "mad money" is back after the break. >> cramer, you have super. you are awesome. >> i'm a first time investor. >> thank you for inspiring me to get in the game. >> this show is the best. i'm so glad you're on tv. >> i want you to know you have transformed me. thank you, cramer.

rules are a drag, aren't they? i hate rules, but they will keep you from getting blown out and hef you navigate the tougher

times when you least expect it. if you aren't prepared mentally, you won't be tough enough to handle these moments and flee about what is right to do and paralyzed with fear and self-doubt instead of mindful and open tune is tick. emotions have been to be checked at the door in this business. i hear people say i hope a stock goes up. or doesn't it have to go up? implying a question that's like doesn't a team have to win a game sometime? people, this is not a spoofrtin event. we're buying stocks that we believe should go higher because of the fundamentals and avoiding stocks where the underlying business is bad and getting worse. where should hope fit in? nowhere. people treat it as a religion and ideology, they play if they pray things will work out or chanting or maybe they will or they fall in love with miserable pieces of paper with the idea that love will be requaited. hope, pray, love, rooting, these

are all enemies of good stock picking. i can still recall the ringing in my ears get off the trading desk with karen cramer who would say what's the deal with memorex, i would say, i'm hoping it gets a big contract. she would scream. hope? we need hope to make this work? sell it and get me something where we have more in our favor than just hope. what a beatdown. many times she didn't even ask, just sold it after i used the word hope to see if i would buy it book. i didn't buy it back, i was hoping something would happen and once it was sold, i thought, well, relief. sometimes the stocks of good companies do nothing and you get frustrated and do want to sell them. good stocks at times can do nothing for ages, i remember when berkshire hathaway did nothing for ages. you have partners in your fund asking what you're doing with

their money? they don't want to hear you have stocks that aren't moving up at once. individuals can sit on stocks as long as they want. unfortunately when i cancel patience, many individuals get antsy and want a gopro or netflix, want it now. some of the best stocks require incubation, do you know how patient i was with intel. for 18 months i watch them do nothing, paint dry. but i believed because only had a few partners and none needed to know how much they were worth. a common strain asked how i was doing. when partners hounded me daily, i would never have held on to intel that long. lots of stories take a long time to incubeate and develop. when you buy a stock and recognize it could take a long time to turn, market as such in

your minds so you don't get tired and give up. here's something important to remember, stocks stuck in the mud a long time tend to romp like thoroughbreds when they are let through the gate. do you have the patience? if not let someone else invest your money. one of the most despicable traits of amateurs and professionals is second guessing. you make a call and then it suddenly has a patent issue that causes it to get hammered or sell dupont before it's sent soaring. you're filled with self-doubt. that's nonsense. get it together. the market requires you to have the right head on at all times. you have to be ready to see the ball right for the next pitch. there's no time to get down on yourself. do that for fantasy, if you cut brady or something. if you want to be constructive, bracket time at the end of each month or end of a quarter to assess your strategy and stock picking abilities, but to second guess your strategies to put

yourself in a loser mindset, i want the pain felt. i felt one of the younger people in my office made a mistake costly to me, i made them wear the symbol of the stock they screwed up on as a post it on the forehead for the day. i even sent him outside but insisted any time spend saying if only i is time that keeps you from getting the best stock. karen thinks men have far more than women. i'm putting it out there. she did teach me to come in without the mental baggage of a screw-up. here's the bottom line. this business is not about hope. don't root for your stocks to go hire. pick shares in good companies and they will unless circumstances change dramatically, cause you to sell, they'll go higher. but be patient on the good ones and keep the self-doubt to a minimum. clear your head. get out there immediately and

find out the next big winning idea. there's just no roof for should have, would have, could have. stick with cramer.

>> favorite part of the special we go for what you want. that's right, we got some tweets you've been sending me at #madtweets. our first tweet comes from mark richard, auto dividend

reinvestment or take cash, a huge percentage of gains people have in the stock market over the years come staktly from dividend reinvestment. this is a new brainer and very few free lunches in the business. compounding is the secret beyond great wealth, reinvest. wants to know who first came up with the way you say bristol meyers that happened to be a old broker, when karen cramer and i traded together we had a broker that recommended bristol meyers and said it that way. i decided, that must be the way it's really pronounce. let's take our next tweet from at krygcraig boo, if you do nott to buy more of that stock lower, you should just sell it because if you liked it higher i should love it lower. the answer is buy more of the lower one or get rid of it.

up next, at no to l, whatever asks, at what percent for profit should we sell shares? this is really important. there's no firm rule. what i like to do when a stock goes up about 50%, i like to sell some of it. and then a little bit more and sell more. but the ultimate goal for all great investing, you play with the house's money. that's the way to do it. always try to fight to get to the point where you're playing for the house's money. and yes, stay with cramer. >> mr. cramer, absolutely love the show. >> we really appreciate you out there, man. >> boo-yah from my kids in elementary school. >> i know you hear this all the time, jim, but thank you, thank you, so much. >> this has been my best year by far and away in the markets. >> i want to thank you for looking out for the regular guys out there. >> great to hear your voice and know that you're there for us.

>> from our family to yours, happy holidays, cramerica.

i'd like to say there's always a bull market somewhere, i promise to try to find it just for you on "mad money." i'm jim cramer and i'll see you next time. lemonis: tonight on "the profit"...

it's a small space. tonnie: it's been challenging. lemonis: ...a tiny cupcake shop with a big idea. tonnie: you walk in, you pick your cupcake out, you pick your toppings. lemonis: tonnie's minis should be raking in the dough, but it's not. there's $134,000 worth of debt. his biggest investor is his wife. erenisse: it's to the point that i'm not giving any more money. lemonis: tonnie's bakery is cramped and chaotic. sales are down. right now, we're losing money every day, and so i'm trying to stop the bleeding. and the debt keeps rising. erenisse: i'm just upset, 'cause i didn't know about all those people that we owe money to. lemonis: if i can't find a winning recipe for tonnie... we're closing the store. lauren: oh, my god. this is ama-- [ glass shatters ] lemonis: ...his relationship