Cramer's 'Mad Money' Recap: Taking Control of Your Portfolio

Showing Discipline

When it comes to investing, it's discipline, not conviction, that leads to success, said Cramer. "We screw up when we just go with our convictions," he said, adding that's why we need discipline.

Discipline comes from rules, said Cramer. Rules are what help us make the tough calls, and one rule that Cramer said he lives by is "never turn an investment into a trade."

Cramer said many investors make the mistake of selling a stock they believe in just for a quick gain. But this is wrong: "Don't sell a stock you believe in for the long-term just because it's gone up a lot off of some catalyst," he said.

If you know something is going to work for the long-term, you have to be willing to sacrifice the quick gains and hang in there, said Cramer. Don't just take the five-point win when you know there are 50 points to be had.

Single-Digit Speculating

Another rule investors need to live by comes from Cramer's book "Stay Mad For Life" which makes the point that "low-dollar speculative stocks can wipe you out!" In today's market, this rule could not be more true, he says.

Cramer said while he's not against speculating on single-digit stocks, doing so without doing your homework is a recipe for disaster. Anyone who invested in Citigroup (C Quote) at $10 a share, only to watch it sink to a penny stock, can attest to this rule, said Cramer.