The building blocks of homework are not difficult, Jim Cramer said on his special investing 101

"RealMoney" radio show Monday.

All investors need is the inclination and time to do it, he said. Otherwise there is no disgrace in putting money into mutual funds.

There are no guarantees in this business -- stocks go up and down, Cramer said. But if you've done all your homework, you won't be paralyzed like a deer in headlights when your stock goes down.

"I need you to spend as much time on a stock as you might spend trying to figure out where to eat on a Friday night," he said. "It is the equivalent of a one-hour TV show."

Spend an hour per week on each stock and remember to stay diversified, he said.

"I believe in diversification because I accept the fallibility of my own judgment," Cramer said.

Diversification is not just the remedy for those who pick the wrong stock; it is the remedy for the company that goes the wrong direction, he said.

To have two or three of a kind is a loser this game, he said. Diversification keeps you from getting hurt.

Every publicly traded company has a Web site, which contains almost everything you need to know about a company, he said.

"Every quarter, companies give themselves a report card," Cramer said. "They don't give themselves all A's because management knows they have very smart people listening, and if they don't tell the truth, they will get sued."

Market players should want to know how the company's earnings came about and how its growth is, he said. Double-digit -- meaning 10% or higher -- growth is good, 20% growth is excellent and the growth that blows you away is 30% year over year, he said.

People should also look at the company's 10K -- what it does and how it made its money. Cramer understands that reading the 10K, listening to the company's conference call and reading articles about it might be too difficult for many people.

That's why Cramer focuses on a "know thyself" strategy.

"Do you have the time and inclination to do this?" he asked. "If not, you can go to a mutual fund or a broker who has time to do the research."

To see the most recent edition of The RealMoney Radio Recap in its entirety, please click here. This recap is published every day around 3 p.m. ET.

Jim Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, 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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