Cramer said the mistake was giving up when everyone else did, a move that almost always yields a better time to sell later. He said that Darden paid a bountiful dividend, paying him to wait, which made his rush call to sell at the bottom a big mistake. There's always a better time to sell than when everyone else is selling, he concluded.
Don't Fall in Love
Cramer's next lesson for investors was to never fall in love with a stock, as he did with Chipotle Mexican Grill (CMG.).
Cramer said with two vegetarian kids who already turned him on to the likes of Apple (AAPL), a stock he owns for his charitable trust, Action Alerts PLUS, and Panera Bread (PNRA), a stock that rose from $40 to $160, it was easy for him to jump on the Chipotle bandwagon.
Chipotle had been a restaurant that only barely got dinged during the Great Recession. The company was in the right place at the right time, promoting healthy, organic foods. Unlike just about every other restaurant chain that was getting slammed by international woes, Chipotle remained a great U.S.-only regional to national growth story.That's why Cramer suspended his own rules and recommended the stock even when it began trading at multiples more than twice its growth rate. Chipotle, he thought, could never be stopped. That was, of course, until the day the stock tumbled more than 100 points. Cramer said he knew the stock was too dicey above his "two times growth rate" rule, but he let his enthusiasm get in the way. Ironically, he said, using the same analysis allowed him to call the bottom in Chipotle at $280 a share, or one time its growth rate, a fact that only added salt to his wounds. In a similar situation, Cramer said he overstayed his welcome in Deckers Outdoor (DECK), makers of Uggs boots, for almost exactly the same reason.
Management MattersNext in Cramer's list of sins from this year: ignoring his rule that management matters. He said sometimes he's too harsh on CEOs, while other times not harsh enough. This year, he had one example of both.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV