Jim Cramer's Investing Rule 22: Wait 30 Days After Warnings

Action Alerts Plus portfolio manager and TheStreet's founder Jim Cramer says you must wait 30 days after a company pre-announces a warning. Watch Rule #22 of his 25 Investing Rules to find out why now!
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Action Alerts Plus portfolio manager and TheStreet's founder Jim Cramer has learned a lot over his 30+ years of investing. So he created a list of 25 Rules for Investing that can help you avoid the novice pitfalls that even he fell into on occasion.

So pay special attention when a company pre-announces a short-fall.

Rule 22: Wait 30 Days After Warnings

"When a company pre-announces a short-fall do not think that it will come back any time soon," he says.

Here's why: "When a company pre-announces a bad quarter, it isn't just looking at the past. It is looking at its order book -- its future."

Pre-announcements signal not just weakness -- but ongoing weakness.

So watch Rule #22 and learn why Cramer thinks you should wait.  

Want to watch ALL of Jim's Rules -- with no ad interruptions? It's easy, just click here to watch the entire Jim Cramer's 25 Rules For Investing!

or catch a few more of Jim's Ruleshere: