Editor's note: This is a special sneak preview of Jim Cramer's just-released book,

Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)

. Look for more sneak previews every day, and get your free copy with your annual subscription to Action Alerts PLUS; click here for details. Catch Cramer in person at his last book signing event: Saturday, Jan. 12, at 1 p.m. in Westbury, Long Island's Costco. Missed the first sneak previews? Read the book intro and the rules of getting and staying rich: Rule 1, Rule 2, Rule 3, Rule 4 and Rule 5. Know what pros do right and amateurs do wrong: Part 1, Part 2, Part 3, Part 4 and Part 5. Learn the five mini-bull markets that will stampede for years, starting with aerospace and defense, agriculture, oil and oil service, minerals and mining and infrastructure.

4. Pros recognize that not everything is analyzable. Amateurs think that everything can be explained, graded, and traded.

Not that long ago, a persistent questioner on Stockpickr.com kept asking me about a company called

Clean Energy

(CLNE) - Get Report

. He would not let up. Finally I told him it was not analyzable. That wasn't enough.

He said that the legendary oilman T. Boone Pickens owned a big piece and he wouldn't do that if he couldn't analyze it. I told him I didn't know anything about why T. Boone Pickens liked anything but I did know that the company didn't file financials and it based its so-called earnings on the amount of natural gas it pumped into gas tanks. I kid you not! That was the metric. You couldn't even tell what the darned revenues were, let alone the earnings.

Sorry, I think it's irresponsible to invest in something like that. This lesson is quite different from knowing your own limitations. There isn't anyone in the world, including T. Boone Pickens, who can make sense of that stock.

Tons of people call in to my show and ask me about Chinese stocks. Again, the financials are not only often opaque, they are often nonexistent. I can't tell a thing about them. I also am a firm believer that if you can't figure out what a particular bond is, such as a collateralized debt obligation that batches mortgages into a bond, you should never even be invested in a fund that has this junk.

I believe that no one should own a fixed-income instrument or be in any hedge fund or mutual fund that owns something that can't be priced online from a Web service. The bonds that wiped out so many hedge funds and some banks were unanalyzable and unquotable. No one even knew what they were worth.

And that's the bottom line: if you can't figure out what something is worth, if you can't compare it or match it to something else because you can't understand the financials or don't know where it is trading, forget about it.

I will leave you with a story. Recently, a very nice man who had read all my books stopped me in a card store and wanted to know what I thought about a certain Chinese airport stock. He said it was going great guns and that I should look into it. I did. There wasn't even a fact sheet on the thing, just a name of a stock, an address in China, and a price, around $1.50.

Sure, maybe it could go up. But checking it out was impossible. If you can't check out a stock, which means listening to the conference call, making sense of the filings, reading the releases, and comparing it to other stocks, forget about it. That's the basic information you need to make a decision. Without that, you just don't have enough to act on.

Editor's note: This is a special sneak preview of Jim Cramer's just-released book,

Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)

. Look for more sneak previews every day, and get your free copy with your annual subscription to Action Alerts PLUS; click here for details. Catch Cramer in person to get it signed: Wednesday, Dec. 12, at 7 p.m. in Bridgewater, N.J.'s Borders; and Saturday, Jan. 12, at 1 p.m. in Westbury, Long Island's Costco. Missed the first sneak previews? Read the book intro and the rules of getting and staying rich: Rule 1, Rule 2, Rule 3, Rule 4 and Rule 5. Know what pros do right and amateurs do wrong: Part 1, Part 2 and Part 3.

From Jim Cramer's Stay Mad for Life by James J. Cramer and Cliff Mason. Copyright

2007 by Jim Cramer. Reprinted by permission of Simon & Schuster, Inc.

At the time of publication, Cramer had no positions in any of the stocks mentioned.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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