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Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? 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Investment

Cramer Remix: Protect your money from earnings headlines using these rules

When Jim Cramer first started out in trading, he didn’t like rules. He believed that either they couldn’t really help, or they would cut his upside and prevent him from making more money.

After getting burned too many times, he learned the value of discipline.

“The rules protect you against your own bad judgment about what’s going on at the companies you own or what’s happening in the market overall,” the “Mad Money” host said.

In order to really make money in the market these days, investors need discipline. Mistakes can cost you in trading, but if you do nothing with your money, you will have a whole lot of nothing to show for it.

Investors frequently ask Cramer what to do with a stock after it has had a hideous decline. His first response is always to ask why they bought the stock in the first place.

One of Cramer’s cardinal rules is to never turn a trade into an investment. If there is one thing he wants investors to take away from “Mad Money,” it is to never confuse these two concepts. That means understanding the purpose of why you are buying a stock.

Sometimes an investor will buy a stock for one reason, and then another reason happens. Then they decide to turn the trade into an investment and buy more as the stock goes down. Or perhaps the reason for the trade never happens, so they end up holding the stock.

“What’s the worst thing that can happen? The answer, of course, is plenty, and almost all of it bad,” Cramer said.

One silly mistake that some investors make is to say “if it weren’t for that darned buy of one stock, I could have been up big.”

It only takes one or two losers to wreck a portfolio. Cramer devotes significantly more time to analyzing the losers than the winners, because the winners tend to take care of themselves.

That is why he recommended that investors take the loss on a stock before it gets hideous.

“Don’t buy into the notion that you can’t sell until it comes back, and then you promise not to do it again. That is how losers think,” Cramer said.

The flipside is true, too. Gains won’t be realized until a stock is actually sold, and many investors are reluctant to sell because they don’t’ want to pay taxes. Gains not taken are losses that will be taken, Cramer said.

The biggest mistake Cramer sees investors make is thinking they are supposed to be fully invested at all times. Heck, some money managers have even told him that they are supposed to have all their money in stocks.

This is complete nonsense!

Having cash on hand when a market correction occurs is the key to protecting a portfolio, Cramer says. Sometimes the market will stink, and there is nothing to do but just sit in cash.

“In fact, one of the chief reasons that I outperformed pretty much every manager in the business during my 14-year run as a professional money manager is that there were substantial blocks of time when I was largely in cash,” Cramer said.

Some of the best stocks in the industry require investors to do nothing. Sometimes they can do nothing for ages, racking up small gains over time.

“I say some of the best stocks require some incubation,” Cramer said.

Ultimately, though, Cramer says the business is not about hope. It is about fundamentals. Investors shouldn’t root for stocks to go higher. They simply need to pick stocks of good companies, and be patient unless something changes dramatically.

Questions for Cramer?
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Source: Investment Cnbc
Cramer Remix: Protect your money from earnings headlines using these rules

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