Sneak Preview: Be Politically Savvy

Editor's note: This is a special excerpt from Jim Cramer's book, Jim Cramer's Mad Money: Watch TV, Get Rich. To order your copy and read all the rules, click here.

5. Pay attention to politics, because the Street is too focused on money. There are a lot of companies that make their money feeding off the U.S. government. There are even more companies that could potentially strike it rich because Congress decides to send a little bit of pork their way. The analysts on Wall Street, and most of the money managers, tend not to focus on any of this stuff. They're too focused on how companies make their money and not focused enough on what could happen in Washington to increase profits.

I think differently. I believe we have a government of, by, and for the corporations that will not rest until it finds more ways to subsidize big business. Maybe you don't like that politically, but I don't care about politics. I care about making you rich, and that means paying attention to government spending. This is another area in which you can get ahead of the analysts and ahead of all the big institutional investors.

Getting in ahead of the hedge funds and the mutual funds means making boatloads of money, because when these guys catch a whiff of something they like, they send the stocks up into the stratosphere.

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I learned this by playing around with ethanol stocks. I recommended Archer Daniels Midland(ADM Quote), the largest processor of ethanol in the country, on Aug. 22, 2005, when the stock was at $21.90. This was well before ethanol became a big fad in the press and on Wall Street.