Mad Money w/ Jim Cramer 12/26/24
Mad Money w/ Jim Cramer
Deep Dive
What is the most useless thing an investor can do according to Jim Cramer?
The most useless thing an investor can do is to worry about what everyone else is worrying about, as it is likely already priced into the market.
Why does Jim Cramer believe the efficient market hypothesis is flawed?
Jim Cramer argues that markets are often irrational, ignore important information, and misvalue stocks daily, which creates opportunities for individual investors to profit from these inefficiencies.
What is Jim Cramer's advice for managing a portfolio of individual stocks?
Cramer advises buying stocks gradually on the way down and selling them gradually on the way up, emphasizing the importance of ongoing research and discipline rather than trying to time the market perfectly.
What is the 'kind of sort of efficient markets corollary' according to Jim Cramer?
Cramer's corollary states that when there is a widely held consensus view about something, positive or negative, it is likely already priced into the stock market, so investors should not base decisions solely on such consensus.
What is Jim Cramer's opinion on index funds?
Cramer believes index funds are the best way for most people to invest in the market, especially for retirement accounts, as they provide safe equity exposure with low costs.
What is Jim Cramer's strategy for trimming stock positions?
Cramer recommends trimming stock positions after a 20% gain, selling 5-10% of the position to lock in profits while allowing the rest to run.
What is the danger of following the herd in stock investing according to Jim Cramer?
Following the herd can lead to lower returns and higher risk, as the easy money has often already been made by the time a consensus is reached.
What is Jim Cramer's view on the IPO cycle?
Cramer warns that IPO cycles often start with euphoria but end with a supply glut that can weigh on the market, especially when low-quality companies flood the market.
What is Jim Cramer's advice for identifying the best companies within an industry?
Cramer suggests looking for companies with the highest gross margins, as they often have the biggest competitive moat and can generate the most profits.
What is the difference between an S&P 500 index fund and a total stock market index fund according to Jim Cramer?
An S&P 500 index fund focuses on large-cap stocks, while a total stock market index fund includes mid-cap and small-cap stocks, potentially offering better long-term diversification and performance.
- Worrying about what everyone else worries about is useless.
- The efficient market hypothesis suggests stock prices reflect all available information.
- Focus on what others are not paying attention to.
Shownotes Transcript