Cramer's Playbook

For the next installment of "Cramer's Playbook," Cramer answered a handful of questions on how investors should get started with investing.

Cramer said that ideally investors should have between five and 10 stocks in a well-diversified portfolio. But, he noted, investing takes time, especially to do the homework and listen to the quarterly conference calls. Investors without the time or inclination should stick with an S&P 500 index fund.

For investors with the time and at least $10,000 to start, Cramer suggested a portfolio where no more than 20% is invested in any given sector.

Cramer's sample portfolio included EOG Resources (EOG) for domestic oil and gas; Google (GOOG), a stock Cramer owns for his charitable trust, Action Alerts PLUS, for technology; Johnson Controls (JCI), another AAP holding, for industrials; Costco (COST) for retail and Merck (MRK) or Gilead Sciences (GILD) for health care exposure.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer opined on a stock he hasn't mentioned in years: VeriFone (PAY).

Cramer said that after stumbling for many years, this quarter the payment processor signaled that it's back in the saddle by delivering fantastic results with accelerating growth. Shares of Verifone shot up 11% on the news.

In addition to having powerful global trends in its favor, Cramer said that VeriFone is also an attractive takeover target. He said eBay (EBAY) could be one possible suitor, as activists are pushing the online retailer to spin off its PayPal unit, which would blend nicely with VeriFone's bricks and mortar dominance.

Cramer said that Starbucks would also be a good fit for VeriFone, as the coffee and tea chain is already big into mobile payments.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.

-- 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

At the time of publication, Cramer's Action Alerts PLUS had positions in GOOG and JCI.

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