Cramer's 'Mad Money' Recap for July 14

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"It's time to unlearn a common myth about investing," Jim Cramer told viewers of his "Mad Money" TV show Monday. "The best way to invest is not to buy a bunch of stocks and just sit on them."

Cramer said the arguments that frequent trading result in high commissions are just false. "Commissions have been dirt cheap for years," he explained. He also said that paying taxes on gains is a good thing, much better than posting a loss. Instead of buy and hold, he said investors should buy and do the homework.

Cramer told viewers that they should spend at least an hour a week on a stock checking on the fundamentals of a company's underlying business. When it's time to sell, then sell and move on. "Sooner or later you always have to sell," said Cramer.

Cramer took aim at a story on page B1 of the Wall Street Journal last Saturday that criticized "TV pundits who shriek out trading advice." The article, which he felt took aim at him, advocated a strategy by famed investor Warren Buffett, which said to buy more anytime a stock declines 50% or more. Cramer called that strategy wrong.

If you had adopted that strategy and bought stocks such as Wachovia (WB Quote), Fannie Mae (FNM Quote), Freddie Mac (FRE Quote), General Motors (GM Quote), as well as the former Enron, you would have seen them plunging beyond 50%, many towards zero.

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