Speculation

Cramer believes that speculation is a healthy part of every diversified portfolio. His angle seems to be that in order to keep you interested in managing your money speculation is necessary because it provides the fun. He stresses however that you shouldn’t speculate with your retirement portfolios. I agree with this completely, the one caveat I have is that for someone extremely young it may be prudent to take some bigger risks as the compounding of that risk over the next 50 years could be HUGE.

Cramer would rather speculate on young companies and ones with good balance sheets than those that were once great and are now beaten down. He believes that baskets are the best way to speculate on a sector that has been beaten down.

Cramer is against borrowing money to buy stocks, i.e. using margin.

Spotting Bottoms

Cramer believes that charts alone are not enough to buy on a bottom – fundamentals are needed too. He identified three items he likes to see in spotting bottoms: Sentiment needs to be terrible, more then 50% bears on the AAII Investor’s Intelligence survey, and mutual funds pulling out of the market in a big way.

More thoughts

Cramer does not like market orders and prefers everyone using limit orders.

Cramer believes you should sell when you see a reverse stock split because “9 times out of ten that stock is going right back where it came from.”

Disclaimer: This blog has no affiliation with Jim Cramer, CNBC, or Mad Money. If you'd like to contact Jim Cramer directly, email him at madmoney@cnbc.com, or call 1-800-743-CNBC. This summary is done for you and I to be able to better track and follow Jim Cramer’s comments. ACCURACY IS NOT GUARANTEED but is however strived for.

"Bull", "Bear", "Best of Breed" and other marks can be inferred and don't necessarily need to be stated directly for me to record them as such.

Top of Show - LU - m y - 3.04 - Lucent Technologies Inc. - Cramer Owns It -
Thought - INTC - m y - 26.25 - Intel Corporation - Cramer Owns It -
Thought - YHOO - m y - 34.94 - Yahoo! Inc. - Cramer Owns It -
Am I Diversified? - MO - m y - 65.1 - Altria Group, Inc. - Cramer Owns It -
AID Cramer - ATK - m y - 69.65 - Alliant Techsystems Inc. - BULL - Cramer Owns It -
AID Cramer - UNH - m y - 53.14 - UnitedHealth Group Inc. - BULL - Cramer Owns It -
Am I Diversified? - XEC - m y - 39.13 - Cimarex Energy Co. - BULL - Cramer Owns It -
Am I Diversified? - YHOO - m y - 34.94 - Yahoo! Inc. - BULL - Cramer Owns It -
Am I Diversified? - JPM - m y - 35.96 - JPMorgan Chase & Co. - Cramer Owns It -
AID Cramer - GIS - m y - 47.21 - General Mills, Inc. - Cramer Owns It -
AID Cramer - G - m y - 51.25 - The Gillette Company - Cramer Owns It -
Am I Diversified? - BBY - m y - 69.15 - Best Buy Co., Inc. - BEST OF BREED -
AID Cramer - ECA - m y - 40.27 - EnCana Corporation (USA) - BULL - mortgage calculator