Transcripts For CNBC Mad Money 20140101

Who i am and how i got here. No. Not i am jim cramer, host of mad money, squawk on the street. That plus an avatar and 140 characters pretty much sums up everyone these days. I want to you know more than that, although it did take me two years to learn an avatar wasnt a movie and a hash tag wasnt a number sign. What i want to do tonight in an extremely special and personal show, even by my own whacky standards is trace the arc that brought me to mad money, not for some autobiographical ego trip but to give you some money making lesson from the phases of my various careers and how you can profit from them. Remember, in the end this is cramerica. In short im going to give you the best of cramer guide book. So i can help you become better than i have ever been or ever will be, and thats the ultimate goal of mad money. Lets start real early, back in the time machine. My love of stocks didnt begin after law school or college or even high school. My love for stacks actually started back in fourth grade. See my dad would bring home the philadelphia bulletin, at that point one of the largest newspapers in the country. Great afternoon paper. Thats when he returned from work every night. I wanted it for the comics and sports. I was a ridiculous phillies fan back then. If i could go back i wouldve been a yankees fan. 89 miles south of new york. No one would choose to affiliate themselves with a team with the most amount of losses in all of professional sports history. Curiosity has been a blessing and a curse of mine. Anyway, there was always this solid chunk of the paper that seemed impenetrable to me, called the business section. It had these giant lists of names and agate type that seemed to go on forever. They were the other tables. Different from the batting average tables and box scores i would scrutinize. When you read them from left to right it made no sense. Open. Range. Close. What open . What range . What close . What were these strange things . Why did they matter . I asked my dad, who i know dabbled in the stock market. I would hear him get mad when he would hear prices mentioned on the radio. In particular he always seemed angry when i heard something called National Video. And how National Video went out. I didnt know what National Video did or why it went out. I know it made him furious. I wanted to find out more about these things that made him react with such fury. So he sat me down and explained each of these lines represented the line of the stock. The range was how low and how high it traded during the day, and the close was how much it was worth when trading finished at the closing bell. It fascinated me. How could there be so Many Companies and why the heck did they trade in ranges, and what did it mean to close . He described to me that people tried very hard to figure out each day which stocks would go up at the close and when to buy them so they could make money from the increase during that range from the open to close. Frankly this struck me as downright silly. I told him when i looked at the baseball tables i was always trying to figure out who was hot, who would go up in average and who would go down and what it meant for the teams i liked. He said it was pretty much the same for stocks. Some players were doing just okay. Some were as hot as a pistol. Some were duds. I wanted to know if i could learn something from just following the ranges, reading the tables. He said why dont you try. It seemed in my house the radio was always on until pop put the tv on in time for dinner. We watched the news while we ate dinner. Most of the news was about the war. Meaning the war in vietnam. It was frightful and scary. Fortunately the war was winding down at the time i got my draft number and it was a high one. Right after the world news on the radio or tv they always mentioned the Dow Jones Industrials average, and they either talked or showed the most active stocks. Then the ones that had done the best or the worst. National video was often on the worst list, i discovered, hence the anger. So what i did was write the names down that i heard and i tracked them. Kept them in, believe it or not, this ledger that i still have. Here it is. What a terrific game. I was trying to figure out the next move of the stock, even as all i knew was the name, polaroid, xerox, National Video, pan am, united. Most of them were defense stocks and they went up a lot in tandem with the war. Hey, so i followed a lot of those and a bunch of others. Look at that. Conair. Eastern. National rca. Admiral. After a year, i decided this was as cool a game as imaginable. I wanted to introduce this to my fifth grade class. I showed them my ledger, inviting everybody to play. I have to admit that not everyone was into it as i was. The darnedest thing happened not long after. My dads company at the time was called national box company, represented the 3m corporation. Then the Minnesota Mining and Manufacturing Company in the philadelphia area, selling tape and a fancy ribbon that bowed easily. We were talking satin ribbon. Had to make the bows. Triple m as we called it was always innovating, coming up with new product lines. It still does. Which is why i favor it. Pop came home with a new line of 3m he was selling, games. They got into 3m book shelf games. He said perhaps i might want to learn more about how the stock market really worked, and the company had created two games about business. Acquire about takeovers and stocks and bonds of which i am fortunate enough to have gotten a copyright here, courtesy of george, who is producing mad money who gave to it me for the holidays. I almost cried when george gave to it me. I loved that game so much. I have subsequently asked the ceo of 3m to bring the games back. The point of mentioning all of this, from my own makeshift stock game, to stocks and bonds which george bought off of ebay, is that stocks are fascinating enough to get your kids started in them right now. Its easier than ever. Pick some stocks. Maybe not of defense companies, although they are performing in an odd and positive way with the budget pressure and the winding down of wars. But companies that are familiar to your kids and have them track them and guess which will do better over time. Not the Growth Corporation of america, not the pioneer mutual fund. Stocks that are real. Heres the bottom line of my childhood stock market obsession. Get started early, and they may play for life. Because the stock market is a long term contest, and one i think the earlier you get in, the more you can win. Im going to mickey in new york. Mickey. Caller hey jim, i wanted to thank you for all you do. Ive been investing since i was quite young. What kind of changes should i make to my investing process as i get older. When youre in your 50s 50 bonds, no more. Interest rates are way too low. Find some conservative stocks that give you good yield and shift over time and you can pick up some income. Rick in arizona. Rick . Caller hello, mr. Cramer. How are you . Real good. How about you . Caller im doing great, sir. My question i have for you, i have a couple of young children, trying to get them started in investing. The question i have is what advice and what are the most essential items or ideas on investing concepts do people need to know when they start learning about the market . First thing they need to know is what they own and the idea behind that is to own things like disney, dominos pizza, mcdonalds. Go to the mall. Go to costco. Go to places that youre familiar with. Read the annual. Buy a share. One share. Get him or her involved. Get them started early. Teach your kids about the market. It is a very valuable lesson, and there are many more coming up on this special edition of mad money. Well be right back. Announcer dont miss a second of mad money. Follow jimcramer on twitter. Have a question, tweet cramer madtweets. Send jim an email or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. Welcome back to a bizarrely special mad money, where im trying to teach you life lessons in investing from my life. In investing from my life. While i am not a dollar sign represented by a man or a stock symbol for that matter, ticker jim, i have stumbled around the stock market long enough in life to learn a thing or two, and tonight youre getting some of that wisdom from the school of hard knocks. Dont you love it at the beginning of a pro Football Game where the player says his name and the name of the school and some say the school of hard knocks. Youre getting the on tv version right here, right now. We covered how i first got involved, my fourth grade obsession with keeping a ledger to track stocks, and then ultimately to learn how they trade through the greatest game on earth. No, it wasnt monopoly. It was stocks and bonds. But with its little certificates and its game boards, and its cards, it tells you about news and how that would send a stock higher or lower. Thats what this was all about. I left the stock market games behind me by the time i got to middle school. Which was then called junior high. My obsession became sports. I ran track, of course. The other thing i cared about was girls, whose movements were more elusive than any of this stuff. They were more elusive than the ranges of stocks. That was a random walk down springfield high main street. I couldnt win for losing. Thats the subject of a different show. However, my father did ingrain in me the desire to save. Early on i learned even in high school, you got to save. I saved as i bussed tables at the old block and cleaver. I was a vendor in veterans stadium. Sold first cold soda, ice cold and then ultimately graduated into selling ice cream. Very quickly at that job i learned the value of market power. Specifically cornering the market, and i paid people to give me the exclusive right to sell ice cream on the 600 and 700 level of the vets stadium. Can you imagine how much money can be made if you had the only franchise in the whole upper deck, even for a team as horrible as the phillies back then . By paying those guys not to sell ice cream against me i made fortunes. Maybe the other time when Steve Carlton would pitch. He got players out so fast i would get stuck with unsold ice cream, you had to buy the ice cream from the company before selling it. I would take a genuine beating. Talk about learning how business worked. The shelf life of ice cream on a hot july night is short as short can be. I might jest with you about your name. I learned nicknames at the ballpark. I loved its bizarre false intimacy. I made a ton of money. I opened an account at fidelity with the magellan fund. I contributed a little every week. It was the Top Performing fund. Peter lynch wrote two investment books, one on wall street and beating the street. I didnt save enough when i got to college. The money paid was work study and went toward my tuition and room and board. When i got out of college and after a lot of attempts to get a job in the newspaper business, rejected by more than 50 papers, i have every single rejection letter in the trunk. I ran a position as a general assignment reporter. It was hard when i got started. How poor i was. Nevertheless, poor, 156. I contributed even then. I put a few dollars away when i could. Not long after i applied to and got a job at the nowdefunct Los Angeles Herald examiner. Making 179 a week. It was in a town about four times as expensive as living in tallahassee. I found a bungalow apartment in the fairfax district. Pretty sketchy. Nicer now. Around the corner from pioneer chicken, which was way too expensive for me to go to. A few weeks later i was stalked and broken into repeatedly, something the cops were helpless to stop. At the time i was assigned a story at san diego, a Horrible School shooting. When i returned everything was gone. Everything i had. So it began. My terrible but thrilling six months of living in my car, basically trying to get by, the only upside being when you might have met a women, it was pretty easy to figure out the end of the night query, your place or mine. As much as i knew my ultimate goal was to save enough to get an apartment, people would take me in now and then so i could get a shower, change, get a good nights sleep. I still never quit saving. I remember cashing my paycheck every other week and writing a check to Fidelity Magellan Fund. You only had gasoline, car insurance, food if you were living in your car. How poor was i yet still putting money away . When i got mononucleosis and jaundiced liver, i had no health care. The hmo that my paper belonged to had no branch where i was stationed. So i had to go to migrant farm workers clinic to get fixed up. I was making weekly trips to the doctor. The upshot, giving money to the best stock picker of all time i managed through all the years, 35 years later to put enough money away to take advantage of the great bull markets of our time. Not to brag but to teach. That money ultimately amounted to a fund well into the six figures, not because of my capital additions. I stopped putting money away in that fund years ago, but because of the power of compounding with an amazing investor at the helm, i just let it build. I think the takeaway here is i want to you save no matter what. Obviously the earlier the better. When cnbc has those allstar managers on, if you dont have time, send the money in as little or as much as can you. If i could still send those checks to the Fidelity Magellan Fund when i was living in my car, sick as a dog, kept warm by a bottle of jack and saved by a pistol by my side, the most down and out you can be, you can put some money away, too. After the break ill try to make you some more money. Announcer in the never ending battle for realtime data, news and the american way, it is time for super mobile cnbc. Realtime quotes, sure. Breaking news, of course. But theres more. Now, access live cnbc tv with your bare hands. On your ipad, iphone. Its an app, its video, its cnbc tv live and on demand, online and away. Were riding the delicious magical money mystery tour tonight, and im giving you the life lessons i learned the hard way. I told you first how to get your kids started early. I told you about how nothing should ever stop you from investing. Listen, if i can do it living in a 1977 ford fairmont, you can put money away too. Right now i want to tell you how i got started in individual stock picking, something i still believe in, even after seemingly interminable periods of pain, chaos and chicanery. Yes, its the reason i believe you watch, certainly your inclination. Thats much like the funny outfits, the references and the outrageous sound board courtesy of when i used to have a radio show similar to mad money called real money. If youre picking stocks, playing with real money, not just with a ledger, or with a game of stocks and bonds, you need to open an account. When i got started in 1979 there was no such things as an online account. I had my money with fidelity. When i first started, i didnt know where to look for ideas, so i turned to forbes. People at forbes, dont take this personally, but i read a nifty article about an orange grower in florida. It seemed to be very compelling. I bought first thing ten shares for nine bucks. A week later a frost hit and wiped out the whole crop. My investment was more than cut in half. I was completely devastated, but not defeated. I sold it out and took the capital and went back to forbes and bought seven shares of bobbie brooks. The Company Reported a bad quarter and my money was halved again. Fortunately i had a decent job at a magazine. I was making 20 gs and living in a less than a swank studio near the united nations. The cheap 400 a month rent with the sofa bed, twice the rent for a beautiful apartment in tallahassee, allowed me to replenish my coffers. After a particularly hard night on the town i fell in love with the breakfast at bob evans farm. Finding out it was publicly traded when i went back home, i visited the huge fabulous midtown Manhattan New York Public Library and devoured everything i could about bob evans farm. They had magazines with articles, microfiche, a four month old financials and investment publication with write ups that allowed me to compare it with other companies in the industry. I knew i had a good one. I bought 20 shares. The stock went up immediately. And a stock split. I figured out the first component of investing, know what you own. Like it, even. What did i know about oranges or womens fashion . But a plate of eggs and sausages . A company i found, long tradition of good service. Now that was for me. Next up, Standard Press steel. Well no, that became sps technologies, an outfit from my old home town. They made screws for airplanes. Why sps . Because a buddy of mine from high school told me they were hiring like mad. Wondered if i was looking for a job, paying good money. I had a job. Back to the library for more research. Solid company, no doubt. Nothing in print about its hiring push. Ripe for a trade, right . No one had that skinny. You know it doubled not long after and by that i caught the bug for good. 23 years later it would be acquired by precision cast parts. So now i figured it out. Best investment ideas come from what you know melded with information from public sources, even if they are as late and hard to source as taking a trip to the New York Public Library when i was supposed to be working. I didnt like the random way i was making money through this. A friend from homes lucky call about jobs. So random. A hearty breakfast at bob evans farms. Theres got to be a more methodical way, right . Then it hit me. Look around at work. At the time i was covering mergers and acquisition, profiling some, following the deals they were on. It seemed like every other deal was in the oil patch, one after another after another, smaller to midsize Oil Companies were being acquired. All i was doing was standing around and writing about it. So i went back to the library, took out some editions of value line, a Stock Research magazine, and checked out the pages devoted to Oil Companies. I cross referenced them to other research to find out which one could be acquired without problems. I settled on an oil company with a real gusher in indonesia. I didnt have to wait long before they were bought. I almost doubled my money. Another lesson learned. If you want to play takeovers. Buy companies that would do well on their own but are under managed, which is the consensus i found about reading articles about the oil enterprise. Another oil company with bigger scale could do more. As much as i had hit some winners, i was distraught that i had given up the ghost in those first few trades. At the time i was hanging around the track. Yeah, the track on weekends. Mostly aqueduct, nearby. I learned how to handicap by reading the books of the the Washington Post racing writer. They may be the second best investment books. They teach discipline, how to identify the best thoroughbreds, the best long shots, going to out of the way tracks where information was less wellknown. Find the ones where the payoff was more sure and bet big. Cut your losses if youre having a bad run. Every one of these lessons can be applied to the stock market. You can take a huge swing when you know what youre doing, particularly when others dont on a less wellknown stock. Dont just gamble on stocks for the excitement or fun of it. Most important, be disciplined, dont let your losses pile up. After five years of professional journalism, i decided to hang it up and go back to law school. I saved enough to pay for my first year, all in the stock market, because i would never be able to make enough if i kept it in a savings account. An index fund would have made me nothing. So heres the bottom line. You want to get started . Go small. Invest in what you know and research it intensely. Back then i got all data from the public library. Now its as simple as a key stroke and the information is free and ubiquitous. Research, analysts and the Conference Calls i tell you are a must if youre going to know what youre doing. Simple . No. Lucrative . You bet it is frank in arizona. Frank. Caller jim, whenever im considering buying or selling a stock, i look at the bid price and the ask price, sometimes that price range is narrow, sometimes its wide. How is that information useful in determining if its time to pull the trigger . Look, if you like the stock ill tell you its irrelevant. What really matters is, because if you want to hold the stock for a while, you just have to hold it and forget about that bid ask spread. I used to spread buying stocks that had, we used to say we could drive a truck through them. Things are easier. Dont worry about the spread. [ man 1 ] were now in the approach phase. Everything looking good. Velocity 1,200 feet per second. [ man 2 ] your looking great to us, eagle. 2,000 feet. Still looking very good. 1,400 feet. [ male announcer ] funny thing happens when you shoot for the moon. Ahh, thats affirmative. [ male announcer ] you get there. Youre a go for landing, over. [ male announcer ] the all new cadillac cts, the 2014 motor trend car of the year. Tonights show is all about you learning from my attendance at the university of financial hard knocks with a major in investing. Ive taken you through the importance of Getting Started early and saving no matter what. Ive shown you how to spot winners and avoid losers, all through looking at actual examples of my life. Now im going to give sense of how you can become a trader if you want to, and be a good one at that. Hey, you know what . Mad money has changed and changed time and time again over the years. Its been on for so long. I have deliberately skewed it in the last 500 someodd shows away from trading and much more oriented towards investing. Theres so many more obstacles to trading than investing these days. You have to watch your position like a hawk. You cant do your job at the same time and also follow the market. Theres so many people with great sets of tools and ability of accessing information in real time. Youre going one on one with the big boys if you attempt to try trading at home or at work. Its almost a suckers game. Theres some advantages that you have now that you sure didnt have when i started trading in my law school dorm back in 81. First, commissions are so, so much lower, so you can get in and get out without much friction and after commission profit. Thats why im not worried about the spread as i said earlier. Second the information you need is on your personal computer, even your smartphone. I would have to call brokers all day. Third, trading is lightning fast. Back then i didnt know what price i got my stock when i bought it. When i was in class i had to use pay phones. You had to wait in line while some kid chatted endlessly and aimlessly to his girlfriend or some woman was calling her mom. At the same time i had to go with what i knew. I knew individual stocks for all the stories about harvard law, including the movie paper chase. I can tell you that there was a ton of down time and a real Good Business School Library across the river that had research, as well as up to date microfiche quarterly reports, those little plastic things, all Things Considered i possessed the best available Public Information around at that time. The first thing i decided to do given the circumstances was to find one good trading deal a week. If you want to start trading, i discarded a ton of ideas of stocks that had catalysts, upcoming reports, possible mergers. An article on the front page of the New York Times might be talking about some breakthrough in medicine, a brokerage report might discuss potential for oil find. I started my first writing about the market. Yeah. I wrote a newsletter called mr. Bullish, which i mailed to my parents once a week. Clearly articulated the thesis behind my trade. I typed it on my olympic typewriter. I would do no trade if i couldnt explain exactly what the company did and why i liked it and what would happen. I had that level of discipline. No buying of anything that didnt have an exit strategy. I had to have an exit strategy from the moment i put the trade on. An important lesson, made discipline by the insistence of a written thesis before i pulled the trigger. When you trade, you must trade with confidence. None of this scared stuff. You can easily be shaken out by the Broader Market if you arent. You want to trade with confidence. Ask yourself, would you be willing to put a Stock Recommendation on your voice mail and update it every week . Hi, this is jim cramer. Im not here right now but i like monolith memory ahead of its next quarter. I had my level of conviction about my pick of the week. I was putting my money where my mouth was. I got some freelance work for New York Times and moonlight work for a professor. It wasnt before long that marty peretz, a publish for new republic magazine tried to get me to write a piece. I neglected to call him back. He got three weeks of trades off of that answering machine. He said he made more money from my answering machine than years of professional Money Managers and wanted to give me half a Million Dollars to manage. He said he had confidence in me. Shortly thereafter, he actually did give me a check for half a Million Dollars. That was real money back then. I had it in my hands. It was like too hot for the touch. I ran down to fidelity with the money. I went right to work trading. Almost immediately i lost a ton of it. And i could see how i would have to wash dishes at martys house and mow the lawn for about 125 years to make back the 70 gs i had blown to smithereens. My mistake thats Clint Eastwood told us, a man has to know his own limitations. You cant put the money to work all at once, you can do so only after ideas you knew had a chance to pan out. Knowing that you would be gone whether it worked or not to keep that discipline intact. I violated my own rules and i had blown it. I confessed to marty my sins and said you really should take whatever is left of the money back. Instead he wanted to give me more money. He was betting that i learned my lesson. You know what . He was right. I then reverted to my old style, trying to be right about one idea at a time, keeping the rest in cash, going big when i had the most conviction. The way any good trader would do. I slowly but surely made it back. I also paper invested, a more active but not truly investing. That would become the beginning of my actual professional investing career. Heres the bottom line. If youre going to trade, make sure you have a catalyst, an exit point where something is supposed to happen, and youre out of the stock, either way either way, because youre trading, not investing. You need conviction and you have to ask yourself would you be willing for the world to hear. Hi its me, im not here right now but i want you to take a swing at disney ahead of the analyst meeting. If you can do all those things start small. Give it a try. Stick with cramer. Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. Welcome back to this special autobiographical mad money. Now were up to the professional grade, my time when i started at Goldman Sachs. Now i had been courting and been courted by Goldman Sachs for three years before i got a job. It was then called security sales, helping individuals and small institutions manage their money. I got a ton of history of those years as well as some of what i talked about earlier. You can get the skinny at my goldman days. But thats not what tonights show is about. Tonights show is about learning how to trade and investing by studying with me at the university of hard knocks. Now i will dispense with the anecdotes tonight. Its fine to have fun. You can go read the books. Im about making money. First, thats where i began to understand the process of actual money management, not picking a stock here or there, but the process, the ability to build a portfolio from the ground up. And i had the best teachers in the world at Goldman Sachs. One of the great Hedge Fund Managers of our time, lee cooperman. He put on an investing clinic almost every day of which i never missed a session. Hardly an hour went by when i didnt hear a new great idea to explore. You know who i really learned from . My customers. Chiefly wealthy individuals from all walks of life. It was at goldman i learned something that still isnt understood by many, and thats individuals can and do beat the market quite regularly. Why dont they know it . If they only worked at goldman with me they would see it, they would know what i saw. No, they were all unpractical. When i was at goldman i had nondiscretionary accounts, meaning that i wasnt allowed to invest anybody elses money with my own trading ideas or investment unless i could win them over to make the purchase. Remember, i was on commission and made money with buys and sells. There was no 1 fee or 20 for the wins. That came later with my hedge fund. Thats where i learned how important it was to talk over a story with an individual, be able to articulate it in a way that made sense. Can do you that to someone if you were picking a stock . You had to know your stuff. I often asked the buyers questions whether they knew enough about the stocks, their stocks, about the ones they suggested to me they wanted to buy. I wanted them to be as educated as possible about my idea or their ideas. Thats because i knew that stocks go down, and i knew if it went down lets say if it went up it would be their idea. Right. If it went down its on me. And that is just human nature. I realized that very quickly. What else did i learn . How about humility. It was at Goldman Sachs that i first figured out how humbling this business could be. The great bull market had just started not long before i had been hired. When one of your ideas went against you, you had to get on the horn and explain either why the person should buy more, or whether they should cut their losses. Thats why you always have to recognize how fallible investing can be, and you have to understand what to do when stocks go against you. I learned to let your gains run. Many of my clients were terrific Business People that didnt know that much about stocks. They were fabulous at their own enterprises, building up great wealth through actual companies. I had this real cantankerous client, a real estate tycoon. He had worked hard to get where he was. I was working hard to try to get him as a client, trying to win him over, and it took me ages and ages. I told him when i finally convinced him that he should work with me that i would be judicious, that i would work hard and get it right by him. He said point blank he didnt want to trade. No trading, jim. I want longer term investments. At the time i liked kimberlyclark the paper company. I still do. I told this cantankerous client that i thought this one, kmb, would be terrific for his portfolio. He agreed. I got it. I got the sale. He told me to buy 1,000 shares. I got it almost immediately it went up eight points. It was a dream. I had a winner. So i called him, i said bob, bob, i want to ring the register. I want to sell the 1,000 shares of kimberlyclark. I thought he would thank me. He was furious. He told me that i had said kimberly would be good for the long term, that it could have great gains over time, he wasnt interested in making 8,000. Then he questioned my integrity. He wanted to know if i was churning him. Thats a horrible charge, meaning i was just trying to generate commissions with his money. You know what . I was scorched and torched. But he did teach me a terrific lesson. Just as you dont want to turn a trade into an investment because thats usually a sign youre embracing a loss, you dont want to turn investment into a trade. You have a good one, let it run for heavens sake. Bob was right. Kimberly ultimately doubled, and i was vindicated despite myself. Finally, i learned the Science Behind building a portfolio and understanding how to create long term wealth. A lot of my business came through people who came into a large amount of cash. Now these people tended to be rather unsophisticated about their money, even as they may have been sophisticated about Something Else in life. I regarded my first job as listening to their needs, trying to figure out what they wanted, were they conservative, did they want capital preservation. They didnt want to risk their money. Were they aggressive . Did they want capital appreciation. Build that wealth quickly. I tried to get to know them and i urged them to get to know themselves, just as you should know yourself. You may think you want to get rich quick. Believe me, you want to get rich carefully. Can you handle the pain of a market decline . Would you prefer fixed income . Do you want to participate in new issues . Try that. Could be too risky. Do you want to try to hit it out of the park with some capital, maybe a larger part. Many of you are familiar with these lessons. I try to teach you how to know yourself and to know what you can handle and cant. Finally, this is when i learned the value of diversification. Oil companies can double and double again a short time after they struck oil. We figured out how big the finds were. Everyone got caught up in oils. I wanted oils in my personal account. Every day seemed like another great day. Oil services. Oil drillers. Oil platforms. You name it. Then one day oil, the commodity, plummeted in price. The saudis started pumping like mad. Global tensions settled. Those who had nothing but oils, we were crushed. I had understood firsthand from right then the concept of diversification. I never again intentionally avoided diversification. Hence why i think its so important, because i almost lost everything and i worked hard to get it. I learned from my early days at at Goldman Sachs Core Principles of investing. Remember all my investors who consistently beat the market on their own, in ways they liked, aided by people like me, who would work with them to put their plans into action. You follow my love affair with stocks as a boy to show the importance of Getting Started early in investing. You lived with me in my car and you learned how to find the good ideas, how to research them. I want to wish you success in trading and investing and to remind you when you hear from the gray beards who say you cant make money at home, the story of my life at every turn is the opposite. You can make money in many different ways. With managers, brokers and by yourself. Stick with cramer. I like to say theres always a bull market somewhere, and i promise to find it just for you right here on mad money. Im jim cramer, and ill see you next time i mean, youve been called a lot of names. Youve been characterized as a hero and as a villain, a martyr, terrorist. Im not yet a martyr. Right. Lets keep it that way. Julian assange, the nomadic founder of the website wikileaks, is under legal and personal attack from the u. S. Government for publishing military and diplomatic secrets. When we met him, he was under house arrest in the english countryside, where we conducted the most extensive Television Interview hes given about his life, his beliefs, and his concern about being charged and extradited to the united states