that straws. you should like ea. >> man crush >> i think that's accurate and i do like take two the quarter scared people, the guidance scared people but the valuation is compelling. >> i'm melissa lee, thanks for watching see you back here tomorrow ainga at 5:00 for more make you money i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to save you some money. my job is not just to entertain but to educate and teach you so 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 the

late great mark haynes ruled it was one back then everybody was running their own personal hedge fund. those days, those days are long over and if you recommend a stock for a trade, even if you say buy it today for the analyst meeting and sell it tomorrow, there will always be a youtube video kicking around that shows you like the stock but never give it the sell call. tonight we are taking it to the next level where i introduce you to the concept of suitability. basically, what stocks fit you what investments are right for you. not for this week, for this month, but for age and

temperament. i have been buying individual stocks for myself and for others for half decade before i got to goldman in '83 that w when i could, i would run over to the harvard business school library, where they had old research notes it is so nostalgic to look back at what i would do next when i find a stock i liked i would ask for the microfiche, these were little plastics the imperfections of the market back then were legend.

i would spend all week trying to find one stock that i thought would work, one stock that would be good for one week where anyone who wanted to invest could take the idea and run with t and i would take to my answering machine and give you a rap on that stock. with all of those jobs wiped out by your cell phone, answering machines same with answering services i would say hi, this is jim, i'm not here right now but i like the charts and the resent express. my best run, a smoke show of a company of a red hot stock helped safe tesla back when that was struggling last ceo between elon musk ended up with a big bid, and

that was far down the road it was the best cramer is not at home caller machine i ever had and believe it or not, jim is not home became a rally call people would hope i wasn't home so they could get the tip. one them at the firm got the machine. and he asked me if i knew what suitability was. so he introduced me to the concept. he asked me did i consider that many people who called me and got my answering machine might not be ready for the stock of semiconductor. and i was recommending it without a sense if it was right for them we all know that unlike vacuum cleaners, you can't take stocks

back they come with no guarantees so what is the deal he explained to me, before you recommended the stock, you had to know what that person wanted, what he with theanted out of thk you wanted to know if the stock was right for them he said monolithic memories, wasn't the right for -- long time ago so let's start there tonight i want to ask yourself what is your risk tolerance. how much risk do you want out of a given stock. stocks are peculiar pieces of merchandise when you think about it you buy a car, and there are warranties clothes can be returned, devices, phones, pcs, washers, dryers, you name it. but stocks

you buy a share of nike and the next day goldman sachs downgrades it. you can't go back to your broker and said, hey, chief, you never told me this could happen, i am down three bucks in 2,000 shares i am out six grand i want it back now it would have been incumbent on the broker back then if they recommended these things could happen you get the point. you can't take stocks back and get the stock price, the same price that you paid because there is no real insurance although you could buy an expensive put underneath and has to be renewed constantly suitability, the concept of suitability is incredibly important. that's why for the next hour you are going to learn about a way to measure your own tolerance versus a variety of factors, because these days with the electronic brokers, there is no

real protection, just a signed form that says, you get it you know what you are getting into and you accept it tonight, the bottom line that stops here by the end of the show, you will know what suits you or doesn't caveat emptor? no just buyer be aware of what you might be committing your hard-earned dollars to when you pull the trigger on a buy. ann marie in new york. >> caller: thanks for taking my call can you talk to us about trimming >> it is a high quality problem, but you would miss out on some of the greatest, greatest stocks in the history of man that you may actually own what i suggest you do is move that up a little i don't think you should start selling until you are up around

25% or 30% when you are up 60% or 70%, then you should more. but then you got to let it run and if it comes back, you can buy some i don't want you to lose a great opportunity unless the story changes. and then it is sell, sell, sell. immediately. marlo in illinois. >> caller: you talk about index funds, can you tell us the difference between index funds and etfs and give us a couple of examples >> not much there. what i want you to do, i default to what warren buffet says, he says you should buy the vanguard index fund, easy to get to i want to go with warren buffet. why? well, what am i going to do? argue with him never a great call no more excuses. i am helping you form the

necessary investment strategies you need in all stages of your life from young to old, i am going to meet you where you are and take you where you need to be kicking things off by beginning in the crib. forget binkies, here are the new stocks that you should buy to give a newborn a head start. teenagers need to learn, but most important investments for them where your 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, #madtweets send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc miss something head to madmoney.cnbc.com.

welcome to a special show about you. about knowing what you can and can't do because it is not right for you. welcome to a special show about suitability. the first kind of suitability that we will discuss is age suitability. i want to start with kids. particularly with infants. there are kids who were born that were in their teens and if the parents listened to the show

when they started, they would be on their way to big wealth i want you to open accounts for them or at least give them shares of stocks so that from the earliest moment you can start the process of savings that you have to do here is my commercial for what everyone seems to come around with the notions of index funds. we have come to the notion of all stocks traded come together. so you can take a couple of hundred dollars and buy some shares in the index fund i am partial to the s&p 500. as i companion, i like any sort of total return fund that is a broader array of stocks. people ask me this all the time. total return and s&p 500 your broker or the broker site you use, might have some sort of

junior growth fund you are buying for an infant that has his or her life ahead of him you might be saying, why am i watching this show about stocks if all this guy comes in and talks about index fund more important is the kind of investing that i am talking about. the comparison we hear about index funds is to actively manage funds this show is geared to people interested in their money and want to be more involved in making it grow i believe you are build a portfolio yourself i am perfectly about the notion that they exist. their lack of flexibility is so stunning, yet i have had a career of picking stocks better than the market and i saw so

many investors when i worked at goldman sachs who would never settle for average and didn't. so let's give both a try pick two one with a dividend. each year dividend might be increased and you may be able to buy more stock with that dividend we hear the term dividend aristocrats. which funds come to mind that we have liked historically? 3m, proctor and gamble kimberly clark then fang. why these? i think the facebook is a rapidly growing site where you provide the content and they provide the ads. amazon, there is a 4 trillion

market for retail goods in the world and amazon has a small fraction of this netflix, intuitively recognizing what you want when you want it why do i like that alphabet? it dominates surge which happens to be the moment you buy something. there is people working to invent something new and these are just examples. i also think that given how poor income growth has been for people in the country, there is a saving side, there is no time like the present you know i believe that gold and silver are terrific insurance

components a highly unusual yet totally blessed by me idea is to buy gold or silver coins for people. or pieces of gold or silver. i bought slivers of silver for my kids by a dealer, and i forgot about them. they may or may not increase in crazy times where inflation could come roaring back, there is nothing that holds up that scenario better than precious metal. remember to put it in a safe place. a safety deposit box plenty more "mad money" ahead. including more about the most valuable asset in the stock market time then they have been the source of some of my greatest investing ideas of all time. you probably got the same resource are you paying attention i will clue you in

and unfortunately, i don't look anything like i did in my 20s. your money should look important with age too i will explain how. >> i want to talk to you >> mr. cramer, i want to tell you, you are absolutely positively fantastic. >> thank you for helping with not panicking with times like this the average investor, you cater to us. >> i am not going anywhere you shouldn't either we will get through this together >> announcer: cramer has your back call 1-800-743-cnbc and let's take on the market together.

- i love my grandma. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life.

we are going over knowing thy self what about suitability for the kids what do you do for them? this is when you make your move. you decide you are going to get them involved in what stocks are. you couldn't explain to a kid what a stock is. that is not how i grew up in my life as much as i loved sports, we had world series tickets in my house, stocks were supreme. you see, my father had gotten a tip from his brother who knew a stock brother who played tennis to go buy shares of a company called national video. it was a total bust that cost us

fortunes and he would give me the business section i would look up closing prices and i tried to anticipate based on moving averages based on what stocks were doing. a lot of time, i knew the stocks by their abbreviations and their agate type i kept a ledger to see scm, ibm, polaroid, xerox, national video. a host of other companies that have disappeared i also had a lot of airline stocks eastern, national. they were household names because of advertising i liked the stock picking process so much, i got the whole fifth grade class involved we would all pick stocks for a

week to see who would make the most money the problem is i was working the exact opposite picking stocks by how fast they were climbing. that is called momentum investing. what i should have been doing is picking the stocks of companies that i knew and asked to be able to buy the shares in them. so let's go over what would have been right and what was wrong anyboin the picture i just presented which would have been prepared to guffus and gallon guffus would never have taken a tip from his brother who played ten with him you could find more in google now. national video made picture tubes. when you had a problem with your television, it was usually

because the tube inside had blown. the technology left national video behind and it went bankrupt and closed it doors after pop bought it. there was many a silent meal because of that day's decline in national video stock there was a host of stock to pick back then there were dividends to be add and what we needed more than anything else was number me, the idea of picking stocks because they were going up was antithetical at least i bought the hot ones they made sense. many were defense contractors. it was a lot of fun. but in retrospect, i learned the most about stocks from two, 3m board games.

acquirers and a fabulous game called stocks and bonds. acquire was all about merger and acquisitions it was a fantastic game by accumulati accumulating wealth. now, let's go back in time and i think, and think about what i could have done. first, when you were a boy or a girl, you play with toys it would have been a natural to buy shares in hasbro now i am not asking kids to know what it means to own -- they know toys. i bet you they would pick hasbro over mattel. can you imagine if my father bought shares of three m for me?

if we had just looked at the spine. speak of dividends risk, we had a box of cheerios we could have bought general mills and then who didn't want to go to disney world? it is that factor and not how many people cut espn off in the end. the intellectual property, the library alone, should make you wantto buy shares. johnson & johnson baby shampoo and band-aids were staples in my house. these things that are not taught, they are embossed. i know mcdonald's today would seem like something you want to invest it, but the ceo is committed into making the product more natural over time a burger would cost a fortune

and mcdonalds would have to cradle its profits buy a name brand think of what you would like when you were little or what your parents liked when they were little. if it trades, you more than likely have a winner so the bottom line, if you want to get your kids in investing, buy a brand name something they could see and hear and touch and even like yet, just own it the stock won't always work, but think of what you liked when you were little. and remember, that you may have a long-term winner on your hands. let's go to judy in texas. judy. >> caller: hi, jim, how are you? >> i am good >> caller: i am great. my son william has been interested in buying stocks and he is calling with me now. and my dad gave him some money

to purchase some stocks. so we are looking at very first stock purchase so how do we look at what stocks to buy >> look at things, common household things that he sees and you see. and then what you want to do is figure out how much you want to put in it and put a quarter of it in. put a quarter in and wait for three months and another quarter and hopefully you get a sell off. and if not, put the rest of the money to work by the end of the world. but make it in household names brands that everybody knows that you can sink your teeth in carol in florida. >> caller: hi, jim, how are you doing? >> good. >> caller: good. i read and enjoy confessions of

a street attiddict. i want to know your opinion of buying gold and silver as a hedge. >> i think cash is the best hedge against the market i happen to like actual physical gold i like buying gold coins if you can't afford those, the gld is good the stocks will not work because they tend to not reflect the gold i think you are dead right about the idea stocks don't need to be abstract certificates or numbers and letters. they are real. you can touch, and play with them and ahead, investing advice form some of the wisest, teenagers. and taking your questions tweet by tweet, so send them my way at

#madtweets duncan just protected his family

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we all know that teenagers are incorrigible the last thing they want to hear about is stocks. they have bigger fish it fry which i say so what. i'm not going to tell them what to buy i'm going to let them tell me. people who watch this show have been beneficiaries of the wisdom of my two daughters. why do you think you heard me say i like dominoes. yes, the stuff did taste like cardboard before the pizza was

reformulated my kids, they liked the track and they like joes they were local. most pizza is local. i tried it and i liked it. sure i recommended it. it was the technology behind dpz. my kids, most likely like your kids hate talking on the phone they think it is for losers. but apps, they love them when my kids discovered the dominoes app, they were sol. no worries where the pizza was in the process no worries getting their order on and no cheese option for the vegetarians. and then the ability to pay online before the delivery got there. all of this technology was lost to me. i never minded the phone was patient when the pizza would

arrived. in short, i was not like the target audience. many of you know by now the story of how i found the stock of apple when my youngest daughter asked for a second ipod, not because she lost it when i accused her of, but because she wanted another color. they were fashion accessories. when the new computers come out, they check the resolution. if it improves netflix, then they want them the iphone is more controversial. they didn't like the plug change but what they didn't like is the samsung. service charges to make it have to pay to have all of millions

of pictures to store when my kids beg me to have a s s samsung, you will hear me change mytune what they will know is how to feel guilty about the amount of phone charges they rack up you think i have been recommending verizon for nothing? it is the cash cow how about this google it, dad that is how i found out about google now alphabet. when i was doing my senior thesis at harvard, we had access to the fabulous librarians at the houghton library their job, they had to go to the stacks and find out things you wouldn't know where to begin

with i wonder whatever happened to those jobs my kids aren't into sports it is the simple interface the desire for them to watch what they wanted to watch? all of them. no fang, isn't all their creation, i figured out amazon but facebook, like i said, i went to harvard. when you were a freshman, you had the face book. my youngest got sick of facebook early on, probably because i got on it. then she went to instagram which facebook made it so you never knew that old people discovered it. a click on something that as my daughter said it wasn't an ad, it was just a link

oh lordy only mark zuckerberg has the forthought to care about the user experience. how about chipotle kids love the fresh and organic. my youngest, she did take out. she didn't want to be seen inside nothing is perfect but their picks, they will do. what if the picks themselves aren't any good? what if they are erant your kids like a device that fits in your head and takes picture. that is the cost of learning it happens go pro. and fitbit you can loose it and no one may end up noticing it in the end. you pull the same thing later in real life, it has consequences

but for now, you can learn from your teenage children. trust me, and you won't regret t "mad money" is back after the break.

so how about the rest of our lives? what are we thinking about suitability then from here on end, things get less and less suitable not initially. when you are in college, i don't expect you to put any money away at all college zaps the living

daylights out of you in so many ways once out in the real world, it is imperative to save through a 401(k) plan at work or ira this is where you have to begin to mix though of index funds and individual stocks. there is too much risk in individual stocks to put together a portfolio of them of your own choosing. so minimally, first $10,000 put it in the index fund, the s&p 500 as my favorite i know some argue about that i don't care, i know the trust it is too risky for this guy with an index fund no one stock or even one sector can do that to you with the rest of your money, i

do like stocks and i want you to be diversified we created a club, the actual owne owners plus.com club the club is only allowed to invest along club members. to protect you but if you want in-depth worth on the stocks we talk about on this show. a once a week update on all of them, then it is the way to go remember back to earlier in the show when i discussed how hard it was to do the homework, those trips to the harvard business library to research and microfiche now it is earliesier

you need to read conference calls. google articles galore you can read what we like on tulleownersplus.com. i want you to be good managers of your money. at this stage, it is important to know thy self in terms of risk i would like you to think i have more knowledge of what you could tolerate than you do but when you get to your 20s, all i can do is ask you to think what you would do in a sell off. can you accept that stocks go down not a silly question given how

they have gone up over time. these are crucial questions that only you can answer. i would likeyou to take more risks. once you have put away that $10,000. i would hate to see you commit more than 20% of your mad money to individual stocks that would not be my preference. as you get older, capture more income by owning more stocks that have more dividends don't be too quick to do so. in fact i would not advise you to do that until your 30s. only in your 40s do i want you to introduce bonds in your portfolio. by this time, you should put enough away. now in the old days it would be heresy the lack of good fixed income

alternatives that is why i favor higher yielding stocks than bonds you can and do get your money back as you enter your 60s, it is ea easier to see how you put -- 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 an asset class as it once was because it is prone to deep valleys or in retrospect look like threats the bottom line, it is your life not mine so get comfortable with what you can live with, but risk at least until your middle years should remain a friend. stay with cramer

here on "mad money" we love to see families investing together often locking in a stock can set you up for life. we are kicking off this edition of mad tweets with cramerican families first we hear from rico z who says get them started young. holds up under much pressure next we have a tweet from david who says

sat next to your dad sometimes we come across families who are truly cadre to the show nobody is going to stomp at pound the poodles kid. >> facebook? >> mark zuckerberg. >> twitter >> and your favorite for the opening bell >> jim cramer is my favorite >> well that is it that should be a show on its own. this guy should have a show of his own. boy. i like arrow by the way. and facebook i like too. twitter, maybe a change at the

top there. just kidding next up, patrick tucker asks, can honest mistakes be made? >> i may have to do a whole segment on this. the answer is honest mistakes can be made and a lot of times my rule can keep you out of a situation. but there are other cases where it is not honest and you lose everything i am going for the maximum risk situation as opposed to the minimum one and i can't tell from the outside which is which which is why i am so cautious. now a tweet from adillo samuels. you have repeatedly set you for

individual stocks, do you have a write up somewhere explaining why? >> well i do want an index, an s&p 5 s&p 500 fund and put your first 1,000. but try to pick some of the best stocks that normally would be in etf because i trust you. you watch the show, you are doing the work and let's make money together in individual stocks too not denigrating index funds saying let's own stocks as a mad money situation. up next a tweet who wrote just bought get rich carefully and look forward to a fun and informative read it is an in-depth look of how to pit stocks against each other. and the mistakes that i have made so many at times and i detail them all embarrassingly so you can learn

from them. here is a tweet who wrote @jimcramer what percent would you call heavy? >> 10% got to do your work. got to figure out what shorts are wrong and that is the percentage i look for. coach beardson tweeted what do you recommend to keep squirrels out of the garden we have the whole shooting match and they don't get in. so do what you can with as much fence. i spend way too much time thinking about fencing it would be great to shed some light on the age target 401(k) portfolios >> i think the index funds are

better and you can lower at times and lower how much exposure and raise cash and that is a better way to look at it. i think it is a much smarter and modern way than trying to assess >> thank you so much for helping beginning investors like me. >> when you talk about the market, i believe you are spot on. >> i love it thank you so much. every night we watch you i have learned and earned.

my ambition is to get my 8 hours. because a head full of work... a husband who snores with gusto... and marvin... are going to need a bigger bed. ♪ ♪ ambitions live everywhere. synchrony helps make them happen with financing and partner offers at over 350,000 locations. ♪ ♪ synchrony. what are you working forward to? ♪ ♪ i like to say there's always a bull market somewhere. i promise to try to find it just for you right here on "mad money. i'm jim cramer, and i will see you tomorrow

>> 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." ♪ with a money-saving idea to help parents entertain their kids. ♪ i'm nikki pope. i live in los angeles, california, and my company is toygaroo. (singsongy) look what i have. yay! i have 13 nieces and nephews, and they absolutely love playing with toys. i call them my playtime professionals.