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
readers, we will be running Cramer's "Twenty-Five Rules of Investing." For more about the new book and to order it,
. Today, we present Cramer's twentieth rule of investing. Read more about his rules:
Pigs Get Slaughtered
It's OK to Pay the Taxes
Don't Buy All at Once
Buy Damaged Stocks
Diversify to Control Risk
Do Your Homework
Defend Some Stocks
Don't Bet on Bad Stocks
Don't Own Too Many Names
Cash Is for Winners
No Woulda, Shoulda, Couldas
Don't Subsidize Losers
Check Hope at the Door
Quit When Execs Do
Patience is a virtue -- giving up on value is a sin.
I see so many people throwing in the towel on companies that have real assets and real worth just because they aren't working now, and it angers me. The other day I interviewed the CEO of
(SUP - Get Report)
, a wheelmaker for auto companies. Its stock is at a 52-week low. It has a big short position. It's lumped in with companies like
And I ask myself, "Why sell that one? It's already down so much, it has a clean balance sheet, it can make acquisitions, buy back shares, do so many things." But people don't want to wait until the cycle turns to get the profit that most certainly will come to those who wait for Superior. That's because it is
. It's cheap because it sells at book value; it's good because it has plenty of business.
Or take the situation I see developing in banks like
(JPM - Get Report)
. If the
doesn't tighten forever -- which it won't -- at a certain point, the value in these banks will be realized. Great brands, great branches.
But no one cares.
At any given moment, I like to have a portfolio of what's working now and what will work in the future. I think that after seven tightenings, you have to start thinking that the Fed will have an impact and when it does, the Fed will be through. When the Fed is through, you are going to want to own the financials. I think they are a lot easier to own now than
It takes patience. Most don't have it. If you don't, frankly, I think you should let someone who has patience run your money. You don't deserve to.
And by the way, stocks like
(EMC - Get Report)
(CSCO - Get Report)
(SUNW - Get Report)
don't qualify. They are expensive, not cheap. They don't represent value ... at these prices.