report, get it, the heels, foot locker beneficiary of that. >> bk. >> i think it would be -- wouldn't be a bad idea to buy some bands heonds here. >> after about a day or two, sell them. >> nice book end there i'm melissa lee. thank you for watching. at 5:00. "mad money" starts right now 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 is not just to der entertain you but educate you so call me at 800-734-cnbc or tweet me @jimcramer. discipline trumps conviction

i say it over and over and over again. no matter how much you may love a stock or enthralled you are with a company, if the rules say sell it you sell it. one thing i've learned in my investing career, no matter how much you might believe in something, you violate the rules of the road at your own peril. but where the he can do these rules come from? it's not like they were handed down from on high and carved on to stone tablets they're not like the laws of physics, you can't deduce them from serving the way the market works the way you can deduce gravity. no, the rules come from experience, in particular my experience i've spent nearly 40 years in this business anden in that time you better believe i've learned powerful lessons in many cases, i learned them the hard way and because i don't want you to repeat my mistakes, because i want you to have the benefit of my whole career, tonight i want to lay out my most important rules for

investing, the stuff i really live by. some of this stuff may seem basic but, again, you forget the rules at your own peril. at my old hedge fund where i labored for a long time i'd convince myself it was okay to make an exception, to have a cheat day, to ignore my discipline just this once for some reason that seemed compelling at the time and whenever i broke my rules, let's just say i got burned. it's like that old joke about the guy that goes doctor and says "doctor, doctor, it hurts when i stretch out and shake my hand around. to which the doctor replies "don't do that." so what should you be doing or not doing as the case may be let's tick down my most important rules for investing starting with number one bulls make money, bears make money. and pigs, they get slaughtered

so often many my career i've seen moments where stocks went up so much that people were intoxicated with their gains of course they thought they were geniuses, too. however, precisely at this point of intoxication you need to remind yourself not to act like a pig. i first heard this phrase on the desk of the -- old trading desk of the legendary steinhart partners i'd be having a big run in stock and michael steinhart would tell me i was making too much money, maybe i was being a pig. i was just with grateful i caught a major gain. of course not that long after we got a vicious selloff i gave back everything i made and then some that's why this is one of my rules and now it's so deeply engrained that i have a barnyard during sound effect buttons to tell the story i just did -- the bull, the bear, the pig.

just to be clear, bulls don't have a monopoly on piggishness we've had made jor declines over the years, other than the dotcom burst and the financial crisis in 2008/twi2009, most stocks bounced back quickly you made a killing if you went long at the lows of 2009 but if you were a pig and got greed y,s you got slaughtered. how do you know when you're being a anything there's no such thing as stupid questions, only stupid answers but you don't need me to tell you that if you didn't feel greedy in the nasdaq in almost 2000 you don't need an investment adviser, you need a psychiatrist. if you took profits, you

sidestepped a huge decline if you let your winners ride, you lost a fortune the financial question is even more stark if you're walking around earning a huge amount of stock in 2008 as the banks started dropping like flies you were beyond piggish. why is this rule so important? it's similar one of my chief goals is to help you stay in the gain the hardest part of investing is taking short term pain so you can have long term gains the people who got wiped out by the dotcom collapse tend to be the ones who never took anything off the table. they never felt greedy in their piggishne piggishness, it got them slaughtered. same for those who never came back from the financial crisis being cautious and ringing the register near tops ended up keeping you in the game. that's why i remind people everyday, have you taken out your profit? have you booked any gains at

all? or are you being a pig you never know when stocks you own are going to get crushed you never know when the market could be just annihilated. you can't have certainty if you assume stocks will go up forever in a straight line, i think you're going to be in for a world of hurt. sure there will be times when stocks just keep going and going and going. when i coined the term fang for facebook, amazon, netflix and google, which became alphabet, i loved them all but i gave up on amazon after an amazing run. now it continued to move up and up and up but i felt like a pig after the stock's move then i felt like a fool when it kept galloping, it bugged me but that's the price you have to pay. you need to recognize for every huge pile of cash that gets left on the table with a situation like amazon. you're side stepping gigantic losses like the kind you would have had if you stuck with the

market in 2000 and 2008. and i'll keep repeating it with the sound effects because it's just that important. rule two, it's ok to pay taxes no one has ever liked paying taxes but like death, taxes are inevitable and unavoidable yet the aversion of paying taxes on stock market winnings often borders on the pathological. so many times people have gigantic gains but they simply refuse to take any profits wall street is littered with broken hearts of investors who made this mistake a couple years ago i went to a presentation from a prominent hedge fund manager who recommended buying the stock of macy's because of the real

estate value i know people who owned it for years with hefty profits and they didn't want to ring the register why? they would have had to write a check to uncle sam next thing you know the stock of macy's is obliterated, cut in more than half and it wasn't the two for one split. it hit a tipping point courtesy of competition from amazon and the darn thing got crushed those who didn't want to shares the profits with uncle sam ended up with no profit at all what kind of lesson is that? so make your peace with the tax man. some gains are unsustainable and need to be taken a profit on paper is not the same thing as a profit in your bank account when it's time to sell, you sell stop fearing the tax man, start fearing the loss man you won't regret it. and i'm not saying blow out of everything, i'm saying take

profits. bottom line, remember my top two rules, bulls make money, bears make money, but pigs -- don't b greedy and a variation, don't be greedy it's okay to pay the taxes don't worry about making a taxable profit because you may end up with no profit at all chris in ohio? chris. >> caller: hi, jim, thanks so much for having me. >> good to have you. >> caller: so my question is, we have a thousand dollars of disposable income and neither of us have a 401(k) match with our jobs so we're basically just trying to figure out -- we have a mortgage, we're trying to figure out what would be the best thing to do with that extra thousand dollars of disposable income >> well, that's what an index fund is for. yeah, you can take 10% of that and use it for mad money, buying a share of something

and that's okay. my first stock trades were one shares, five shares, seven shares but you need an index fund to get started until you build up wealth how about illinois giacomo? >> caller: recently on the show you talked about how first time investors or younger investors should stay away from riskier asset classes until they have $10,000 allocated in mutual funds or exchange traded funds. >> yes if i don't have $10,000 invested in mutual funds, what do i do? do i wait it out and wait until i have my savings set aside? >> i understand a young person -- i want people to be able to save that's my principle goal if you want to put money aside, some mad money aside and do what i think is basically doing

gambling with it i'm not going to stop you. but the thing i most care about is getting people to save. if you're saving with some risk as long as you understand the risk i'm okay with it. but i cannot back away from index funds as the fundment of how you invest jeff in california jeff >> caller: this is jeff in lake tah tahoe. thanks for your informative and helpful program. i have a two-part question pertaining to interest rates specifically yield curves. can you explain what a flatte n flattenening yield curve means and why did analysts say when there's inverted yield curve that it portends recession coming and the last part of my question is what happens if the ten-year t-bill goes to over 3% how will that affect the stock market in 2018

grab your skis and come seeus in tahoe. >> i love tahoe. i used to play cards on the nevada side. an inverted yield curve, fed raised rates too high, rest of the curve goes down out five, ten, 10 years. that has -- that is a curve that has shown in many cases to lead to recession but in other cases not. so i'm not -- i'm not hard and fast in that rule. i do think that as rates go up, business slows that's undeniable. but we are such a low rate and business is so strong that we can afford it. mike in california mike >> caller: good afternoon, mr. cramer. >> mike! >> caller: listen, two things. one, first thanks for taking my call, number two, thanks for leading us 9 to 5ers down the right path. >> that's all i want to do, thank you. >> caller: here's my question. i know you here in a hurry here. >> no, i'm fine.

>> caller: it's concerning dividends. just want to know, do you take the money and put in the your pocket or do you put it back in the stocks and if you do, how do you make that work and how do you set that up? >> you have to do dividend reinvest you have to do dividend reinvest it's a checkoff, basically, but you have to. my charitable trust we're not allowed to, we have to give the dividends away and it always hurts the performance. i tell club members please, reinvest just take that money because there's nothing like the compounding of the great compounding that you get, particularly with stocks that have good dividends. remember my first two rules -- bulls make money, bears make money, and pigs get slaughtered. please don't be greedy please be disciplined. and don't be afraid to pay the tax man on profits you earn. it's a lot better than riding things to losses much more "mad money" ahead. i'm putting my nearly four decades of experience to work together counting down the most important rules for investing to help you navigate the market

stick 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 madmon madmoney @cnbc.com or give us a call at 800-743-cnbc miss something head to madmoney.cnbc.com. - i love my grandma. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him iswhen i c! - 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.

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then say "get tickets" for local showtimes from fandango. and it's just like, "wild." only with xfinity x1. news flash, at the end of the day, we're human if you remember one thing about being an invest or, nobody is perfect, everyone is fallible and it's inevitable we're going to make mistakes it's the nature of the business. that's why if you're going to own individual stocks, you need to follow a set of rules that are designed to protect you from yourself rules that i learned the hard way. that brings me to my next commandment. this is an important one never buy a stock all at once. i can't stress it enough do not under any circumstances buy all at once. now, no broker likes to fool around with partial orders like

i'm telling you to give. no financial adviser has the time to buy stocks methodically over time. the game is to get the trade on at one level in a big way. make the statement buy, get the position on the sheets or in the portfolio. but from where i stand that's wrong. 100% wrong you should never buy all at once or sell all at once. instead, stage your buys, stage your sells this is the term we use when wall street is working your orders try to get the best price over time and not necessarily in one day, maybe multiple days when i started i was a professional money manager i wanted to prove to everyone how clever i was so if i felt like buying caterpillar i'd buy it now, buy it big, buy it all at one price because i was so sure i was right put me up on 50,000 cat, i would scream which means buy 50,000 cat as if i were the smartest guy in the universe when i think back about that

young cramer with the mostly full head of hair all i can say is i was one arrogant son of a gun. i was arrogant and i was wrong what was my mistake? well, if you want to buy 50,000 shares of caterpillar, you don't pick them up at once it's dumb. what happens if it goes down immediately? you'll feel like a dope. that's my rule never buy all at once. instead i should have been buying cat in increments of 35,035 5,000 shares buy it gradually over time now you can cross your fingers and hope it goes down. i know we trade institutionally and i know the institutional guys are saying jim, 50,000 is nothing but i no longer trade in size, as we say, but i still invest and i invest for my charitable trust and wherever we have a new name to tell club members, we buy it in small

increments, 500 shares at a time, even smaller when you buy at once you're declaring the stock won't go lower. don't you think that's crazy no one has that kind of insight. buying gradually in staging is about recognizing our judgment is fallible. why don't more people do it my way? why don't investors if they want 500 shares in exxonmobil buy it in increments? i think they want to be big, too. they don't want to waste the broker's time. your broker wants to get the trade done my brokers hated when i would place incremental orders but it's plain hubris to put a major chunk of your net worth into any stock who knows? maybe they'll go into freefall that's why we resist i've bought and sold billions of shares of stocks do you know how often the last price i paid was the lowest and then maybe it was off to the races? one trade in 100 and i'm pretty good at this

so resist the arrogance, buy slowly over a couple days as i tell owners of the actionalerts.com club. next rule, buy damaged stocks not damaged companies. say the mall is having a sale and you pick up merchandise to find out when it's broken when you get home maybe there's a hole in the shirt. in the real world you can return the merchandise, get your money back there are guarantees and warranties galore on main street wall street is different if you buy a stock that turns out to belong to a defective company you have to eat the losses caveat'm or t caveat emptor. sometimes damaged companies can be easier to december certain. when valiant started plummeting from the 200s in 2015

combination of chicanery with one of their pharmacies, it wasn't a good sale to rush toward they tumbled from 262 to the single digits. people thought valueant was goig down more but the stock was toxic. sometimes the stock will sell off for reasons that have nothing do with the underlying company. it could be etfs, washington worries, greece. just because the stock is down doesn't mean there's anything wrong with the business. how do we distinguish between a broken company and broken stock? complicated. i like to develop a list of stocks i call this my bullpen when wall street throws a sale with the whole market coming down i use that as an opportunity to pick up the stocks on my list that was designed in a cooler moment with a cooler head. bottom line, you never know, that's why this rule works in

tandem with the last one, never buy a position at once because what you think is a damaged stock may turn out to be a damaged company. if you take your time, you're more likely to end up with a large quantity of broken merchandise. stick with cramer.

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welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you! every stay is a special stay at holiday inn. save up to 15% when you book early at hollidayinn.com if you want to build a portfolio of individual stocks the big if, since there's nothing wrong with getting equity exposure from an index fund that mirrors the s&p 500, you have to be rigorous. which brings me to my next rule -- do the home work listen, growing up, my kids hated doing home work. they thought it was punishment sometimes when i looked at what they were studying i have to admit i found it easy to sympathize with their point of view what's the relevance of most things they teach in high

school how will it help you later in life why even bother? of course that's a terrible attitu attitude. >> i take that back. but i always encouraged my kids to study because you never know what you'll turn out to be interested in later in life but i think many of you have the same attitude to the home work you need to do for stocks. you suspect it might be just as irrelevant to your portfolio as school work seemed to be with my kids when i tell people they need to listen to the starbucks conference call or they know what the announcer is expecting from netflix, if they're going to own these stocks, they don't want to hear it. they just want to own them, not doing anything when i remind them that means listening to conference calls, they really want no part of it they look at me like a schoolmarm asking for way too much in this business city 21st century world but that's wrong, people owning stocks without doing the proper research, i regard it as

just plain lunacy. you never want to do that. but people still do it and they do it for a couple different reasons. on the one hand there's the buy-and-hold school of thought, the idea you don't need to keep track because you're in it for the long haul as if that makes it okay then you have people who don't have the time to be diligent itch the solution, either get someone else to manage your money or invest in an index fund if you can't devote a few hours a week to your portfolio you shouldn'ts me around with stocks but it's the buy-and-hold premise that's more pernicious back in the 1990s, buy and hold became the be all and end all of investing. i'm going to hold on to that cmgi google that up with. it's got to go back to 100 where i bought it. i could substitute vertical knelt. i have a hundred companies i

could put there. experts say if you hold things for the long term isn't everything supposed to work out for the best this philosophy took a blow during the financial crisis when so many people who practiced buy-and-hold got wiped out i've been an evangelical for buying and home work iing. you have to listen to the conference calls go to the company's web site, read the research, read news stories, google the thing everything is available on the web. everything you have so much more knowledge that there is no excuse. you aren't up there begging at the goldman sachs library for y microfiche statements from three months ago but if you fall back on the buy-and-hold strategy for any group of stocks i can assure you you'll be beaten by professional managers with good track records who are searching for high-quality stocks all the t e

time i'm certain any index fund can't beat someone who does know home work the next rule is another essential. diversify, diversify, and then diversify some more. be diversified to control risk if you control the down side, the up side will take care of its and that means managing risk what's the biggest risk out there? sector risk. stocks in the same sector tend to trade together, especially at extreme moments 50% of the action in a given stock comes down to its sector if you had all your eggs in one group in 2000 you got scrambled. same thing with financials in 2008, oils 2014 to 2016 and there's only one thing keeping you from getting nailed and that's diversification

i've been playing this game since 2002 diversification is the only free lyn lunch in this business it's the only investment concept that works for everyone. if you mix up enough different sectors in your portfolio, at least five, you won't be wiped out when one group gets obliterated. but if diversification is a no brainer and every adviser and commentator under the sun has been telling people to do it for years, how can anyone be undiversified? i think it comes back to the home work issue. they couldn't tell you if they bumped into them so they end up with stocks that are similar not even knowing it. i feel quite a few calls from people who genuinely think earning fang is a diversified strategy hardly with facebook, amazon, netflix and google, now alphabet, you own the same thing, social, mobile, cloud. that's faux diversification. no matter how much i might like oil stocks, it's usually wrong, i can count on the portfolio

made up of exxonmobil, chesapeake energy and halliburton. i say to no to a portfolio by the way, j&j, eli lilly and bristol-myers and united health even as i like all four. they leave you too exposed to health care risk having an undiversified portfolio is not just an amateur mistake. many professionals don't like to be diversified because of the bizarre way money management works in this country. if you concentrate your bets in one sector you beat everyone who is diversified that's the nature of the baes. -- beast you can get profiled by every magazine, raise aal from capitm unsuspecting investors who don't realize how much risk they're taking on. whether you're an which you are and professional, keep your portfolio diversified.

ing this routine maintenance stuff that protects you from monster losses down the line mike in south carolina >> caller: hey, it's mike from south carolina. >> thank you forcalling. >> caller: how many stocks should be in my portfolio if i invest $100,000. i thought it should be 30. >> after 10 you're kind of a mutual fund. if you're aing to junkie, you can take on more but ten is the maximum most people can do so don't do more than that because you won't be able to do the home work roberto in texas, please roberto? >> caller: hi, jim, booyah a great day in america i'm a new investor i'm 29 i have a small amount, about $1500 and i'm wondering how i should invest it, in either an index fund -- >> s&p 500

plain and simple then you can do mad money. don't forget index funds keep you diversified and we like to diversify, diversify, diversify. home work isn't fun but losing money is first avoid monster losses, home work and diversification are key so stick with cramer. whoooo.

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look, i don't want to go all zen and the art oaf portfolio maintenance on you but when it comes to managing your own money you are often your own worst enemy. don't take it personally i'm my own worst enemy, too. what do i mean okay, if you want to invest wisely, you constantly need to be fighting off your own worst impulse impulses we have emotions and they can throw you off your game, that's why the theme of tonight's show is that discipline trumps conviction you obey the rules so you don't the smart thing even when your emotions are telling you to do the opposite that brings me to my next rule of investing, nobody ever made a dime panicking panic -- you should repeat after

me -- is not a strategy. pan sick notic is not a strategy a stock gets hammered then investors sell after the hammering. the market gets crushes people bail at the end of the day, something gets annihilated and people can't take the pain so they bolt. panic is the operating instinct in these cases there's something basic and instinctive about the desire to flee if you're a stone age hunter-gatherer who stumbles into a family of grizzly bears panic can be help fful. it tells you to run away but it isn't useful when it comes to analyzing the stock market when you're running away when maybe you should run toward. there will almost always be a better time to sell than in a panic, a better time to li the table. in 2010 the market fell 900 points in less than a half how shall.

i watched the monitor for the ticker, the crawl underneath the picture and i couldn't believe what was happening people were dumping stocks because everyone else was dumping stock. they didn't know why they were dumping it and that's what a panic looks like that's textbook. i urged viewers to pick a stock they love and buy it using limit orders so you would haven't to accept the price you didn't like the result, to this day people come up and thank me for that advice but i put my rule into practice realizing nobody made a dime panicking i did the same thing in 2016 i told people to buy down but only using limit orders and that's what we did for the charitable trust which you can follow by joining actionalertsdom com club we stayed calm and took advantage of everyone else's panic. so the next time there is a big selloff and you feel like fleeing, i want you to do something for me

take the opposite side of your emotions, the opposite side of the trade when you see one of those high speed routes of a sector why not buy. get a feel for it. the most rewarding trades you can make is those where the exit doors aren't as big as they think they are they're not all worth buying i'm saying that it's a rare moment when you won't get some sort of bounce after big decline so that the next time you want to dump anything wait for the rebound before selling rather than to rush joining the fleeing masses, you could get trampled i have another rule that can help you handle big declines ready? when the stock market gets

negative, remember he who depends on everything depends on nothing. it was true when frederick the great said 250 years ago, now it's just as great he was talking about battle plans but the point stands he who defends everything defends nothing. what the market is flying many stocks are in bull market mode, you don't need to worry about most of your positions when you're on the defensive, you need to recognize many stocks you bought during better times may not fit the new environment. when the economy is slowing and the market is getting slams you can't hang on to everything. if you try to defend your positions in a market that turns against you that is a recipe for you to get blown out of the stock market and when i say "defend" i mean you can't treat a declining market like it's a buying opportunity where you just keep chipping away. you'll quickly run out of

capital. anyone would maybe you'd be unprepared to buy more if we go lower. yet when the market gets negative, you need to get more select selective. that's why i rank my stock at all times for my actionalerts.com members one are stocks i buy right now, three is stocks i sell that way i know which stocks to defend when things get tough and i know which ones to cut or use the sources of capital to buy the one, let's say tech is getting hammered but you think it will rebound. it's important not to hang on to the whole complex. if i can best tech stocks. use that as newfound cash reserves to buy the stocks of higher quality tech companies at lower prices, the non-essentials the ones that have no catalyst and you only own because you want exposure to a bull market they get the heave ho when things turn bearish.

karen cramer worked with me for years and called this circling the wagons around your best names. the first few times you'll curse yourself because you might get stock you've known for quite some time but after you experience rough markets you'll realize how valuable this process is because over time you end up with great cost bases on the stocks you like. the bottom line, great investors know how to ignore their emotions when the emotions get in the way of making money so the next time the market gets slammed, don't panic, nobody ever made a dime by panicking. but also don't double down with your eyes closed and the whole portfolio in weakness. vicious negative markets can give you buying opportunities but you need to focus on your capital, on your absolute favorites rather than chasing bargains and lower quality merchandise when they weren't bargains at all. rich in new york rich >> caller: hi, mr. cramer, it's a pleasure. >> how are you >> caller: will you please explain -- i'm good, thank you

could you please explain the technique of buying calls and if it could be or should be used by us home gamers to boost or pad our portfolios >> it's a great question the najarian brothers have done fabulous work on options and there's also options actions on friday afternoon they could be a low risk way to be able to limit your exposure and if you get the book "getting back to even" i have a 100 page exposition of how to use calls to limit your down side and get maximum upside exposure. david in california. david? >> caller: booyah, jim cramer, thanks for having me. >> glad you called. >> thanks. quick question for millennials who are knowledgeable about the mark, where should they invest their money other than fangs >> there's a lot of different

fang-like names in different industries, for instance i like aerospace, that's a long-term bull market. i like a little foreign exposure and i think that isn't such a bad idea, maybe an etf that has european union because europe is behind where we are and will be that way for multiple years. and then i think if you're really young, why not look at riskier biotech stocks you have your whole life to make that money back. emotions have no place in investing so the next time the market gets slammed, don't panic. nobody ever made a dime by panicking. selloff cans give you huge opportunities but you need to do your home work don't chase and don't buy damaged merchandise, just damaged stocks "mad money" is back after the "mad money" ♪s back after the

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your financial destiny mistakes will always be part of the investing and you can't outlaw them. i just want to be sure you don't make the same mistakes twice or three times or endlessly and that's why i have rules. i'm trying to keep you from not making the mistakes i made when i was young. rules like don't own too many stocks at my old hedge fund i would spend three hours analyzing the mistakes of the day before that was my major task that i complete every moment. you don't need to analyze

winners, they take care of themselves i try to figure out how i could have made more money or lost less money i was for lack of a better word maniacal about it. when we owned fewer stocks, we made more money. it was axiomatic and that's why ever since i won't buy a stock without first taking a different one off the table. you don't just buy shares in more and more companies. you need to limit your holdings. that's a great discipline and one you should adopt pronto. all the money managers i know of have hundreds of positions i don't know how the heck you're supposed to stay on top of more than 30. all the really good money managers have a few names that they know inside out which means they can buy confidently on the way down when the market goes awry that's why i say don't own too

many stocks. you end up selling stocks stocks that aren't as good. hindsight is 2020. but take it from me. as someone who owned stocks for 40 years, it's more likely you'll be selling marginal companies in order to get bigger and better ones. that's how to make a portfolio work for you that's portfolio management. you don'twant to be a mutual fund manager you might as well give it to an index fund the time i lost the most money as a hedge fund manager, my sheets, my positions were thick as a brick when i made the most money, my sheets were one sheet of paper double spaced and i ran hundreds of millions of dollars so please remember, whether you're a pro or an amateur, that's almost always possible that you have too many positions. rule of thumb, if you're just. if you own more than 10 stocks, pear back a bit. so you can have too many stocks but you know what it's hard to have too much of

cash is which brings me to my next rule, cash is for winners. the aversion to cash in this business breaks my heart it drives me crazy how so few people recommend cash. they hate the market so they're only 95% long instead of 100% or they think the market stinks so they short a few high flyers against their longs or positions they own no, no, and no that u's the wrong way to approh this if you don't like investors, sell stocks and raise cash don't buy put options in the stocks you own or find other stocks to short against your current positions. the odds don't favor you winning on both stocks, the short and long it's the mediocrity that's the best way to protect yourself against the market. i was one of the biggest option traders on wall street for a time and when i bought put options to hedge my position i ended up losing money.

when did i make money, when i bought put options from low quality companies that i thought would have short falls or stocks that seemed hopelessly overvalued versus the fundamentals if you dislike the market, you don't need to bend yourself into pretzels to hedge against down side risk, just sell some stocks and go into cash which is literally short term treasuries. people talk about how little cash earns though it's earning more than it did a while ago or they say can't be in cash, that's for losers. no cash is for winners, sp s especy if you think the market will have a prolonged selloff i only shorted when i had an edge i can't short at all by contract, not even for the charitable trust but back when i could i didn't short stocks for the shake of having shorts on against the longs. i don't care about not having enough exposure, i care about not losing money so if you don't like the market, you think

there's nothing compelling to buy, i suggest you sell stock and raise cash go sit on the sidelines, nothing wrong that wait for the situation to improve. it's never the wrong call when you don't like the tape or you can't find anything that makes sense for you. bottom line, always be careful not to own took stocks and not to have too little cash. stick with cramer. i'm april kennedy and i'm an arborist

with pg&e in the sierras. since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future.

your tweets are piling up. holy cow, let's start with one

from quentin who asks "at what age should i put bonds into my retirement account currently stocks and etf mutual funds at 25 years old. i don't want bonds until very, very late. i like to actually extend it a little and say that not until you are in your late 50s do i want to start seeing bonds why? people live longer than they used to and bonds don't generate enough how about higher yielding dividend stocks? moving on. could this next tweeter be one of our next producers. he says "i would like to see from you a show titled typical errors of emotional nova scotia i -- emotional investing. that ice a good idea, i'm going to do it it produces major mistakes that lead to big losses you have to check them at the door another tweet, this from steve

daniels who says "booyah, what other types of index funds to you recommend that mirrors the s&p 500? okay, there is a place called vanguard and vanguard is terrific and they have a think called the total return fund of all stocks that one is one of my absolute favorites. stick with cramer. let's get started. show of hands. who wants customizable options chains? ones that make it fast and easy to analyze and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need.

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i like to say there's always a bull market somewhere and i promise to find it just for you right here on "mad money." i'm jim cramer and see you next time

>> 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." ♪ to bring a child's imagination to life. hi. i'm alex furmansky from palm beach, florida. i'm raising $100,000 in seed funding for 5% of my heartwarming company, called budsies.