tv Mad Money CNBC December 28, 2017 6:00pm-7:00pm EST
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>> i don't think you do a full position in auto nation, you work into it >> they don't want any position in auto nation thanks, carter, for sitting in today, it was a pleasure i'm melissa lee. see yo my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends, i'm just trying to make you some money my job isn't just to entertain you but to educate and teach you. call me at 1-800-743-cnbc or tweet me @jimcramer. we too often invest for the day. i hear people talk about what is working, and in the old days when late great mark haines
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ruled the mornings around here, each time i cohosted, introduce me as reverend jim bob cramer from the church of what's happening now. fun back then. everybody running personal hedge fund understanding that stock could be here today and gone tomorrow. everybody was fine with it those days are long over if you recommend a stock for trade, say buy it today for analysts meeting and sell tomorrow, always will be a youtube video kicking around that shows you liked the stock, never gave the sell call we've gone beyond that taking it to the next level. introducing you to the concept of suitability what stocks fit you, what investments are right for you, not today or this month but age
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and temperament. first heard of in goldman sachs. buying for myself and individuals for half a decade before that. watching financial news network between classes at harvard law school predecessor to cnbc. had research reports about stocks on a catch as catch can basis. nostalgic to look back at what i would do after i found a stock i liked. ask the kind librarian for a microfiche of the filings. plastic you stuck into machine and read the file and if you were lucky, only six months old. everything i did back then is online, instant and updated. imperfections in the market back then were legion now everybody can know everything more on that later i would spend all week trying to find one stock that i thought
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would work, would be good for one week, anyone who wanted to invest could take the idea and then run with it then take my answering machine and give you a 20-second rap on that stock, answering machines can you imagine? some companies made them -- all those jobs wiped out by cell phone right? answering machines answering services, talk about jobs that are not coming back no matter who is president. hello, this is jim i'm not here but like the chart from people express. long since bankrupt airline. best one, monolithic memories. smoke show of company run by guy two decades later helped save tesla. he was last ceo before elon musk shot up like rocket that week and big bid from advanced micro
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devices far down the road. best cramer is not at home call his machine hit i ever had and believe it or not jim is not hom was rallying cry for people calling, hoping i wasn't home. get the tip without having to deal with me not long after i got the job, one of the officers called me, got the machine with recommendation told me to call him. do you have any idea what suitability is no he introduced me to the concept. did i consider many of the people who called and got answering machine might not be ready for stock of the hottest semiconductor company in the land and recommending it without a sense that it was right for them i thought stocks were caveat
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emptor situation can't take stocks back no guarantee what's the deal. explained that before you recommended a stock you had to know what the person wanted out of the stock if the stock was right for them, their tolerance and risk he said, yeah, monolithic memories, not right for anyone other than bungee jumpers and k-2 climbers, something like that start there. ask yourself, what is risk tolerance? how much risk do you want out of a given stock? peculiar pieces of merchandise buy a car, it's not worth as much when you leave the lot, moment you take it off but warranties buy a house, could burn down next day but before you buy it, binder of insurance to get your money back clothes, devices, you name it can be returned. but stocks, you buy a share of
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nike and next day goldman sachs downgrades it and foot locker says there's a slowdown in jordans, you can't go back to broker, hey chief, never told me this out 6 grand, i want it back. caveat emptor. would have been incumbent upon the broker to recognize that buyers know this could happen. maybe shouldn't have been recommending stocks to begin with but can't take stocks back to get the same price you paid. no really insurance. expensive put underneath that has to be renewed constantly maybe. suitability, concept is incredibly important that's why for the next hour you're going to learn about a way to measure your own tolerance versus a variety of factors. these days with electronic brokers, no real protection,
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just a sign to say you get it. you know what you're getting into and accept it bottom line stops here by the end of this show you will know what suits and what doesn't no matter what your age or style. caveat emptor? no, just buyer be a little bit more aware of what you might be committing hard-earned dollars to when you pull the trigger on a buy. ann marie in new york. >> thanks for taking my call >> of course >> caller: can you talk a little bit about trimming our profits i get eager and start trimming up 10% or 20%, which i know you say is high quality problem. can you talk a little bit more about it >> if you kept doing it, miss out on some of the greatest stocks in history of man you may own. move that up a little bit. 25% or 30% and only a quarter
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position up 60% to 70%, this is a change from old days, then sell a little more. but then let it run. if it comes back, buy some don't want you to lose a great opportunity. unless the story changes then it's. >> sell sell sell sell sell sell sell. >> immediately leto in texas. >> caller: how you doing question is early retiree and anticipating a possible market correction in the near future, should i allocate the stock index fund now from stable income fund or wait until after the market has corrected >> if you're in retirement stage, want you to own equities but not as much exposure not more than 50%. that's a lot if you're retired own some because people who retire tend to live 20, 30, 40 years longer
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than they thought. take cash out, not necessarily bonds. but put money back if the market craters. otherwise you'll be fine, let it ride marlo in illinois. >> caller: you talk about index funds. what is difference between them and etfs and examples? >> there's not much there. it's different i always default to warren buffett. buy the vanguard index fund, lowest cost. very easy to get to. just want to go with buffett, greatest investor. why? warren buffett, what am i going to argue with him? never a great call no more excuses. helping you form necessary investment strategies you need in all stages of your life young to old, meet you where you are and take you where you need
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to be. tonight, kick off in the crib forget bingies, two stocks to be buying give newborn much needed start teenagers, important lessons from them. and from 20s to golden years, definitive guide where money should be sitting at any age stay with cramer >> announcer: don't miss a second of "mad money," follow @jimcramer on twitter have a question? tweet cramer, hashtag #madtweets send an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc miss something? head to madmoney.cnbc.com.
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welcome to a special show about you. about knowing what you can and can't do because it's not right for you welcome to a special show about suitability. the first kind of suitability we'll discuss is age suitability. start with kids. particularly infants "mad money" has been on so long kids born in their teens and if their parents listened to show when it started would already be on the way to great wealth parents, grandparents, listen up you can give all sorts of things to families who just had babies.
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i want you to open up accounts for them or give shares of stocks to start the process of saving that you have to do here's my commercial for what everyone seems to have come around to, index funds come to period where all stocks traded together, and seen managers let go or fired because they can't beat the market take a couple hundred dollars and buy shares in index fund i'm partial to the 500 stocks. as companion any total return fund with broader array of stocks mix of both is good start. people ask this all the time, total return and s&p might have higher growth, junior growth fund can be nice augmentation buying for instant with his or her whole life ahead of him.
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can compound over time and money can build upon itself. why am i watching show about stocks if he's talking about index funds? i could talk about them every night but not interesting show comparison we hear of index funds is actively managed funds. this show is geared to people interested in their money and want to be more involved and make it grow or are curious and want to learn about stocks i believe you can put together a portfolio yourself that can be better than most managers and funds but they can coexist i wish the prosecute la tiesers about index funds weren't so -- about everything else. i've had a career picking stocks better than the market, so many at goldman sachs would never be
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satisfied with good enough pick two, one with dividend to reinvest and might be increased and buy more with it we hear dividend aristocrats companies with long histories increasing i like that. 3m, procter & gamble, kimberly clark, texaco. any of those f.a.n.g., facebook, amazon, netflix and alphabet formerly known as google. hence the g. facebook is rapidly growing. you provide content and they provide the ads. brilliant company, deep bench. amazon, $4 trillion market for retail in the world and amazon a traction of it
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netflix intuitively recognizes what you want when you want it game changer why do i still like alphabet played out just the moment where you want to buy something, advertisers love it. passel of people working to invent something new to complement or complement search and wemo in autonomous driving vehicles about growth seems commercial to do what i want done but given how poor income growth has been for people in this country, important to augment of savings side of the ledger no time like the present gold and silver are terrific insurance to any portfolio discuss this more in the show. highly unusual but blessed by me idea is buy gold or silver coins
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for people or pieces of the metal. i put slivers of kids for dealer, pretty much forgotten about them may or may not increase. polar opposite of growth or income stocks. don't do anything. but if inflation comes roaring back, nothing holds back better than mansions, masterpiece art and precious metals. if you do this, put in safe place, not mattress or hole in the ground safety deposit box is my style more "mad money" including most valuable asset, time action you need to take today to set yourself or kids up for financial success. been the source of many of my greatest investing ideas of all time you have the same resource probably but are you paying attention? money should change with age stay with cramer
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they're best for you suitability for newborns but what about the kids? this is when you make your move, decide you're going to get them involved in what stocks are. pieces of companies they might like let's be honest, couldn't explain to a kid what stock is to save his or her life. not how i grew up in my house. as much as i loved sports and tickets for '64 world series, 6 1/2 up with 12 to play blew them all and didn't make it in my house stocks were supreme. father had gotten a tip from brother who knew a stockholder who played tennis to buy national video which could have made it if started now as facebook live show total bust that cost us fortunes bring home the "philadelphia bolt" afternoon edition and give
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me closing section look up prices and anticipate based on moving averages how the stocks were doing and what would do next. gained momentum and lot of times i only knew the stocks by abbreviations in agate type. but i kept the ledger. xerox, national video. texas gulf sulfur, host of other companies that have disappeared but been acquired and hanging out in trade and airline stocks because suckers always buying those. eastern. household names. i liked the stock picking process so much, i got fifth grade class involved pick stocks and keep track of the closing prices for a week. problem is i was working the exact opposite of what i should
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have been doing. metaphorically what i was doing is still done, picking by how fast they're climbing and back away if they slowed, momentum investing. "investing." what i should have done is looked at companies i knew and asked to buy shares in them. what would have been right and what was wrong in the picture i presented. compared to goofus and gallant in the hi-lites magazine pop i would later learn had no idea what national video was or did. find out more in google now than from jack the broker then. national video made picture tubes. old days when you had a problem with the television, usually the tube had blown technology left them behind and went bankrupt and closed doors about five years after he bought
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it but gone straight down for about five days after he purchased it averaged down too many times to tell many a silent meal because of the decline in stock host of stocks to choose from in 1960s. most not that good according to averages but there were dividends to be had and what we needed was income idea of picking stocks because going up was antithetical to buying stocks -- many defense contractors, just beginning lyndon johnson's buildup to the vietnam war efforts. a lot of fun but in retrospect i learned most about stocks from two 3m board games, acquirer and fabulous game called "stocks and
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bonds. father sold games back then. this was fantastic game about accumulating wealth through risky or -- stocks could hold up to this day. let's go back to time. think about what i could have done first when you are a boy or girl, you play with toys would have been a natural to buy shares in mattel or hasbro if you look at financials not asking kids to know what it means to own shares in companies but saying it's a way to teach kids that company can be owned by public and they can own a share. they know toys i bet met hasbro over mattel can you imagine if father bought 3m instead increased dividend more than 25 years. quite a statement. just look at spine
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had a box of cheerios on table, could have bought general mills. fantastic stock. disneyworld, it's not that factor or how many people cut espn off in the end, it's intellectual property. library alone should make you want to own stocks theme park johnson and johnson were staples in the house wiped my house with kleenex. things not even taught, embossed, imprinted. fast food. mcdonald's may not seem like something to invest in because of the quality of the food ceo is committed to making it more natural over time would be upended if switched policies in day, burger cost a fortune and crater industry for
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years. buy a name brand put it away. stock won't always work out. think of what you liked when you were little or your parents liked when they were little. if it trades, you more than likely have a winner bottom line to get kids to investing, brand name, this not this year's version of national video. something they can see and hear and touch and even like. own it stock won't always work. but think of what you liked when you were little. remember that you may have a long-term winner on your hands go to judy in texas. judy >> caller: hi jim. how are you? >> good, how are you >> caller: great thank you. my son william has been very interested in buying stocks. he's calling with me now and my dad gave him money to purchase stocks.
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first purchase how we look at what stocks to buy. where to start >> common household things that he and you see and what you want to do is figure out how much money you want to put in it and put a quarter of it in quarter because if market goes down immediately, say this is a sucker's game, don't want to be in it. put in quarter, wait another three months, another quarter, then hopefully a selloff and ready to buy if not rest of the money to work by end of the year but in household named brands that everybody knows to sink teeth in carol in florida >> reporter: hi. i read and enjoyed "confessions of a street addict" and kudos to hero mrs. cramer >> she knew how to trade better than anybody in the world.
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>> >> caller: gold as hedge against the market and monetary system. >> cash is best hedge against the market monetary system, you're right, gold i like physical gold, gold coins. if you can't afford them, g.o.d. will ork if you buy gold bullion don't keep in house but safety deposit box but you're dead right about the idea stocks don't need to be abstract, they're real you can touch, taste and play with them. with kids often the best place to start still more "mad money" ahead investing advice from one of the wisest groups around, teenagers. plus a serious piece of investment wisdom i think is dead wrong and taking your questions tweet by tweet "mad tweets," stay with cramer for your heart...
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to buy i'm going to let them tell me. people who watch this show have been huge beneficiaries of innate wisdom of my two daughters. why do i like domino's did taste like cardboard before reformulated it. liked the advertising. but my kids like the trap and joe's. most pizza is local. i liked it so i recommended it but not a crown jewel but the technology behind dpz. my kids like yours most likely hate talking on the phone. they think it's for losers but apps, they love them discovered domino's app, sold. no talking to people to get the order wrong, worries where the pizza is in the process.
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two things the local joints couldn't do. and no cheese option for the vegetarian without asking twice. are you sure kids don't want to fuss with money either i never minded phone, patient about arrival, never cared about the interchange. not like the target audience that's why i called them a tech company that sells pizza how i found apple, youngest daughter asked for second ipod not because lost it as i accused her but wanted another color fashion accessories. personal computers my various employers never embraced apple but kids are kids wouldn't be caught dead without apple brand. when computer comes out, if it improves presentation of
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netflix, they want them. want them despite the cost iphone is more controversial didn't like the plug change, ear buds, but don't want the samsung. part of the apple ecosystem, much droided by analysts when kids beg me for samsung, i might say different things about apple than i currently do. your kids won't know much about income or power of compounding but will know how guilty they feel about the amount of phone charges they rack up you think i've been recommending verizon for nothing? cash cow that your kids turn you on to that continue to work even with little growth how about this google it dad. that's how i found out about google, now alphabet
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when i heard kids couldn't google something in school because it was cheating, enough for me doing senior thesis at harvard, mindless name dropping, had access to librarians at houghton library. job to look up things, find out things you wouldn't know where to begin i wonder what happened to those jobs kids are not into sports get news from iphones and entertainment from netflix, home-made content? simple interface desire to watch what they want all of them. we signed up to watch things together f.a.n.g. isn't all their creation i figured out amazon but facebook, i went to harvard. when you were a freshman, got a book had everybody's nikt it.
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facebook is derivation of all of it she went to instagram, facebook made it so you didn't know it was part of something that old people discovered. inundated with red hot chili pepper merchandise, it's notice an ad, it's just a link dad? but mark zuckerberg is only one that cares about the user experience that works like that. chip oat lie, they love the salads vegetarians. youngest returned after food sickening incident but did takeout because didn't want people to see her. nothing is perfect but their picks will do. what if not any good likes a device that fits in your head and takes pictures or on a
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wrist and measures steps it happens go pro and fitbit they have lives ahead to make that money back if it's a screwup. beautiful thing about teen investing, you can lose it and no one may notice in the end later in real life like me, consequences bottom line is for now you can learn from your teenage children trust me, invest with them and you won't regret it. "mad money" is back after the break. ♪ the moment a fish is pulled out from the water, it's a race against time. and keeping it in the right conditions is the best way to get that fish to your plate safely.
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bacteria can multiply to high enough levels that even cooking it will not destroy all of them. it's definitely the most important thing in my business. how fresh is the fish? where it comes from? how it gets here. the more i know, the better. sometimes the product arrives and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred. we took our world class network and we developed devices to track environmental conditions. this device allows people to understand what's happening not only with the location of that asset, but also if it's too hot, if it's too cold, if it's been dropped... it's completely unique. we ship fish, beef, poultry, vaccines, insulin. this is about monitoring and protecting everything we ship.
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i catch all this amazing, beautiful fish and then once it's out of my hands, i have no control over what happens to it. if you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. it's really all about the network. you are looking at trillions of transactions a year. not too many companies in the world can even scale to that type of volume. who knew a tiny sensor could help keep the food chain safe? food has to be fresh. it's that simple.
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so how about the rest of our lives? what are we thinking about suitability then sadly from here on in, things get less and less suitable not initially. in college don't put any away at all, costs too much. i tried to get people to buy a share or two but college taps you. it's hardship to contemplate savings. but out in the real world it's
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imperative to save through 401(k) through work or self-directed ira. i prefer the latter, you don't have to take what company forces down your throat and you pay a fee. but individual stocks, too much risk to put together a portfolio of them. minimum, first $10,000 beyond what you have from first 20 years into index fund. s s&p 500, my favorite some argue with that see it on twitter. but possibility of one bad stock hurting you in your 20s is too risky. with index no one stock or sector can do that i do like stocks i like you to be diversified, why we play that and we created
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a club show you how to invest i say involves my charitable trust because can only invest when i haven't mentioned the stock, restrictions to protect you. in-depth work on the stocks we talk about on this show and almost daily updates about a lot of them, thing i created is a way to go. i set it up because i talk about buying homework. you need to buy a stock but then keep up with it. when i earlier discussed how hard it is to do homework, harvard business library, month-old research and microfiche so easy now, i had to scrap one of the earliest tenets, no longer a couple of hours a week. you need to read the conference calls.
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google articles galore, will get sick of the process quickly. you get information along with charts i would have only dreamt off. or read what we write. whatever makes you feel comfortable to take charge of your money want confident, not overconfident. good manager of money or good client don't have preference. at this stage it's important to know thyself in terms of risks until you get to this age, take all the risks you can whether or not you like it. 20s all i can do is ask you to think about what you will do in a selloff. buy more or cut and run? do you have the wherewithal to take a -- can you handle if stocks go down crucial questions only you can
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answer i would like you to take more risk in individual stocks with growth characteristics once you put away the $10,000 my preference. but hate for you to commit more than 20% of your mad money to individual stocks. not my preference. perhaps add a fund with higher dividends than the s&p 500 but not too quick, not until 30s only in 40s introduce bonds. by this time should have been able to put enough away that bonds, even lower earning bonds will protect some of the capital. in old days heresy to suggest wouldn't by 40s. problem is two-fold. many people running fortunes and lack of good fixed income alternatives that don't entail a ton of risks favor higher yielding stocks to
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most bonds but as you age, you can and do get your money back. enter your 60s, could be up to 60% in bonds and take them up 10% each decade as i mentioned earlier. but that brings us back to the notion of suitability. if you can't handle the risk, if you think the stock market is not as legitimate because prone to deep valleys or overgrown threats, you have to decide yourself if cashing out or taking stocks to minimal levels is right for you bottom line, it's your life, not mine get comfortable with what you can live with. but risk until your middle years should remain a friend stay with cramer ♪
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♪ [lance] monica, it is absolute chaos out here! gale force winds, accumulations up to 8 inches... ...don't know if you can hear me, but [monica] what's he doing? [lance] can we get a shot of this cold front, right here. winter has arrived. whooo! hahaha [vo] progress is an unstoppable force. brace yourself for the season of audi sales event. audi will cover your first month's lease payment on select models during the season of audi sales event. we're drowning in information.
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here at "mad money" we love to see families investing together, often locking in best of breed stock at early age can set you up for life. wealth can grow with your age. kicking off this edition of "mad tweets" with cramerica families. get them started young i like that. that kid has horse sense i don't know whether -- charts in there maybe likes it too holds up under much pressure next a tweet, david, awesome time at phillies game on this day a few years ago. sat next to you and your dad that's terrific. pop and i used to love to go to
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games all the time i was vendor for the phillies. mike schmidt my favorite player. sometimes come across families cadre to the show, kids with horse sense. you think you know ceos? no one is going to stump @pounds, poodle's kid. >> facebook. >> mark zuckerberg. >> twitter >> [ inaudible ] >> and favorite for opening bell >> jim cramer. >> that's it i mean, that is, should be a show of its own. unbelievable -- i like arrow by the way. facebook too twitter, maybe a change at top -- just kidding. next up, patrick tucker, serious
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question are accounting issues pretty much always because of some level of shadiness or can honest mistakes be made i may have to to do a segment on this honest mistakes can be made and lot of times my rule will keep you out of situation where there's honest mistake and stock takes off. other cases it's not honest and you lose everything. going for maximum risk situation as opposed to minimum. i can't really tell from the outside which is which, which is why i'm cautious tweet from mr. samuels brother is 26, no 401(k) ots job. should he open roth or ira i prefer the roth. and tweeted you say you prefer
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individual stocks to index do you have a write-up i prefer a index for first $10,000 and use as retirement vehicle but also think you should pick some of the best stocks that would be etf you're watching the show, doing the work, let's make money not denigrating mutual or index funds saying let's own stocks as "mad money" situation. next tweet from c.s. boyles. just bout your book. haven't written in a while i like "get rich carefully" bah it's in-depth look at how to pit stocks against each other and mistakes i've made so many at times detail them all embarrassingly so you can learn from them
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eric wolfe what percent is heavy? 10%. 10% shorted i sense something could be wrong do your work, figure out if shorts are wrong, often are. but that's the percentage. coach beardson what do you recommend to keep squirrels out of the garden? i have triple fence, boxes, underneath more fence and chicken wire, whole shooting match. they don't get in. but other box they get in and i have to throw stuff away i spend too much time thinking about fencing. it is a preoccupation of mine. it would be great if you could shed light on the age tarted 401(k) for the folios. i think just that others are
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better better way to look at it much smarter and more modern way than trying to assess what may me in age-related fund stick with cramer. mr. cramer, absolutely love the show >> we appreciate you. >> boo-yah. >> boo-yah. >> i know you hear this all the time jim but thank you so much >> this has been my best year by far and away in the market. >> i just want to thank you for looking out for regular guys out there. >> i'm trying to teach people to be better investors, doing my darned best. the goal here. >> great to hear your voice and know you're there for us pre-shaken sodas. like having their seat kicked on an airplane. being rammed by a shopping cart. sitting in gum.
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and walking into a glass door. but for everyone else, there's directv. for #1 rated customer satisfaction over cable, switch to directv and for a limited time get a $100 reward card. call 1-800-directv. your new brother-in-law. you like him. he's one of those guys who always smells good. his 5 o'clock shadow is always at 5 o'clock. you like him. your mom says he's done really well for himself. he has stocks and bonds. your dad wants to go fishing with him. your dad doesn't even like fishing. you like your brother-in-law. but you'd like him better if you made more money than he does. don't get mad at your brother-in-law. get e*trade. your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782
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nooooooo! yes! amazing speed, coverage and control. all with an xfi gateway. >> welcome to the shark tank, where entrepreneurs seeking an investment will face these sharks. if they hear a great idea, they'll invest their own money or fight each other for a deal. this is "shark tank." ♪ a stay-at-home mom who began her business in order to support her family. ♪ my name is kiersten and i live in los angeles, california, with my husband and my 12-year-old son and my 8-year-old daughter. i left my job to stay home with my kids, and then my husband lost his job, and so we desperately needed something to help pay the bills.
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