Cramer's 'Mad Money Recap: School of Stock

Heed the Conference Call

There's a lot more homework involved in judging a company than just looking at debt, said Cramer. He recommends budgeting an hour a week per stock for homework.

By homework, Cramer means reading the company's SEC filings, available at www.sec.gov. Pay special attention to the quarterly and annual reports, he said.

Cramer also recommends reading analysts' reports. Most are also available via the Internet. Although sometimes you have to pay for the reports, most of the time, it's worth it, said Cramer.

Finally, the "holy grail" of homework, said Cramer, is the quarterly earnings conference call held in conjunction with the company's release of its quarterly earnings report. Conference calls can be listened to via the Web, and transcripts are often available after the call.

Regulation FD has gone a long way toward leveling the playing field for individual investors, said Cramer. Whereas the best information used to only be available to the wealthiest and the most well-connected investors, Regulation FD dictates that all investors should have equal and simultaneous access to information.

Thus, it's possible, if you have the time and the inclination, said Cramer, to do work that is equal to or better than that of Wall Street analysts.

However, if you don't have the time and inclination, you should have a professional do that work for you.

Tons of Metrics

In order to tell how a company is doing, you need to know how fast a company is growing, which is measured by revenue growth (sometimes called sales growth), and how profitable a company is, which is measured by earnings, said Cramer.