Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
A version of this program last aired Feb. 16, 2016.
If you thought earnings season was now in the rearview mirror, think again, Jim Cramer told his Mad Money viewers Friday as he laid out his game plan for another busy week of earnings excitement and confusion.
The week begins on Monday with earnings from Vulcan Materials (VMC) and Frontier Communications (FTR) . Cramer said the Vulcan should have a good story but Frontier is too risky and he advised against reaching for its 8% yield.
On Tuesday the earnings come fast and furious with Cummins (CMI) , Pfizer (PFE) , Procter & Gamble (PG) and CVS Health (CVS) . Cramer likes all four companies, but Pfizer is his favorite. He is less optimistic on Fitbit (FIT) and Electronic Arts (ERTS) , which also report Tuesday.
Wednesday brings earnings from Clorox (CLX) , with a solid 2.5% yield; R.R. Donnelley (RRD) , which is splitting itself into three companies; and animal health provider Zoetis (ZTS) . Cramer is bullish on all three but he cautioned the stock of Time Warner (TWX) has run too much.
Finally, on Friday, the latest non-farm payroll reports will be released. Cramer said a strong employment number will reignite Federal Reserve rate hike talks, sending high-yielding stocks lower.
Methods to My Madness
Individual investors can not only invest like the pros, they can beat them, too, Cramer said, detailing the methods to his investing madness.
Cramer said it doesn't take a lot of effort to invest one's own money, just a few hours a week for research, the "homework," as he so often calls it. But the results from that research will bear far more fruit than blindly dumping money into an index fund or, worse, a bond fund in a time of historically low interest rates.
Where can investors find their research? Fortunately, it's practically everywhere, said Cramer, on sites like CNBC.com, TheStreet.com, Yahoo! Finance and others, as well as on the Web sites of every publicly traded company.
When starting out, Cramer recommended using the 52-week high list. The new highs list shows stocks with true momentum, said Cramer, especially in a bad market. But that does not mean that investors should just blindly chase every stock on that list. Instead, research will still need to be done to separate the truly great stocks from the ones that are just lucky.
After researching the new high list and picking out the true winners, Cramer said the next step is determining when to buy them. He said a pullback of at least 5% is usually a good entry point, especially when that pullback is caused by general market weakness. You should only buy stocks that have pulled back from the new high list if you're confident they'll make a comeback, he continued.
Cramer said he always advises adding to a position on weakness, then trimming those positions into strength. A broad, market-wide selloff provides an excellent entry point for adding to positions, he concluded.