Scott Rutt
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After today's historic market decline in which the Dow Jones Industrial Average fell 777 points, Jim Cramer showed the viewers of his "Mad Money" TV show Monday what he called the only sure-fire way to make money. He sat on his hands and simply told his viewers to wait. Cramer called today's crash "the real deal," the one he's been predicting since July of last year and the one he's been preparing for when he advised viewers to trim their portfolios, raise cash, buy gold and stick to defensive and dividend paying stocks. The only way to potentially buy any stock in this market, said Cramer, is to follow this simple flow chart. Ask yourself, he said, does the company need to borrow money in order to fund operations? If yes, then the company just cannot be owned. If the answer is no, Cramer said viewers should ask whether the company sells something that only works in a good economy. Again, if yes, then it cannot be owned. If the answer to both questions is no, then Cramer said a third question needed to be asked: Has the company's stock fallen at least 5% to 8% today? If the answer is yes, only then can you consider investing in it. Cramer said today is only the beginning of the decline if a bailout plan is not passed. "Don't put your money at risk," he said, "it's time to protect your nest egg." He told investors to keep their money in FDIC insured accounts and sit on their hands as the crisis unfolds and until stocks reach a point where it's safe to invest again.
Cramer: The Superbanks Don't Impress Me |
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