That conviction, he said, enticed a friend to give him $500,000 to invest. Cramer said he promptly lost $70,000 of that money while learning another tough lesson: You can never invest big sums of money all at once. Stick with the companies you know and know why you like them, he said. With conviction and discipline that big sum will slowly start to grow.
He also learned lessons while trading at Goldman Sachs ( GS). Cramer said he learned how to build a portfolio from the ground up, how to properly manage capital for the long term and the value of diversification. He learned how to explain investments in plain English, and about humility when things don't go your way. Cramer reminded viewers that individuals can, and do, beat the markets regularly. But that's only accomplished by having solid ideas on which to build. Trades shouldn't be turned into investments if things go south, nor should investments become trades if you rack up quick gains. Only by knowing why you own a stock will you know when it's time to sell, cut your losses or let your gains ride.
All-American CEO Panel
"Mad Money" is celebrating this Independence Day weekend with some of the most iconic CEOs at the helm of companies making this country so great. Now, the encore edition of Cramer's recent conversation with Macy's ( M) Terry Lundgren, Ford Motor's ( F) Alan Mulally, and Starbuck's ( SBUX) Howard Schultz. -- our Invest In America Power Panel. When asked about beating adversity, something all three CEOs have done admirably, they agreed the most important thing is to surround yourself with a great team of like-minded individuals who are willing to dig in and get the job done. They all agreed there are many opportunities to contribute to making a better world and younger people need to find their passion and get to work. All three CEOs also agreed their companies represent some of the best innovation America has to offer. While Ford works on alternative fuels and reduced emissions, Macy's innovates with new retail concepts and Starbucks invents new, healthier drinks. The American dream is alive and well and our society needs to celebrate the creative and entrepreneurial minds that are going out there and making a difference. Success comes with sacrifice, which is why you should never give up and never quit before your achieve your goals, the panel agreed. To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. -- Written by Scott Rutt in Washington, D.C. To email Scott about this article, click here: Scott Rutt Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC