This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Jim Cramer's 'Mad Money' Recap: A Pivotal Year for Markets

Not since 2000 have the markets had all five of these signs pulling in its favor, Cramer concluded -- not until now.

Lessons Learned

There are two lessons every investor must learn, Cramer told viewers: Don't buy too soon and don't wait too long to sell. Waiting too long to sell is perhaps the worse of the two, he said, explaining the two "false floors" that investors often think will save their falling stocks.

Big buybacks often lull investors into a false sense of security, said Cramer, but most buybacks won't protect a stock from a big market downturn nor falling earnings. The problem with many buyback programs is that any shares purchased are offset by the issuing of more options for executives. Rarely does a company make well-informed purchases, Cramer continued, with many companies overpaying for their own shares at the highs, leaving little to no money to spend at the lows.

The second false floor is the notion of "too cheap to sell." Cramer said even he has fallen victim to this flawed thinking. In reality, cheap stocks can always get cheaper and stocks that find themselves at new lows typically deserve to be there. If investors find themselves thinking that a stock is "too cheap to sell now," that should immediately be a red flag in their minds.

Avoid these pitfalls and your portfolio will thank you, Cramer concluded.

Stocking Stuffers Finale

For the final installment of his "Stocking Stuffers" series, Cramer focused on two more stocks in his charitable trust, Action Alerts PLUS, Johnson & Johnson (JNJ) and TJX Companies (TJX).

Cramer said Johnson & Johnson is actually three companies in one -- pharmaceuticals, consumer products and diagnostics. Like many companies with multiple divisions, breaking up J&J would unlock a ton of value. But even as a combined entity, J&J is still up 31% for the year.

Johnson & Johnson is a master as cost containment and also has a ton of new products in the pipeline. Trading at just 158 times earnings, Cramer said he'd be a buying under $90 a share.

TJX is the parent of TJ Maxx, Marshall's and Home Goods, three retail chains with 2,600 stores in the U.S. with more in Canada and Europe. Cramer said the growth opportunities at TJX make it very appealing and Home Goods in particular is excelling with high single-digit same-store sales growth.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs