Editor's note: This is a special sneak preview of Jim Cramer's just-released book, Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer). Look for more sneak previews every day, and get your free copy with your annual subscription to Action Alerts Plus; click here for details. Catch Cramer in person at his last book signing event: Saturday, Jan. 12, at 1 p.m. in Westbury, Long Island's Costco.
2. Don't quit when you get back to even. My ActionAlertsPlus.com Alerts are littered with missives about how I am "battling" individual stocks as they go down to get a better cost basis and then quitting just when I get ahead.
In 2002, I decided that ABB (ABB - commentary - Cramer's Take), a Swiss engineering company that was one of the few companies on earth that maintained the ability to build nuclear power plants during the dry spell of construction, was making a comeback. It had been damaged by some serious exposure to asbestos lawsuits. I first bought the stock at $13, but every time an asbestos lawsuit hit the tape, even if it was the good news of a settlement, the stock got hammered back to $11. I was able, after a considerable amount of buying over many months' time, to get my basis -- that is, what the entire position cost me -- from $13 to $12 a share.
It was a classic siege and I was conscious of the heroic effort that it took to buy little increments each time it ticked at $11 and change. After five months, the stock finally got back to where I initially bought it. I declared victory, saying I had gotten back to even and then some! I was so proud and relieved that I had outlasted the stock. The fact that I had actually made a dollar despite the bad first buy was icing on the cake. I had won. I rang the register.
Investing Around the Wii in 800 Words 11/30/2007 4:59 PM EST How to find one, how to profit from the buzz, and hot games for the holiday season.
From Jim Cramer's Stay Mad for Life by James J. Cramer and Cliff Mason. Copyright 2007 by Jim Cramer. Reprinted by permission of Simon & Schuster, Inc.At the time of publication, Cramer had no positions in any of the stocks mentioned in this column.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC.
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