Rule No. 21: Be a TV Critic

Editor's note: Jim Cramer's new book, Real Money: Sane Investing in an Insane World, is available in selected bookstores now. As a special bonus to RealMoney readers, we will be running Cramer's "Twenty-Five Rules of Investing." For more about the new book and to order it, click here. Today, we present Cramer's twenty-first rule of investing. Read more about his rules:

1. Pigs Get Slaughtered
2. It's OK to Pay the Taxes
3. Don't Buy All at Once
4. Buy Damaged Stocks
5. Diversify to Control Risk
6. Do Your Homework
7. Don't Panic
8. Buy Best-of-Breed
9. Defend Some Stocks
10. Don't Bet on Bad Stocks
11. Don't Own Too Many Names
12. Cash Is for Winners
13. No Woulda, Shoulda, Couldas
14. Expect Corrections
15. Watch Bonds
16. Don't Subsidize Losers
17. Check Hope at the Door
18. Be Flexible
19. Quit When Execs Do
20. Patience Is a Virtue

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Do you know how financial television really works?

I'll tell you. At times, it can just be a gigantic booking machine. That's right, people are scrambling to get money managers on who can talk, almost regardless of how good they are. And lots of times, executives say whatever they want on air, knowing that they can get away with it.

I accept this as a given. I accept that what I hear on television is probably right, but no more than that. That's the world in which we live. That's the reason I follow this tenet:

Just because someone says it on TV doesn't make it so.

Not long ago, a money manager came on television and knocked down SiriusSIRI by saying some negative things about it, some of which were true. I accepted the fact that he was short it and that he probably shorted the stock right before he went on and that probably what he said wasn't right. Did you think he was right?

I think you are naive if you simply believe what you hear. The vetting process to get on television simply isn't all that rigorous. When a manager says he likes EMCEMC or Sun MicrosystemsSUNW, do you ask yourself where he bought it? Do you think he might be selling it?

When someone comes on and says that ElanELN is a buy, do you think, "He's really stuck in that pig"?

If you answered yes to these inquiries, then you are armed for the daily chatter.

	1.	Pigs Get Slaughtered		2.	It's OK to Pay the Taxes
	3.	Don't Buy All at Once		4.	Buy Damaged Stocks
	5.	Diversify to Control Risk		6.	Do Your Homework
	7.	Don't Panic		8.	Buy Best-of-Breed
	9.	Defend Some Stocks		10.	Don't Bet on Bad Stocks
	11.	Own Fewer Names		12.	Cash Is for Winners
	13.	No Regrets		14.	Expect Corrections
	15.	Know Bonds		16.	Don't Subsidize Losers
	17.	No Room for Hope		18.	Be Flexible
	19.	Quit When Execs Do		20.	Patience Is a Virtue
	21.	Be a TV Critic
Check back for more of Cramer's Rules