From all of this . How do you protect yourself from thchicanery. If youre lucky, if youre able to avoid it, great, but you cant game fraud. You never know when its going to strike. Second, therell always be down markets. I cant protect you from an economic crash and what it would do to the stock market. Even diversification, which we always call the only free lunch on wall street only caused you to lose less in that era. Consolation maybe the great destruction of wealth, well, lets just say nothing can protect you if you own stocks. But what i can do is offer you some simple rules tonight that will let you have more confidence in the stock market even if you think portions of it are rigged or beyond your comprehension. And the first rule, know what you own. I know it sounds simple, of course, like everyone thinks they know what they own. How does this protect you from the myriad ways people and machines can abuse you . First, if you actually know what stock you own. Okay. And the stock goes down, a la the flash crash, youll be able to take advantage of the mechanical lunacy and buy more at lower prices than you ever thought youd get. Using limit orders not market orders. Second, if you know what you own, you can handle a stock that plummets take facebook. Its a pretty good company. Maybe you can buy it on the way down, get a better average. Third, if you know that you own what you own, then who really cares about guys like the raj or any of these other guys that are nabbed by the u. S. Attorney . What does it mean . If you know what you own, you are in control of your own destiny. But how do you know if you know what you own . In other words, a lot of people think they know what they own. Its not a syllogism, its a real issue. Heres my answer, its a practical way to look at it. First, say you stop me coming out of the squawk on the street post 9 00 one day down on wall street and this happens five or six times every single day. Lets say you shout at me and say, hey, cramer, what do you think of that xyz corp. . You know what i do . I say, hey, listen, what do you think . Tell me what it does. Tell me why you bought it. Do you know that the vast majority of the time people dont even know either answer. They dont know either answer. They usually got some tip they saw some chart, they heard from some uninformed source it was going to the moon. But they have no idea what business its in or how it does or how its doing. They dont even know in a lot of cases what it makes, how it makes its money. They dont know if it pays a dividend. They dont know if it makes money or loses money. They have no idea. By the way, i see this all the time too. People say should i buy more . Should i cut my losses . I say why did you buy it in the first place . And if you dont know, then, of course you should sell. Heres what you need to do. Ask yourself the same questions i put to the perfect strangers every day. Can you answer them . Do you know them . If not, you shouldnt be investing in that stock, you shouldnt be investing in any stock until you do. Heres the bottom line, the first rule of protecting yourself is get some knowledge, please. Know what you own. Can you describe it to me if you see me at wall and broad . Can you tell me what it does and why you bought it . And give me say a threesentence pitch about why its good . If you cant, dont bother me and dont bother buying. Heres a promise and a prediction. Youre just going to lose yourself some bigtime money. Why dont we start with some questions. Lets go to scott in colorado. Scott . Caller hey, booyah, jim. Hey, jim, i have a question about price targets. When an analyst sets a target price, how does that fit in my planning for evaluating stocks . And when does that price target expect to be fulfilled by the analyst . Well, one of the reasons why i am neutral on price targets, we do some for actionsalertplus. Com. As the stock goes down, the analysts keep making their price targets lower, and they make the price targets larger as the stock goes up. What i find valuable is what o so it really isnt all that valuable. They think the stock is going to earn. And then we try to apply a multiple to it. So the key thing is the earnings estimates in the future. Thats why stocks trade where they do, profits and then we can figure it out on a casebycase basis. Dont use the price targets. Steven in california, steven . Caller yes, jim, booyah to you. Booyah back. Caller okay. I was wondering, i bought a stock before and it had a reverse stock split. And it didnt do that good. Im wondering when a company does a reverse stock split, are they trying to make it more interesting for other companies . Or are they just trying to save money . No. No, steven. Its a great question. What theyre trying to do is save embarrassment. Citigroup did this. They really felt that a stock that was under 5 for instance, wouldnt attract institutions. They like to buy stocks over 5. It was a way to be able to gussy it up a little bit. It has nothing to do with the fundamentals of the company. Dont ever be confused. Doesnt help the fundamentals or hurt them but makes the stock more investable to institutions whether you think it should or not. Everyone needs the stock market. Everyone needs a Survival Guide to the stock market. And its a jungle out there. So the way were going to start is, if you know what you own and can explain it to me, then you can buy more if it goes down. Mad money will be right back. Dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer, madtweets. Send jim an email to madmoney cnbc. Com or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. Jim cramer, leveling the Playing Field for all. Im not walking away from this market and you shouldnt either. Huddle up, cramerica. Mad money kicks off weeknights. Welcome back to cramers stock market survival school. Where im giving you your ged in trading during tough markets, your b. A. In investing when stocks are going, hey, your masters in what to do when the machines rise up kind of like terminator 2 judgment day. Caused the markets to plunge for no reason. Like what happened on may 6th of 2010. And if you listen and you listen well, maybe youll even get your doctorate in making money when everyone else is losing it, theres the degree i want. We may not be able to control the amount of pain the market throws our way, but we absolutely can control the the house of pain how we deal with it. We can control whether were prepared for the pain, whether were positioned so we dont lose more money than we should because weve taken some proper precautions. Later tonight im going to explain how the risks that come with owning stocks risks you need to watch out for in order to guard and expand your wealth. But right now, im talking to you about how you can deal with the risks that come from being a human being. From simply being human. There are many of them. And if youre not careful, you could end up doing more damage to your portfolio than any external force, any negative that takes down stocks. Basic investing mistakes can still lead to enormous investing losses. Im going to help you make your portfolio safe, maybe safe from yourself to ensure youre in a position to make money not endlessly lose it no matter how broken or rigged the game may seem to you. You know i dont think it is. But i do not quibble with those who think it is. Its too hard. In a tough market, you cant afford to make the easily avoided mistakes that regular investors find themselves making all the time. You dont want to make it any harder on yourself than it has to be. So with that in mind, here are my rules for agony proofing your portfolio. Immunizing yourself against huge losses. Lesson number one is to know what you own. Each one of your stocks requires time and homework. Youve got to be able to explain it to me if you see me on the street what it does and why you bought it. Lesson two, never buy stocks on margin. Meaning, do not borrow money from your broker to purchase stocks. These are not homes that you can live in if they go down. So its okay for you to take out a mortgage in that case but not in stocks. Its not home, its a piece of paper. And that piece of paper can go down in value threatening your nest egg. The practice is dangerous. The brokers want to make a lot of money on it. Buying on margin might seem like a great method, but in reality its a great way to potentially wipe yourself out. If you borrow, you cant take losses, cant sustain them, cant buy more as your stocks go lower. The margin calls come in and you once you get too deep in the red, the margin calls come in and you have to sell your whole position in order to cover what you owe. Its simply not safe. Nobody needs that level of risk. Nobody. I consider margin the equivalent of juicing in professional sports. Starts off great, ends very badly. Lesson number three, and this is also something i hit you over the head with all the time. But well, its just so crucial ive got to explain it again. Never use market orders. Now, when you pick up the phone and call your broker and tell him to buy or sell stock but dont name a price, thats a market order. You may not realize it, but what youre doing is giving that broker permission to fill your order at any old price the market gives you. Okay. So lets ask then, you go to the supermarket. Ill buy this head of lettuce at any price. Would you do that with a sweater at the mall . Ill take any price you give me. No, you would never do that and you shouldnt do it with much more expensive things that are called stocks either. Market orders are how people ended up selling Procter Gamble at 38 a share even though it was worth 30 more on thursday, may 6th of 2010 when the machines took over and we tumbled nearly 1,000 points. The flash crash. In the time it took me to walk out on the set and just sit there for street signs for a few minutes. With all the nasty stories of conflicts of interests, you may recognize your brokers interests arent aligned with yours. His top priority isnt necessarily to give you the best possible price on your trades. No, his job is often to generate commissions thats how hes often paid and thats not what we do on mad money. Thats why i dont have any conflicts here. I dont want your commission. Have i asked for any fees . No. And thats why you have to trust me on this. Instead of placing market orders, im urging you to use limit orders. Its the easiest thing in the world to do and doesnt cost a penny more, but could save you a small fortune. Especially on the days when the market goes haywire. All you have to do is tell your broker the highest price youre willing to pay and the lowest price if youre willing to accept if youre selling. Youll either get your price or if the stock isnt there at that price, the trade won happen. Hey, thats okay, youve got to protect yourself. Always use limit orders, not market orders. Never forget the lesson of that awful bogus down 1,000point day. First of all, it could happen again. And because it wasnt bogus for those who used market orders. Those trades really happened, they got hosed. I dont want you to follow in their footsteps. I need you to make money on those down days. Buy stocks at your price. Heres the bottom line, if you dont buy stocks on margin and you use limit orders rather than market orders where you say buy or sell, youll get hurt a lot less than others who dont know better. These are the first steps to making sure you survive a horrible market rather than getting panicked at the scale of your losses and then getting blown out. After the break, ill try to make you even more money. Shark week may be ending but chart week is just flexing its fins. Cramers diving in to find you stocks you can sink your teeth into and spotting the dangerous predators you need to avoid. Dont miss mad moneys chart week. It all starts monday. [ karen ] yes, i am you said in a focus group, they just mask the smell. Im going to ask you to find the smelliest item in your home. Here. Okay. [ laughs ] very, very strong dog odor. This is febreze free. It has no perfume. Wow. Now it smells clean, and it doesnt have an odor. Youre welcome. [ male announcer ] odor elimination without masking. The proof is in every bottle of febreze fabric refresher. Breathe happy. Donuts . Youre cute. [ door closes ] [ female announcer ] new special k protein cereal helps keep you fuller longer. Willpower. What will you gain when you lose . How ya doin . Mmm. [ birds chirping ] okay bye bye [ female announcer ] help satisfy your hunger longer with special k protein bars and shakes. Willpower. What will you gain when you lose . With special k protein bars and shakes. Easo why do you feel exso tired afterward . Instead of refueled and focused, youre foggy and sluggish. Its that 2 30 feeling again. So how do you get your clear, alert feeling back . Have a coffee. Then another . Do this instead. Take one 5hour energy. In minutes foggy and sluggish is gone. Hello clear and alert. 5hour energy. Take it after lunch. Be clear and alert for hours. When wall street hits turbulence, turn to a pilot with 30 years of market experience. Ladies and gentlemen, this is your captain speaking, please fasten your seat belts. Mad money with jim cramer, cnbc weeknights. Tonight were going back to school. Cramers stock market survival school, that is. Because when the markets in awful shape, broken, there are very real worries that the system just isnt working correctly. And we know what can happen even in outrageous bull markets. Maybe then its more important to know how to protect yourself. Every investor knows stocks sometimes go down. Theres nothing you can do about it. Its just the nature of the game. Dont be in the game if you think your stocks will never go down. There are times, though, they go down harder than others. At times when they go down relentlessly and the agonys unbearable. And the eck thatsy seems nowhere to be found. Thats why ive already gone over three important lessons tonight. Always know what you own, never buy on margin, never use market orders. Only limit orders to buy and sell stocks. These are basic rules, sure. But theyre critically important. Theyre absolutely essential to building and maintaining your wealth. Ive got four more lessons to help fight the pain. First, this is a corollary to the need to know what you own. You cannot own too many stocks. Knowing what you own takes time. It takes homework. I always like to look, the maximum one hour per week per stock. I understand, if you can give it a 15minute overview much less than that, you might as well be gambling. If you dont know what you own, then when your stocks go down, you have no idea what to do. Should you sell, cut your loss, buy more . The only way to feel confident in either decision is doing the work and understanding the companies in your portfolio. And that means its simply not safe for home gamers to own more than ten stocks at once. I know that many of you own far more than that. And look, i at various times own 20, 30, i can understand that. But as soon as you get above ten, you run the risk of actually running your own mutual fund. You shouldnt feel compelled to try to mirror the s p 500. Theres no good reason to own 30 stocks when ten highquality diversified names will do unless youre really fulltime home gamer. You cant handle 30 stocks, even 20. Its like having a parttime job in addition to the one you already have. But ten is just right. More than ten and i think youll start skimping on the homework and thats incredibly dangerous, especially at times when stocks seem to go down a lot. And periods when were in a bear market, its horrendous to have that many stocks. Next lesson, dont own too many lowdollar stocks. First of all, im the only guy on tv that recommends speculating and i accept low dollar single digits. They help by making market investing interesting. They allow you to keep your head in the game and others to be blown out. And while its still safe to have a speculative stock in a tough market, the emphasis there is on the singular, single speculative stock. Not more than that. Because as tempting as the single digit names can be, they shouldnt make up your whole portfolio. Theyre risky and a bad market risk is something you want less of, not more of. You want the colgates and the cloroxes. Nor ceo ever said, boy, oh, boy, i want my stock trading in the single digits. Hence why i told the gentleman earlier in the show Many Companies like to make their stocks seem more investable. It may seem like under 10 names have less downside than other stocks, but thats a trick of the eye. Single digit stocks can go to zero. And can wipe out your investment more than any others. Own more than one and many of you do, you may be gambling. Next lesson, and this one i beat over your head every wednesday on am i diversified, but its so critical to your investing success, im going to tell you again, you must be diversified. Its the only free lunch. It dont cost you nothing, but it saves you money. Thats a point i make in jim cramers real money which is still in paperback and was the handbook to when i used to run my hedge fund. No matter how many times i say it, though, i know many of you keep too many of your stocks in the same sector. We play am i diversified and i keep getting them. Why shouldnt you put all your money in one hot sector . Why do you have to spread it around so that no more of your portfolio is in the same sector when the hot sector could possibly make you so much money . Because the biggest risk out there is sector risk. Ask the people that doubled down on tech stocks in 2000 and then lost it all. When some big event happens, one that can really damage an entire sector. Only some of your stocks will go down if youreiversified. And maybe, just maybe, others will even go up. Same thing with the bank stocks in the 2008 2009. People owned ban, they were very hot, the housing stocks were all very hot. Finally when the market is getting killed day after day after day, its important to have enough dividendpaying stocks in your portfolio. Especially stocks i call ahys, accidentally high yields. Many people dont realize the importance of high dividends, they think theyre boring, for senior citizens, retirees only, but you know what . Going back to 1926, fully 40 of the return has come from reinvested dividends. You always have to reinvest them. When you forego dividends, youre giving up half the gains you can expect over time to make from stocks. And all the reasons that make dividend stocks worth owning becoming even more compelling in a down market. Thats when they really, really give you that cushion. Yes, theyre even a trampoline, because as their share prices go lower, their yields go higher, making them more attractive to other investors who dont own them yet and give you a better return for owning the darn things. You can buy the stocks on the way down. I cant emphasize enough how important that fact is. In a horrible market, there are so few stocks you can feel confident buying as they go lower. Stocks with big dividends, especially the accidentally high yielders, meaning stocks that used to have small yields but because their share prices have gone down, not because they cut the dividends, their yields have become notoriously big. And theyre one of the groups you can feel comfortable with. Accidental high yielders work better than any other kind of stock during the financial crisis. Remember, the dow went down to 6,500 and they still worked. And they still work whenever the market gives you these dividend bargains. And by the way, those big dividends for companies who can afford them, well, they are bargains. Mark in my home state of new jersey. Mark . Caller yes, booyah, jim. Booyah, mark. Caller do companies have to publish their x Dividend Dates . And how many days before that date do they have to publish it . Well, you can get it everythings on all the different finance sites have it. But, remember, i care more about the price you buy the stock at, no the the price if you dont have the dividend, youre getting it without you buy it without the dividend. Its cheaper without it. These are just all i dont say theyre slight of hands, but theyre not something you should worry about. What you should worry about is buying highquality stocks. And if you the dividend stock adviser, which is actually a fantastic newsletter that thestreet. Com has and explains all of this and is a great place to look. Lets go to louis in california. Caller good afternoon, dr. Cramer. Thank you. Whats up . Caller i have a question about diversification and risk. Okay. Caller i watched your show for several years and im newly retired. I own eight positions. Ive followed your advice and buy a good company in stages when it dips a little bit and sell a little when it shows a temporary top. Every time i sell, i allocate the profit and dividends received as return on my capital leaving the profit allocated to the remaining shares of the position. So now i have four stocks that are 60 to 100 owned with houses money. And thats a profitable booyah that is so perfect. You are just the total game playing. Can i help you . Caller yeah. Heres the question. The other four stocks at risk that i have, i own are diversified and balanced and most have some profit. But some of them overlap the other stocks that are owned with houses money. So which is more important . Diversification and balance of the whole portfolio or diversification and balance of those shares still owned by my capital . Well, you know what if you know what im going to do. This is the first time ive ever had this question. And what im going to say is if youre playing with the houses money, im going to bless some lack of diversification. Youre not going to give it back and diversification is about not giving it back, but you cant because youve already won. Josh in louisiana, josh . Caller booyah, jim. Whats up . Caller hey, i was just wondering how you use the futures market to judge how the market would do throughout the day. I hate it. I wont use it. I think people who use it are lazy. They are just simply looking at how europe was or asia was in making the termination. Forget about it. We trade stocks, not futures. Thats quite simple. Youve got more tools for your survival now. We have we dont own too many stocks, right . We know we should use limit the number of speculative stocks because they tend to trade together. We know that diversification is key. I call it the only free lunch and we know to focus on highyielders particularly in times of trouble to reduce your risk. Stay with cramer. Sitting on the sidelines because of all the uncertainty in the market . Thanks for turning my portfolio from mean to green. Thats what i want to hear. With over 25 years of experience in bull and bear markets, let coach cramer show you how to play to win. Thank you for you and your staff for keeping us in the game. Mad money weeknights on cnbc. Jim cramer, youre one of my heroes. I look forward to your show every weeknight. Thank you so much for helping beginning investors like me. When you talk about the market, i just believe that youre spot on. Oh, i love it. Thank you so much. Every night we watch you. I have learned and earned. All night ive been teaching you how to handle the inevitable corrections, part of cramers stock market survival school. Ive gone over many of the things you can do to minimize your downside, protect your portfolio against action thats downright nasty. The way it was at the time of the fiscal cliff or even the original sequester scares. Hey, i want to go a step further. In order to deal with increased risk from a market thats gone up a great deal and many consider to be frothy, you need to understand what the risks are. You need to know what might cause the next selloff. You need to be familiar with forces that are causing your stocks to get hammered that you may not even know about. In other words, when the market corrects, and you know its going to have to, you need to know why. You need to know whats really hurting your stocks. Now we like to think when a stock goes up or down because its whats happening with the Underlying Company. Companies that do well get rewarded with a higher stock price, companies that do poorly get punished with a lower stock price. Thats how things used to work. In a vicious decline, the connection between a company and its stock can become gossamer thin and it can be severed. Youll see the stocks of Good Companies get taken down right with the bad ones, even when they report good news. Thats the kind of action that can drive investors completely insane. It drives you batty. If a stock cant go up and its reporting a blowout quarter, wow, then youre probably thinking, for heavens sake, you can never make anything go higher. Is there any point to distinguishing the good from the bad when the market is selling everything . Why even bother to do the homework that cramer says you should do . Well, yes, there is a reason. Because eventually were going to come out of the selloff and the fundamentals will start mattering again. It can take a while for that to happen. In the interim, its crucial to make sense of why this is happening you might be able to make sense out of the chaos. Youll see stocks trading in lock step with the good, the bad and truly ugly all going lower. Some of that is absolute pure panic. But there are also structural reasons why this happens and you need to know them. See hedge funds have turned stocks into an asset class closer to baskets of corn or lumber. Theyve and this is a verb thats new, commoditized equities, thats the origin of much of this lock step action where they all trade together. How have they done this . Well, because for many of the big institution Money Managers, individual stocks are too small to handle the amounts of money theyre dealing with. So they turn to the s p 500 or the big etfs that allow huge bets to be made in seconds. Now, in a difficult market, rising tide of optimism takes over, okay, these hedge funds im sorry, pessimism. These hedge funds will just sell the futures. As soon as they get pessimistic, theyll sell the futures, bang them down, and sell the etfs and that brings down everything in the s p. Theres also an element of grouping. Here most managers, they tend to act like herd animals. Think wildabeest on the discover channel. Causing them to blow out of sectors all at the same time. Wreaking havoc on individual stocks. We saw it in the bad old days. And this gives an issue you must be aware of, the ideas of stocks as a paper risk. All the things that could cause the stock to go down that have nothing, absolutely nothing to do with the Underlying Company and that mystifies you. And everything to do with the asset of the stock is traded. These are risks with nothing to do with earnings or fundament do with earnings or fundament of the company at all, especially in a pessimistic infused bear market or one of those incredibly quick declines that we always must be on the lookout. What kind of risks am i talking about . Lets say were in a prolonged down market. Well, then you have to worry about the ability of short sellers to create fear and panic because it absolutely trumps the ability of buyers to instigate greed. That means the shorts can push down stocks relentlessly with endless selling firepower. Now, this is new. It didnt always used to be like this, certainly not when i got in the business. We used to have a securities and Exchange Commission that stopped this thing, one that reined in the shorts and helped you, helped the home gamer, helped the little guy. And then the bush era came along, the s. E. C. , well, it lessened its commitment to the individual and increased the commitment to laissezfaire ideology over real. They appealed the uptick rule. Arcane rule. This was a regulation created in the aftermath of the great crash of 29 and 32 in order of averting another disaster of the same scale which curbed the ability of shortsellers to bang down stocks endlessly. Under the uptick rule, they had to be willing for someone to pay more and uptick a stock before they could sell a stock short. And for 70odd years it worked, then the s. E. C. Got rid of the oldfashioned uptick rule and the shorts were able to run wild. Do you think its a coincidence we had the Great Recession of stocks . The shorts were able to continue run wild whenever we got a particularly nasty selloff. That kind of relentless, unstoppable short selling was instrumental in the fall of lehman brothers. One day people will write a book about this. Weve also seen the same thing with bonds of troubled European Countries ever since the problems with greece, portugal, spain and ireland began, or we see it in stocks in our market because of deficit funding or debt ceiling issues or, of course, the sequester. Sure, when things are good, we forget about the pernicious impact. Impact of aggressive shortsellers without limits, but they are bad, we feel them. Shortsellers arent the only risk. To make matters worse, we have the proliferation of eps of mass destruction. Double, tripled levered, Exchange Traded funds that give you two or three times the shortselling bang for your buck. These are etfs that exist for day traders. Thats not the point of our stork market, is it . They dont work for longterm or medium term investors because they rebalance every day. Take the skf, the ultra short financials pro shares, an etf that lets investors short the stocks with 100 leverage. You think this etf wouldve made people money during the financial crisis, right . All the bank stocks got pulverized. Many got wiped out. Uldnt this be the instrument of choice . Wrong the skf actually lost you money if you owned it through 2008. Well, one of the worst years in bank stock history and thats what happened . How is this possible . Designed only to track its because these superleveraged etfs are designed only to track daytoday changes. At the end of every day, they rebalance, andhat means theyre more of a play on volatility than any of the sectors they purportedly allow you to short or to own. You to short or own. If they have no value for longterm investors, whats the point of having them . Frankly, its hard for me to avoid the conclusion that their main function is to allow the shorts to get around the margin rules and manipulate the market with massive selling firepower at once. This gets at a larger power with an s. E. C. That no longer seems interested in protecting you, protecting regular investors. Ill deal with that after the break, though. Heres the bottom line, stocks are not cash, they dont act like cash, they cant be viewed as cash. Remember, stocks go down for many reasons that have nothing to do with the companies or profits, including hedge funds going wild and the massive selling firepower of the leveraged etfs of mass destruction. Stay with cramer shark week may be ending but chart week is just flexing its fins. Cramers diving in to find you stocks you can sink your teeth into and spotting the dangerous predators you need to avoid. Dont miss mad moneys chart week. It all starts monday. I make dirt. Im not big enough or Strong Enough for this. There should be some way to make it easier. [ doorbell rings ] [ morty ] heres a box, babe. Open it up. Oh my goodness what is a wetjet . Some kind of a mopping device. Theres a lot of dirt on here. Morty, look at how easy it is. Its almost like dancing. [ both humming ] this is called the swiffer dance. They say money never sleeps. Neither does jim cramer. Follow jimcramer on twitter. All night ive been teaching you how to survive rough corrections to a bull market. Ive told you about the mistakes you need to avoid making yourself. Warned you about the powerful forces that big Money Managers use to push stocks around. Like the futures and the ultra etfs of mass destruction. Things that can cause the performance of stocks to become disconnected of the performance of the Underlying Companies much more commoditized. But theres one more risk you need to know about if youre going to invest in a dangerous chopping market or one that suddenly turns like that. Its that the life guard is off duty. And when you go swimming in this market, you better remember theres nobody out there making sure the water is safe. The s. E. C. Which should be working to level the Playing Field in order to protect the little guy, they dont think its their job anymore. At least thats my opinion. The regulators seem to favor, for instance, highfrequency traders, hft over the ordinary home gamer like you. These highfrequence guys now make about 80 of all trades. There you go, huh. This is the market youre really dealing with. We need we need an s. E. C. That protects the unsophisticated from these rapacious capitalists. Instead weve got one captured by the exchanges and abets the most sophisticated traders, i think, at the expense of you. This is no longer the s. E. C. Of Arthur Leavitt who chaired the commission from 93 to 2001. Leavitt was one of the greatest s. E. C. Chairman ever because his mantra was to level the Playing Field, make the market safe for the individual investor. Leavitt favored regular Retail Investors over home gamers like you over the big institutions, particularly the hedge funds because he knew the big boys didnt need protection. They got all kinds of money. But under the reckless laissezfaire anything goes bush s. E. C. , that all changed. I think the Obama Administration has hardly done anything to roll back the damage. Making the market less legitimate and less safe for you. All the changes that made the market faster, allowed the machines to ping each other for quick, tiny gains, allowing many managers to evade the margin rules bring double or triple etfs selling power or buying power through appeal of the original uptick rule, which protected us from endless short selling. The s. E. C. Either approved or enacted all of these things that made the market more dangerous and more difficult when things get bad and will do so again when we get that kind of quick, sharp decline. So if you expect the s. E. C. To have your back, think again. If you think the exchanges have any interest in maintaining legitimacy of our stock markets, not so much. Youve got to understand the exchanges arent on your side because their whole bias is to allow the big institutional hedge funds to make fast trades that generate maybe a fraction of penny in the profits. In the old days they were nonprofit organizations that could police themselves. Now theyre for Profit Public Companies and the goal is to make money. Nothing wrong with that. But were living in a different investing world than we were a decade ago and the s. E. C. Doesnt seem to notice. Until we get someone on the s. E. C. And lets look at this through the prism of your i. R. A. Or 401 k rather than the prism of giving market manipulators the right to have double or triple etfs without regard of how good or bad it can do. Then you should not be surprised by any kind of outrage. This also means that you have to protect yourself. Yourself from the madoffs of the world, for instance, who offered toogoodtobetrue performance 7 the s. E. C. , we know now, isnt equipped to find or spot these people. Or maybe its in bed with the wrong people. Maybe its examining the minor players instead of the major ones. If you give your money to a money manager, demand reports exactly from where the manager keeps his master account. Be sure you can deal directly with the Money Managers account to get results, he wont like that, i dont care. Dont give money to a money manager where he puts it to work in something it doesnt have and easily accessible price. You never want to be put in that mortgage back junk that burned so many investors. If you cant find the price on yahoo or cnbc. Com, i want you to take your money away from these people. Listen to this, i know. Heres the bottom line, flash crash, financial innovation, battlefield innovation circa world war i where it vastly outpaced the ability to deal with the newfound firepower. Stocks that trade like commodities. Moves that make no sense whatsoever. These are now the normal, because the obama s. E. C. , like the bush s. E. C. , isnt watching the store. Hey, we dont have to like it, we better get used to it. Stay with cramer. Ive said it before. I have the smartest viewers around. So lets hear from you with some of the tweets youve been sending jimcramer. I got that cool avatar. Our first tweet is from allenpal6. He writes, why limit orders only . Got to be a good story to go with it. Yes, lets say you had a sell order in during the flash crash. And we know no flash crashes are no locker going to be isolated events. Well, if you had a market order and its entirely possible Procter Gamble, went to 40, entirely possible you sold it at 40 with a market order. They can give you whatever price you want and it bounces right back to 60. But if you put a limit order, youre out sold at 59, you can always buy it back at 30. Its about flash crashes. Thats why. Its about wild markets and taming them with limit orders. Our next tweet is fantastic. fittedhatday writes, its true, jimcramer called me out for yawning when georgiatech hadnt yawned yet. Thats true. I cant stand yawning or sighing. I used to make people leave my hedge fund if i caught them yawning. I said, just go home, take a nap. But i also approve of our staffs voracious hunting through the archives, nobody does it better. No more yawning, man. I used to fire people at my hedge fund when they yawned. I made them go walk around the building and if they come back again and yawn again, theyre fired. Yeah, ive become sweeter and kinder and gentler, and now when someone yawns i say, listen, go get me a soda or diet coke or something. Im no longer trying to fire people. But i think i will. Anyway. Heres another im not kidding. That means sighing is even worse. Heres another tweet from zander318. Who asks me, jim, does the volatility index belong in my portfolio . Its about owning companies, shares of companies, dont complicate it with this risk on, risk off vix stuff. Own stocks for heaven sake. This next tweet comes from garc108 who writes, let me get this straight, on wall street, roll up the sleeves. When cooking and cleaning, leave them down . Well, yeah, you know what, i like to dress up. That happened to be ellen haleys day off. It was our proprietor, it was mothers day. Someone has to take up the slack on mothers day. It might as well be cramer. My eggs were good it was a good day. Lets go to the next tweet from sjeply who wrote the following. Ive got a year left of college. What would you recommend to do during the senior year, aside from hitting the books hard . This is easy. Have the gosh darn time of your life. Ive got news for you, every day from then on is work. A lot of kids think college is work. Thats the best time of your life. Everyone looks back as the best time of their life. Dont waste it working. Heres another tweet, this one kotching from come from krausaz. Watch you every night, great show. Now, if you can tell me that the analysts watch me at the galapagos, then i know i got reach. Lets keep them coming. Oh, no, lets stop because were out of time. You know what, on the yawning guy, i got your picture. I know where you live. Im coming for you. Stay with cramer. Cramer, you are super, you are awesome. Im a firsttime investor. Thank you for inspiring me to get in the game. This show is the best. Im so glad youre on tv. I want you to know that you have transformed me. Thank you, cramer. So tired afte . Instead of refueled and focused, youre foggy and sluggish. Its that 2 30 feeling again. So how do you get your clear, alert feeling back . Have a coffee. Then another . Do this instead. Take one 5hour energy. In minutes foggy and sluggish is gone. Hello clear and alert. 5hour energy. Take it after lunch. Be clear and alert for hours. My turn daddy, my turn hold it steady now. I know daddy. [ dad ] oh boy, fasten your seatbelts everybody. [ mixer whirring ] bounty selectasize. Its the smaller powerful sheet, that acts like a big sheet. Look one selectasize sheet of bounty is 50 more absorbent than a full size sheet of the leading ordinary brand. [ humming ] [ dad ] use less with the small but powerful picker upper. Bounty selectasize. And try bounty napkins. Shark week may be ending, but chart week is just flexing its fins. Cramers diving in to find you stocks you can sink your teeth into. And spotting the dangerous predators you need to avoid. Dont miss mad moneys chart week. It all starts monday. I like to say theres always a bull market somewhere and i promise to try to find it just for you right here on mad money. Im jim cramer. See you next time. Were showing you some of tonight on 1st look, were showing you some of the best road trip destinations from around the country. Tonight on 1st look, were showing you some of the best road trip destinations from around the country. Starting in san francisco, where i have a date with some fresh bay oysters. Lets check that out, and im going to get on the road. 49 miles north of san francisco, this bay is home to Hog Island Oyster company, a scenic stopping point for tourists and locals alike. If youre looking for some of the best oysters in the world, this is the place to come. I love coming to hog island because i know i can get the best oysters. Whats not to like about being on the coast and being able to enjoy oysters . Its private. Youre in the cove. The waves crashing. Its just good to relax. Im terry sawyer, and i am one of the coowners of Hog Island Oyster company. We work right here on our land base. This is our picnic area here in marshall, california. And just like a road trip, location is key when growing delicious oysters. With extreme tides and brackish waters from the Pacific Ocean pouring into the bay, this setting creates an oysters paradise. How you doing . Hi, ali. Welcome. Thank you. Im so excited to start my road trip here because i hear this is the best place to get oysters around. Why is it a good road trip spot . You see a working farm, oysters right out of the water and you get to enjoy them like within an hour. Youre definite getting the freshest oysters around when you come here. Absolutely. I cant wait to check it out, so i say we go do that. Lets go. And while a delicious meal can be had here at Hog Island Oyster company, there is a lot of work to be done before the meal is served. Whats going on here is this is a tumbling system that were using to presort the oysters. The ones that dont meet our standards are going to go back into the water and get another chance. I like that you give them a second chance. Well give those a second chance. These, theyre going to be coming to our plate. The final sort is going to be based on whats going on on this table. The handling and how we process this is really what helps set us apart. What are we looking for . Ones that are a little larger, ones that are going to be a return or cluster. Then the one thats going down on the table down there is what were hoping to get the most of, and in this case its going to be what we call our extra small for creating broth. These are our pacific oysters right here. This is what were going to enjoy today. This is a wet storage system thats going to bring them back into a condition after theyve been handled that is as if it was just harvested. Now theyre relaxing. This is like a spa. I like the oyster spa before they get eaten, ha, ha, ha, ha. Wo