Jim Cramer gave some advice for investors looking for advice during this volatile market.
"Re-evaluating on the fly. It's one of the most difficult jobs out there. You are trying to figure out what to pay for something and no sooner do you arrive at a price than it is taken out by some seller who is so anxious to get out that your rational analysis means nothing," Cramer wrote in his Real Money column on Friday morning.
Jim, let's talk about your Real Money column this morning. You talked about how important it is to be able to reevaluate on the fly and how difficult that is.
So, for investors doing that this morning, what's three quick tips?
Sure. Well, first, you don't buy up. We're using Karen Kramer rules here. I talk to Karen pretty much every day of my life. I don't talk about what stocks to buy, because that would violate my personal rules and rules that I'm sure exist somewhere. But her rule was, "You can never buy up." She never would be as polite as that. She would say, "You're an idiot. The time to buy was yesterday." And it always hurt because what it said was, "Well, I like Disney so much, but I didn't have the guts to buy it yesterday. So now I missed it." So when you have an up opening, you missed it. Okay? You just missed it. And that's okay. There are trains coming around all the time. But you never buy an up opening, even if it means that it's going to continue to go up, because you missed it. And someone might just say, "Jim, that's not true. If you look at Disney at 95, it could be at 150. Who cares?" And I say, "Well, the answer is I care."
And you might think that I'm small-minded, but the odds favor the market to come back because nothing's changed, other than the promises of the Treasury secretary. We're still in the early stages, as Dr. Fauci would say, of the illness. We don't want the illness, obviously. I mean, I have to evaluate all aspects of my life, and I also want to put money to work in my 401(k). But until I know from the Treasury secretary that there are no limits, and I can buy when I want to, and buy and put more money to work, I'm afraid that there's a limited amount of money, and I don't want to commit it yet. I am itching to commit. I did commit for my IRA. I committed about a third of the cash that I had. And it was bad. I committed it too high. The market was already down 20%, and I thought it was right, and it was obviously premature. But the next level has to be down 30%. And I'm disciplined with that money. Why? Because there's a finite amount of money you can contribute.
But I want people to buy in stages. I want people to buy companies that have good yield but can afford the dividend. Many of the companies that have very high yield cannot afford the dividend, by the way. And I want people to be patient. Don't buy it all today. We're going to have a series of headlines over the next two, three months that are going to be very negative. And, remember, South Korea... We're now heralding that they beat it. Well, did they beat it? I don't know. I mean, they had the kits, and the kits really do help, and if we have the Roche kits, that'll be terrific. But, Katherine, even if there was no coronavirus, if there was no COVID, I would never say, "You got to just be all in right now," because it's down a lot. It just doesn't work like that.
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