Where theres always someone on tv or internet telling you to do the exact opposite of what you should be doing. They tell you to do the wrong thing with incredible conviction. Sometimes they sound super intelligent, much smarter than i sound, for example. But here at mad money were not about sounding smart, we are about getting it right, what to buy, sell what direction the market is heading, how it works, you get these things right and it is heck of easier to make money. Work hard. No trick. No five simple rules to make you a multi millionaire overnight but if you do the work you might learn something that might make you a better investor which is simply one who makes more money, because that is the goal. Not ideology not politics not view point making money. For the better part of a decade i have been running my own trust. As part of the research for my latest book get rich carefully i went over every trade over the last five years and realize what did worked and what didnt. Tonight i will take you through some of the most important lessons i picked up best successes and more important worst blunders. And before i get into the details, let me just say that i advise you to do the same thing with your trading history. You can really learn a lot by systematically going over your past decisions. Know yourself and you need not fear the results of a hundred battles. Looking back at the trust history i notice sometimes the best time to buy a stock is right after the analysts cut their estimates. One of the best investments my Charitable Trust ever made was in march 2009 right near the big generational bottom when caterpillar ks giant equipment manufacturer had been going down for weeks on end as analyst raced to cut their estimates for what looked to be a bad quarter. They were stloeing throwing everything at it. They all turned bearish. At once cats business took numerous hits. They were cancelling orders every day. This was at the depths of the great recession. When caterpillar did report it was uglier than analysts had predicted. And some firms slashed estimates for the rest the year taking them down by an extraordinary 50 . Can you imagine that 50 decline in earnings estimates. Is this is important. Cat stock barely reacted falling only slightly and instantly stabilizing and most importantly were turning where it was when the hideous earnings announcements were issued classic sign of looking at a bottom. Right there. Cat was screaming, look at me. Look at me. The bad news is out. The worst is over and the best is yet to come. Could be dangerous activity if you come in too early, you can get caught. Sometimes the market will pretty much call the bottom for you. Thats what happened in 2009 when cat ordered awful numbers, the stock barely batted an eyelash. When you think about it it makes a great deal of sense, you want to wait until a stock is derisked until the bad news is shaked into the share price and could lead to profits. Sure enough caterpillar profited for months on end as business improved worldwide and analysts had to raise estimates from far too low, particularly 50 cuts. Cats earnings finally troughed thats the key word, they troughed. Anyone could catch the move after the hideous quarter of the investment cuts. Some are saying that was once in a lifetime situation generational bottom. Let me get you another more recent example, remember the incident j. P. Morgan had with the so called london whale rogue trader caused hiding 6 billion. The stock kept going lower in sync with the estimate cuts. Then one day it was reported that they loss 9 billion, several firms filed suit. Slashed estimates to match that 9 billion figure. However just like caterpillar, march, 2009 j. P. Morgan stock had already been obliterator ated and didnt get hit, instead got flat lined and inched up slightly, like with cat, the stocks telling you the estimates came down too far. Sure enough we learned the losses were contained at 6 billion not 9 billion and that was the moment had you to buy. The stock was clubbed down to 31 previous month, if you bought previous month you caught an immense rally, matter of fact over time you caught a double. But it did go almost straight from 31 to 50 in a straight line, wow, 12 months 61 gain. Same with fed ex. Cut their numbers twice, everyone cut down and next thing you know you caught almost a double. You simply need to wait until the estimates are so low they can be beaten. Lucky for you, the market will almost always tell when you it will happen as we saw with caterpillar in 2009 and j. P. Morgan and most recently with fed ex. When estimates get slashed and market doesnt go lower, thats screaming that a bottom is probably at hand. Is there any signals we can look for to find out if a Company Might do reverse stock split. When a stock goes under 5 management feels pressured to do it. Ive seen it in my time and its almost always a tail that things are worse not better. Be careful of stock splits. I dont care for them. Lets go to lee in colorado. In the pikes peak region. I love it there. I heard you say when market rallies 1 or more consider saling, is the inverse true should you consider buying if a stock climbs on a down market day . Absolutely. Yes. When you see stocks like when we had days with really high momentum stocks bucked the trend of the markets decline, thats the signal when things get better we are going to fly. Youre totally right. Lee in california. Gus in california. I was wondering if a stock has a high yield is it risky. If the yield is much more than average stock yields its a red flag. Theres plenty of situations where the yield is high and everything is fine. If most of the good yielding stocks are five six, and you get a ten or eleven thats a red flag and its probably not sustainable. Listen i know the market could get confusing. If you are looking for a sign a stock is bottoming, wait for a moment the estimates are too low. The market will always tell you. I got your back too. Mad money will be right back. If youre looking for a car that drives you. And takes the wheel right from your very hands. This isnt that car. The first and only car with direct adaptive steering. The 328 horsepower q50 from infiniti. Yeah everybody makes a mistake sometime classic Investment Advice there from odis redding. If you want to be a great investor dont need to just learn from your mistakes you need to recognize what your mistakes actually are and you need to notice what works. That might sound a tad trite, trust me it is not. The thing about being human is we have a hard time acknowledging what is going on in our own head. Were full of unconscious biases and that can help us learn. Im here to be your investing coach so i mention all this because it is important to remember that you need to approach all of this stuff imperrically, what do i mean by that . At my old firm i used to keep a box of trading tickets in my closet and i would look for mistakes patterns of wrongdoing and patterns of success that needed repeating. These days i dont have a box but i do have the entire record of my Childhood Trust which you could follow along online where we not only keep track of all my trades but all of my bullets explaining the reason for buying or selling a stock. Like i told you earlier i recently analyzed the last five years for my latest book and it taught me a lot. Some might sound hard to swallow. The numbers dont lie. What did it teach us i got another lesson you need to stop worrying and learn to love secondary stock offers. Weve all been conditioned to believe when a Company Issues new stock bad news for stockholders, or when Company Sales also bad news. Thats the way we think about these things. But it weighs for a moment and then it just keeps going on. But you know what these days that totally reasonable fear of secondaries, im banishing, im saying its a mistake. Because Interest Rates are still low, historically thats true even after the spring and summer of 2013. Companies can issue pay back debt and derisk their enterprises. For example the Real Estate Investment trust have done these deals and its worked fabulously. Because first of all the money is used to pay down expensive debt or refinance with cheaper date with lower Interest Rate that money saved straight to the bottom line allowing analyst to raise estimated once the refinancing is complete. Second stock up share price up. Third might allow the Real Estate Investment trusts to buy more properties leads to higher dividends down the road. Its a virtuous circle. You can find these deals at all sorts of companies that were hard hit by the housing smash. Take the martortgage company, Additional Capital allow them to purchase new homes. In february 2013 if you listened when i said buy the stock on the offering or ahead of the deal i caught a lot of flack on that as many assumed the issuance of stock signalled a top but there were plenty of institutions out there chopping at the bit because they realized the company could flourish in the virtuous circle i outlined. Thats why you had to take action soon as the deal was announced. Sure enough 8 8 in february later at 12. When you see deals you need to take immediate bold action. The opportunity wont last if you wait too long. Another secondary i think you should jump all over, the oil and gas pipeline players who are always issuing stocks to crisscross the country with pipeline to move gas to the rest of the nation. Pipelines are the cheapest way to transport oil and gas and safest versus trains. I0p i. But building is expensive. And master yielding contracts can be in dangerous stock, can get sold as people rush into bonds for safer yields. However when rates are stable you should jump all over these secondaries, they allow the pipeline to meet surge and demand from domestic oil and Gas Production and more capacity means more distribution down the road. You should aultzlways keep an eye out for secondaries deep in the hole. Meaning sold at lower prices than where they were trading at now. Many are priced deeply in the hole. September 2013 Company Announced wanted to sale 1 billion of stock, the brokers let it be known that linked in willing to sell soon after it was a good deal for all involved and stock returned right back where it was before secondary was announced. Once again gained favor with internet status people. Same thing happened with zillow priced secondary deep in a hole after another good quarter and stock jumped almost 100 . Now you only get stock from full Service Brokers as large clients do with these deals with investment bankers, these deals are almost always worth trying to get in on. Just rarely like in march 2014 did some of the deals go wrong. Weve now reached a moment where friefprivate have become public. In the past ive tended to 12450 shy away for fear the private equity firms knew something we didnt and the stocks were about to get clobbered. But thats too cynical. Theyve been refinance at much lower rates with the capital raised with secondaries. Again means immediate boost of earnings and subsequent lift of the stocks. We seen significant deals with dunkon brand, hca and aothers. Heres the bottom line forget conventional wisdom that secondary stock always means the company is trouble, theres many cases secondaries can make fabulous buying opportunities like when Companies Use the money to retire or when pipeline raise money to expand or when you get secondary newly private public back names and of course when you get a deep in the hole deal where the price is just too good to ignore. Much more on mad money tonight. Got to know when to hold them when to fold them. Earnings are great but not everything. Im dishing on the metrics that could spark a surge in the stock. Ill help you draft an all start portfolio, stick with cramer. When a rewards card is designed to sync with your life it gets talked about. So you can live the way you live, and enjoy all the rewards. Chase sapphire preferred. So you can. You can call me shallow. But, i have a wandering eye. I mean, come on. National gives me the control to choose any car in the aisle i want. I could choose you. Or i could choose her if i like her more. And i do. Oh, the silent treatment. Real mature. So you wanna get out of here . Go national. Go like a pro. Ttlwhun ]wual4m3qj w . 5 [ x4c8q6hcy 76luu , h tt ff muyi1;huikp 3uzu and the most advanced vehicle stability system in the industry. Youll ride with a feeling of complete freedom and confidence. Visit your canam dealer and test drive the spyder f3 today. If ever there was a musician who understood the stock market it was kenny rogers we got to know when to hold them when to fold them know when to walk away know when to run. Its fabulous Investment Advice and after painstakingly review trusts i got suggestions when you should fold them if not walk or even run from your positions. Let me remind you im not just blowing smoke. Not just sharing my opinions. Everyones got one, they all stink. No, im sharing the results of my research of what works and what doesnt. Research for my book. So in the spirit of gabbling cash is not always king when it comes to stock. If you buy a stock because it is on a pile of cash. You could get hurt. Pel get lulled into buying stocks at high levels because necessity had so much cash on the books. You probably heard this or that stock is a gigantic percentage as if cash is good news. Maybe in theres extra income but actually acash by itself means little. What does matter is how that company puts that cash to work. Intel, cisco and microsoft give nice size dividends but they havent met much. These titans have also bought back a lot of stock. Im not against stockbuy backs but they often bought it back badly maybe too high at times, maybe opportunistic weakness as i see on the best i see which is apple. Comes in agreggive when the stock is down but not when the stock is moving higher. The bad buyers pick up stocko believious of the moment. I think the cash sometimes is wasted on undisciplined buy backs at not great prices. When you see a company doing that, you know what maybe its not the right time to invest. Maybe think about another stock. Contrast with one of the best performing stocks since the generational bottom in 2009 that is wyndham worldwide raun. He buys back stock when it can make a difference when others are unwilling to step in and take advantage of the weakness thats when wyndham comes into the market plus they wrachet up dividend far more than expected. Every year excess cash goes to you the shareholder, he doesnt sit on it and watch it grow at a ridiculously low rate of return thats slower than watching paint dry. No he is part of a new breed of executives, you stick with him you own windham and you get your cut of the business. Hes the model of what many Tech Companies need at the helm. Someone who understands the stock price going higher is very important and recognizes it is part of his job to figure out the best way to make that happen. Let me tell you another sign you should fold. If you have a company blaming their customers on the poor performance, time to walk. Back in 2011 juniper was trading in low 40s and blamed japan for lack of orders. Sounds right to me the company was devastated by fukushima and other disasters. I bought into it. I stayed. Seemed right. Soon it dropped to 30s. More worries about missed orders this time from europe and United States. Still stuck with them because the company had a ton of cash. It was clear europe had a lot of problems. I ascribed it to the fact u. S. Government was a customer and we got the budget freeze. Wasnt until the stock dropped to the 20s that i realized it was a darn lame alibi. Turned out major competitor cisco was kicking junipers butt. Customers wherebying else where which i didnt realize until we dug deep into ciscos quarters. The information was there to be had. But only from a competitor not from the Company Source itself. Simple moral. When the Company Blames the customer, check to see if the customer is buying from a different venter. Know when to hold and when to fold. When a company is sitting on a mountain of cash and doing nothing, thats a stock you dont want to own. And when a Company Blames customers a, always be skeptical, those customers may be giving their business to another player. Now to paul from texas. Id like to take a second to thank you and your staff for all the energy and time to help us home gamers to participate in the market. Thank you im just trying to teach people to be better investors and im doing my best. Thank you for saying that. How could i help. Yes ive been looking at mlps i know you discuss those on your show. Yes. Im trying to find out if you can teach us the additional homework and data to look at before decide chgwhich segment of an mlb to buy. I got to tell you, i have to put together so much information on mlps. I piece it together from all Different Research houses. I use rbn, a terrific oil Analysis Company by rusty brazil who has really helped on those partnerships. For the most part i try to listen to the conference calls. These companies are very trans parent. Thats why i like Kinder Morgan they tell you what you need to know. Tammy in iowa. Hi jim. I love your show. Thank you. However, i am new to the market and dont have any investments right now. I wanted to do some homework how maybe i should start out on some investments. Well you know what. I want you to paper trade. I want you to buy stocks, get the feel for it. Dont put real money out. I want you to feel what it is like to lose money. What you would do if the stock went down. Trade on paper. I even made my traders at my Old Hedge Fund learn by trading on paper first. Then when you get very confident you can use your real money and i bet will you know exactly how many to buy and how much homework to do. Bob to missouri. Hi jim, this is bob from kirkwood, missouri. Okay. I would like to get your opinion on covered call strategies, like, say, you got a stock, or say a stock is one or 1. 2 beta file on the market and go out no three months with 8 to 10 premium which i would be happy with and you collect Premium Options and dividends. A lot of my friends like them. I have always shied away and heres why. Because i dont like to cut off my upside. Same reason i dont like to sell put that can make it