Corticosteroids, or medicines to decrease blood clotting. So. What do men do when a numbers too low . Turn it up [ male announcer ] in a clinical study, over 80 of treated men had their t levels restored to normal. Talk to your doctor about all your symptoms. Get the blood tests. Change your number. Turn it up. Androgel 1. 62 . Take a look. Shares of herbalife close to up 20 on news carl icahn has taken a 14 million share stake in the company. 12. 98 . Icahn in the Halftime Report to him. Im melissa lee, check out the back story, final trades there. Im jim cramer and welcome to my world. Its a bull market summer. Mad money, you cant afford to miss it. Im trying to save you some money. My job is not just entertain you but im trying to coach you and teach you. In recent years, stocks have become more hated, hated than any time i can remember in my entire career. That spans a lot of time. I still believe anyone can turn a profit in the stock market. As long as youre willing to put in the time and the effort to keep track of what you own. I wouldnt come out here every night and try to educate you if i didnt think it was possible but actually feasible for the vast majority of people to succeed at managing their own money. Okay. So if thats the case, then why is investing so darn difficult . How come so many People Struggle to make money in the stock market . How the heck can i believe its possible for you to beat the averages, the big bench marks on the s p 500 and the Dow Jones Industrial average and so many Fund Managers fail to do so . Simple you can do it but you have to do it the right way. One of the biggest obstacles to successful investing is lack of clarity about what investing is supposed to mean. Ive seen countless people try to follow the conventional wisdom about Money Management only to have investments wiped out because the conventional wisdom is wrong. And the worst part is those people had no idea they were making a mistake. They actually thought they were being responsible. In other words, to borrow a phrase from cool han luke. What we got here is failure to communicate. Im shaking, boss. Tonight i want to demystify the concept of long term investing, an idea that is misinterpreted so often and in so many ways that its become more of a hindrance than a help. So listen up, tonight set you straight, here on mad money were about long term investing. There is a serious problem on this notion. It goes like this. Too often people let the concept of long term investing get in the way of investing. If you think long term investing is about making boat loads of money over years, decades, life times, im onboard. Thats something i can teach you how to do using discipline that allowed me to make fortunes for my own partners from my Old Hedge Fund. However, there is a darker side to this concept. All too often i see people go long term investing as an excuse, an alibi even for poor performance the house of pain or for not paying attention to what they own. You hear you shouldnt worry about the losses or profits youre mising in the present. Its okay to take short term pain because youll make back the money with long term gains. Sometimes that is true. Most of the time, losing money month after month after month or year after year, that isnt a good recipe for making money over the long term. But a bunch of short term losses dont magically transform into long term gains if you wait long enough. They dont simmer and boil here. Yes, making money over the long haul is the ultimate goal in this game. Its become the ultimate excuse, the alibi for short term losses and, believe me, that kind of thinking will only make you a worst investor, not a better one. Before i can teach you how to invest for the lorng teng term,e to change your mind about the long termal buys that youve been fed for ages. At what points do you need to cover your ears and tie yourself to the mast so you wont listen to the conventional wisdom and steer your portfolio on to the rocks . First and most important, long term investing is not the same as simply owning stocks for a long team. In other words, dont confuse being a good investors with the idiotic ideology of buy and hold or as i skeptically dub it buy and forget. Buy and hold is the conventional wisdom for decades. This lost people more money than the last two financial crisis combined. Just because you have a long term horizon doesnt mean can you afford to take loss after loss after loss and it doesnt make them into gainers or even potential gainers. Losses are losses. The notion of being in something for the long term doesnt justify owning damaged goods. The stocks of companies in bad shape and the misguided hook that theyll recover, damaged goods. The idea of buy and hold is once you purchase your stocks, you just wait. Me, i never liked waiting. And it also happens to be a terrible straj ji. Im constantly saying you have to keep track of your investments. Do that ridiculous, i know, hard consuming home work. It isnt ridiculous and not that hard and time consuming. The quarterly reports, read the sec filings, read the transcripts a little faster sometimes. Much of the research that used to be available only in the paying millions of commissions now found on the web like a Yahoo Finance guy, cnbc. Com, they all got it. Its your money. Please invest time in it. The advocates of buy and hold act like investing for the long term means you have a license not to Pay Attention to the short term. Its like you have a birthright. I buy a stock and that allows me to not do home work. But you always have to Pay Attention. The moment you stop is the moment you stop losing money. Youll never be able to recover from the losses until you get engaged with your portfolio again. Youre not stupid. You can get engaged and can you do this. Now sometimes companies go into what is known as secular decline and stocks never really recover in, that case, you cant afford to wait for a turn around. You have to get out before the damage becomes too horrific. Yes, polaroid, kodak, okay . Research in motion. Noeka. Radio shack, right . Radio shack that, was a good one. Or super value all the way down we were told that long term youre fine. Or in other words, be a long Term Investor doesnt give you a license to be lazy and apathetic investor. Anyone anyone who owns stocks through the misery and horror of the crash in 2008 and beginning of 2009 knows it doesnt work. Investing for the long term does not mean owning stocks for ever no matter the cost. You cannot just buy and hold stocks for eternity. And they will magically bank of america comes back to 50. As long as you dont pay too amuch attention, i get it. From the stories i read and p pundits, lessons are being forgotten. I cant have had a happen. Im one of the loudest opponents of buy and hold. In this brave world of flash crashes, many people who foolishly espouse this philosophy tried to change their tune or discredited and no one listens to them anymore. It doesnt mean you should write off the idea of long term investing, too. It doesnt mean stocks cant make you money over an extended period of time although thats what many of you think if you confuse long term investing with buy and hold. Buy and hold was always bogus. The truth is stocks are the best way to make money for retirement, 529 plan to send your kids to college or just build up savings so you can afford a big ticket item, especially they allow you to compound your wealth by reinvesting, the dividend pairs, thats good investing. That said, youll never get any of those things if you use the concept of long term horizon as an excuse or alibi for bad performance and Holding Stocks that cant afford to pay the debts or dividends. Sometimes you wont even know about them if you just buy and forget. You feel its a license not to have to find out about it. Heres the bottom line. Long term investing is mixed up over the years. It doesnt mean its not possible or worth trying. I can teach you the disciplines and strategies that allow you to build long term wealth as long as you remember to say hey, come on, im a long term invest wror is no excuse for not doing the home work or following the rules. If anything, be in stocks for the long term requires more diligence and more patience than if youre in there for the short term. Dont throw away all the lessons i teach you. Youre going to need them. To paraphrase that amateur investor and world renowned beauty gertrude stein, a loss is a loss is a loss realized or unrealized. Dont you forget it. Bill in florida. Bill . Caller yes, jim. Nice to talk to you. Jim, im a retiree. I have a fixed income. Im very concerned about the future. There is so much uncertainty, jim. There is uncertainty in taxes and inflation is a big concern of mine. Is there anything i can do to to protect myself . Look, i got to tell you unless you have youre a person who really does have to heed my 20 in the gld and 20 in gold. That is going to be the best defense. I think the defense is right to have. Im not going to go tell you, listen, buy bonds that yield 2 and thats good protection. I think gold is going to be the best defense you have against the worries that you just outlined. Lets go to anthony in virginia. Caller washington red xoosk booya. Whether its overbought, my own rule, i use the s p oscillator that comes delivered to me on my door on saturdays, we are plus five if, were very overbought, take a pass. Another time will come. However, you can get started small and hope it comes back if you just cant resist. Sam in ohio, sam . Caller hey, jim. Loving it, whats up . Caller i got a question. Ive been looking at a couple utility stocks. And looking at going with preferred instead of the common shares. I just want to get your opinion on maybe what might be better. Come on, man. We want upside. We dont want to cap our upside. A lot of the utilities should have fabulous Growth Stocks, particularly in a growth economy. You know what . Own them outright. Well do just fine. Of course i want new this market for the long run. The whole idea of trading back you cant be just High Frequency traders, give me a break. Long term investing but that doesnt mean buy and forget, even when you intend to hold on to a stock for the long haul, do not throw out the rules. Keep doing the home work. Be sure that youre in the right merchandise and stay with cramer. [ laughs ] now this is a test drive. Whoa you really feel all 335 footpounds of torque. Its chevy truck month silverado was also recognized for the lowest cost of ownership. Hey, what are you gonna do with it . End table. Oh. [ male announcer ] its chevy truck month. Now get 0 financing for 60 months, plus trade up to get 1,750 total allowance on a silverado allstar edition. Or trade up and choose customer cash plus option package discount for a total value of 7,250. All stations come over to mission a for a final go. This is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. Lets talk the price is right. Not the game show. Im shaukitalking about the sto. Do you want to make money from your stocks . Its critical you buy them at the right price. Thats true whether you make short term trade or purchasing something if everything goes right you expect to hold for years and years and years. The price matters. When you pay too much for a stock, you make it difficult to rack up the gains we want. You can have fantastic idea. If you get the price wrong, you may not make any money. I think price is dra mat ukly underrated as a determinent of successful investing which is why tonight im giving the power of price its do. How do you find the best price to pull the trigger given how important i think it is . When youre investing for the long haul, you have one huge advantage over people using a shorter term horizon. A resource that traders simply dont have the luxury of exploiting. Im talking about time. As the longer Term Investor, you have all the time in the world. Now when you want to buy a stock that you like because you like the underlying companys prospect and when there are no near term catalysts that can drive the price up soon that, is a recipe for being patient. You dont have to pay the price the market is giving you right at that very moment, right . You can be patient and wait for the stock to come down to your price before you do this. Of course, youre never going to get an all clear signal telling that you its time to buy. Youre not going to hear this and then say i know. How exactly are you supposed to know how long you should wait before you pull that trigger . Simple dont know. There is one of the areas you have to embrace the facts of ignorance. Thats why i tell you to buy the stock in increments. Loading up gently and over time. Were all ignorant in the end. We dont know when the stock or market is going to give us the ideal time. Lets bet we get the wrong one at first. If you buy them all and the stock goes down further, what is going to happen . Youll feel like an idiot for losing money so quickly. Then youll dump the whole position a point or two down instead of buying weakness to buy more. I studied thousands of trades. In short, there is no right price, but if you build up patiently, can you avoid paying the wrong price. And thats more important. Thats why back in the Old Hedge Fund you can follow along, i play with it open hand, not a lady gaga style poker face, i like to buy with wide scales on the way down. I know authentic wall street translate into american english. Buying with wide scales on the way down zrabz the way you should purchase a die klining stock or stock youre afraid is going to go down because the stock market in general while it approaches a bottom. You want to get the right entry point for the long term investment. This is the way to do it without getting discouraged. Im trying to stop human nature here. Its impossible to call a perfect bottom in a perfect stock. Thats why we dont try to time the bottom. Instead, the smart move, the way the pros do it and the way you should do it is buy incrementally on the way down. The big guy dozen this believe me. Its your insurance against the potential bad judgment of thinking you know the stocks really done going down and you want to be all in because youre so sure, so darn sure that youre getting in on the ground floor. In this game, you got to presume there is a basement if not several subbasements, okay . This notion of scaling into a position is a trick that helps you get around the difficulty of timing the market. It is a trick. It is just something that ive used over time. All right. So lets say you want to buy 400 shares of catcaterpillar. Now what he . Youre going to feel like a stooge. The dreaded shep. And worse, you would have lost 2,000 blink of an eye much thats why we dont do that. 400 shares of caterpillar, start small. Buy 100 shares. Then wait for a pullback. Wait for the market to bring it back. Then if cat comes down to 8 8 rather than contemplating suicide, you can buy more shares. You buy the next 100 shares. If it drops to 81 and put in the final 100, if it sinks below 80, you got a good basis, basis matters. Base sis price. The worst case scenario, caterpillar goes higher after 100 and you make money. Now thats what i call a high quality problem. Simil similarly, you should unload it incrementally. That way you dont have any regrets. Oh, boy i sold it all and then it had a big move. Now lets talk about scales. If youre buying a stock that is sinking lower every day, thats okay because company can be good. Can you either buy it with strict scales or wide scales. What is the difference . Lets stick with caterpillar. Xri strict sales, you buy 1,000 shares. Each time they go lower, you buy more. Strict scales you is buy in the same increments. Every time cat goes down a point or three points or whatever size decline makes sense, you purchase the same amount of stock. Using strict scales is smart and responsible. Thats why i like to use wide scales when buying a stock. Particularly a volatile stock like caterpillar. You buy larger and larger positions as the stock goes lower. I used to think of it as a pyramid of buying. If a stock lost a point, i would put on 1,000 shares. Another point, 1500. And when you go so low can you hardly believe how poor the stock is trading, double down. Do you see what i mean . Its about a pyramid structure of buying the best investors i have all seen is using a pyramid style. The great thing about wide scales is they leave with you lots of room to maneuver. When the stock eventually bottoms out, youre going to want to pour your money in using wide scales allows you to use the greatest number of shares at the lowest price. The best thing is you can afford to be patient. When you like a companys fundamentals, wait for a pullback or sector wide selloff to accumulate a big position in that companys stock as it goes down. Make sure the story is still inta intact. Do the home work. If the company is broken, thn the stock is never going to be a bargain no matter how low it falls. In that case, you might need to abandon ship and find a better one to travel on. There is no sin in recognizing you made a mistake and you have the wrong stock. The bottom line, in this game, few things are more important than price. Trying to get a good basis. Long Term Investor, you have the luxury of being able to wait for a good one. Be patient. Keep your bounty on your shoulder, wait for the right pitch. And when youre trying to catch a stock on the way down, buy it with wider scales to get the best possible overall basis. Joe in massachusetts. Joe . Caller hey, booyah, jim. I have a quick question for you on stop loss orders. Versus stop limits and how an individual investor can best use that, not only to minimize losses but to ride the ups and downs of an individual stock. Right. Well, look, i dont condone these. If youre going to own stocks and youre going to try to get the right prices, you have to stay on top of it. Im sorry. Its too important. Its your money. You get one of these flash crashes, you bought a stock at 80, its at 70 immediately, i cant condone. That the market doesnt work well enough to do those things anymore. You have to protect yourself from any market that acts as badly and strangely because of High Frequency trading, the old tricks out the window. Price matters. Basis matters. Dont buy all at once. Dont sell all at once. Keep an open mind. Keep doing the home work and stay with cramer. music throughout why turbo . Trust us. Its just better to be in front. The sonata turbo. From hyundai. Transit fares as in the 37 b