Too Much of a Good Thing: Cramer Explains Weighting Decisions - TheStreet

How do you determine how much weight to allocate for a specific stock? What weight is too high? These were two of the questions posed to Jim Cramer during an exclusive monthly call he had recently with members of his Action Alerts PLUS investing club.

Cramer told members that when he and his staff research stocks to buy for AAP's charity portfolio, "We set parameters ahead of time. ... but it's fluid, especially with this president-elect. We are always looking at how much we should have ... what we typically want to be able to buy more of and what we don't need more of."

Cramer said the AAP portfolio generally keeps all weightings at or below 5% of the total portfolio. "We had to trim Citi (C) - Get Report because it's been such a big win -- and sometimes, we are just betwixt and between, like on Danaher (DHR) - Get Report ."

(Clickhereto learn more about AAP club membership, which offers access to lots of exclusive material, from Cramer's monthly conference calls to e-mail alerts every time he makes a trade.)

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long C and DHR.