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:
- Jim Cramer's Rule #1: Bulls Make Money, Bears Make Money, Pigs Get Slaughtered
- Jim Cramer's Investing Rule #2: It's OK to Pay Taxes
- Jim Cramer's Investing Rule #3: Don't Buy Stocks All at Once
- Jim Cramer's Investing Rule #4: Buy Damaged Stocks, Not Damaged Companies
- Jim Cramer's Investing Rule #5: Diversify to Control Risk