Cramer's 'Mad Money' Recap: Tricks for Buying and Selling

Cramer's final investing trick he wants to impart is the importance of realizing that "sooner or later, all hot stocks implode."

By "hot" stocks, Cramer means "small" stocks, or stocks with a low market-cap and very little research coverage, that have been going up for a long time.

"Small, hot" stocks are definitely worth owning, but people must know when to sell them, Cramer said. That moment usually comes when there are too many analysts jumping on the bandwagon.

Cramer would use four analysts as a good rule of thumb to let people know when to get out.

"Hot stocks get tapped out when there's nobody left to be attracted to them -- when all the people who are going to buy have already bought," Cramer said. A great example of this in recent years is Hansen Natural (HANS Quote), "which was the hottest stock in 2004, the hottest stock in 2005, and the hottest stock for the first half of 2006."

The stock, he said, peaked in July of 2006, partly because the company did a five-for-one split, which encouraged people who'd been in Hansen for a long time to take something off the table.

Another reason Cramer believed it would peak is because Hansen had just picked up its fourth analyst on May 10, 2006, when Goldman Sachs started covering the stock.

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