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How Jim Cramer Approaches Speculative Stocks, Signs He Looks For

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On CNBC's 'Mad Money' Tuesday, Jim Cramer took the examples of Clear Secure  (YOU) , Blade Air Blade Air and Wheels Up to explain the importance of doing your homework well before investing in the latest round of public offerings.

While Blade Air and Wheels Up make attractive speculative plays, Cramer said Clear Secure's valuation makes the stock far too risky. Clear Secure is valued at 25 times sales.

So what should you look for when determining if a speculative play is worth your attention? 

Jim Cramer broke down five signs to watch for in the video above. 

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