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.
Like buying things and not understanding why.
Rule 24: Explain Your Picks
"You should always be able to explain your stock picks to someone else, anyone else,
even if you don't have a broker's ear," says Cramer.
He worries that too many people own the stocks of companies that they just don't understand.
"When I was at my hedge fund, I always made every portfolio manager sell me the stock, literally sell it to me like a salesperson, before I would buy it," he says.
Watch Rule #24 to hear why now!
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