Cramer's 'Mad Money' Recap: Easy Street

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'Let's Try and Make Some Money!'

"I am here to help you make money," Jim Cramer told viewers of his "Mad Money" TV show Monday night.

After his appearance Sunday on CBS' 60 Minutes, Cramer went through the basics of investing for those new to "Mad Money."

Stocks have beaten all other asset classes over any 20-year time period, but you have to learn how to stay in the game, Cramer said.

First, "don't be intimidated," said Cramer. "It takes some work. It's not easy." But you can do it.

To get started, you'll need a brokerage account. Choose one with low commissions, said Cramer. Next, start looking for at least five stocks to own. Cramer believes that five is the minimum to satisfy the diversified requirement.

Start by identifying five sectors that seem promising, and then choose one stock from each sector. You can get ideas by reading the newspaper and staying abreast of current events, he said.

Once you've chosen a sector, start looking for individual stocks by noting the stocks' price to earnings (P/E) ratios relative to their peers. The P/E ratio is the true price of a stock, said Cramer.

For example, if you have been following developments at the Federal Reserve, you know the Fed has been raising interest rates. But, Cramer believes that the Fed is almost done raising rates. "That's good for banks," he said.

Cramer on Monday purchased shares of Wells Fargo (WFC - Cramer's Take - Stockpickr) for his ActionAlertsPLUS charitable trust.