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NEW YORK (TheStreet) -- The first quarter went out with a bang, Jim Cramer said on Mad Money Monday. But even as many investors said "good riddance" to a topsy-turvy quarter, the buzz on Wall Street on Monday was Michael Lewis' new book Flash Boys: A Wall Street Revolt.
Cramer said the only thing shocking about Lewis' new book is that people find it shocking at all. Cramer has been a long-time opponent of high-frequency trading, warning investors of how this type of trading hurts not only investors but the markets themselves.
Yet, while the practice of front-running is illegal, high-frequency trading has been overlooked and even embraced by the SEC and the major exchanges. "It's not stealing if it's not illegal," Cramer said as he wished Lewis more luck than he in raising awareness of the issue.
High-frequency trading may only shave a penny or two from your trades, Cramer continued, but given the average market volume, that adds up to $21 million a day skimmed from the pockets of regular investors.
That's why Cramer said he advocates investing for the long term. In the short term, you're sure to lose, he continued, but sticking with solid, multi-year trends will be a winner every time.
Sour on Kandi
No matter how great an opportunity may seem, there's only so much risk investors should be willing to take, Cramer told viewers, as he followed up on Kandi Technologies (KNDI), a stock he panned last week.
Cramer explained that Kandi is a Chinese company that primarily manufactures motorcycles and go-carts, but has also introduced the Coco, a small, all-electric vehicle. The Coco news was enough to propel Kandi shares up 300% over the past 12 months as investors fashioned the company to be the Tesla Motors (TSLA) of China.
But Cramer warned that, for the moment, Kandi is simply a go-cart company, one with no analyst coverage and little oversight by the Chinese government. That fact was driven home when the company received a formal investigation letter from the SEC back in November, yet chose not to disclose it in the company's quarterly earnings. Kandi buried the investigation in the 16-page "risk factors" section of its annual report.
Maybe someday Kandi will be the way to play electric cars in China, Cramer concluded, but for now this stock is just far too risky.
Respect the Rotation
"Respect the rotation," was Cramer's next lesson for viewers as he recounted when he first learned this lesson in the early days of his hedge fund.
Cramer explained the first two stocks purchased by his fund were Heinz and Kimberly-Clark (KMB), two stocks he deemed as unassailable, with solid products and terrific management. The only problem was the economy was picking up and investors were leaving the consumer products stocks for everything related to industry and construction.
That was a big problem, Cramer recalled -- his fund ticked down 9.5% in the blink of an eye, coming dangerously close to the dreaded 10% loss that would have allowed investors to take their money back.
But Cramer said that's why investors need to know what they own and why they own it. For only with that knowledge can they take the beatings the biotechs and the cloud stocks are currently taking. Only with knowledge and homework will you have the courage to buy more as everyone else is heading for the exits.
No Huddle Offense
In his "No Huddle Offense" segment, Cramer asked the question, "Have we lost all of the power themes of 2013?"
That certainly appears to be the case in aerospace, where a perceived inventory glut is bringing down the whole group. In the cloud computing space, it's a flood on new initial public offerings drowning out the established names and making potential upsides from the likes of Hewlett-Packard (HPQ) seem more attractive to investors.
Then there are the biotechs, which are also suffering from a glut of IPOs, as well as the fact that this group never does well at this point in the economic cycle.
Cramer said all of these groups have stories that remain intact, but only time will tell if those stories return in the second quarter -- because they most certainly disappeared from the first quarter.
Off the Tape
In his "Off The Tape" segment, Cramer sat down with Jeff Corbin, CEO of the privately held theCOMMSapp, which provides publicly traded companies with mobile apps for investor relations.
Corbin explained that companies that subscribe to his company's platform can post investor content, such as quarterly reports and conference calls, which will, in turn, be pushed out to investors on their smart phones and tablets. TheCOMMSapp was built mobile-first, said Corbin, and is available for both iOS and Android.
Corbin, a communications specialist, said investors are no longer beholden to their desktop and can follow their investments no matter where they are. Cramer said with theCOMMSapp investors have no excuse not to do their stock homework.
TheCOMMSapp is available to investors for free.
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-- Written by Scott Rutt in Washington, D.C.
To email Scott about this article, click here: Scott Rutt