there's nothing worse than watching the averages roar higher. while your portfolio sits there barely moving. it makes you feel like a complete dope. like the stock market must be a total shell game, but really it just means you might be making a few basic mistakes. that's why tonight i'm devoting the whole darn show to my playbook for taking advantage of a short term -- short term rally. not to be confused with the so-called bear market rally which is what people throw around when the stocks go up when the intelligent is a thinks they should be going down. i'm giving you a game plan for how the short term run ups in terms of long term runs. what kind of bozo, incompetent dufus needs a guide to make a money in a rally? is cramer going to draw us a picture on how to pick your nose? who needs help when it's up during a multiday run-up? like a love buy fest? do you need my help to help you deal with the stocks and do we buy into more money, problem on the show. absolutely not. but i'll explain it get back to those of you have had their portfolios trashed make shurg that doesn't happen again. rebuilding your wealth on a sound basis. sure, everybody makes money in a big rally. you can feel like your portfolio is running itself, but i'm not here tonight to talk about how to make the most possible money when the market is up big. honestly i can care less. the most important lesson for dealing with a major short term move higher is that you always have to work to prepare yourself for the future. and not let some great opportunity pass to sell sell sell. i know, you heard it. dirty word, not from me though. that's right. just as we can't give in to despair when the market is down big, you similarly don't want to give into euphoria and buy buy buy when the market is roaring. when it might be the right time to let go of some stock. you don't actually have a profit remember until you do something something. you weren't making money until the register is rung. the idea that you buy and hold through the best of times, by the way that hasn't been borne out. it's not true. no matter how many times you've read it or been indoctrinated by it. you need to need strength to lighten up. especially those that are deteriorating. which is why insist on people doing the homework. that's propounded by doctrinaire gray beards many of whom i like personally frankly off the desk. but i know they simply haven't done the work that, okay, i have. let me put it this way. nobody wants to miss a rally. you sold every stock you own right before you jumped, you'd feel like an idiot, a loser, a stooge. not even larry, moe,
let's face it, that's shemply. let's look at it another way. you're in stocks for the rally and you have massive gains but you don't do anything. you just let them ride. and then gradually, your stocks come back down. perhaps back to the price before the rally or maybe even lower. how many times has that happened in the last decade? if you hang on foreign too long, if you let your gains ride until they evaporate, you might as well have missed the rally entirely. you have made nothing and you have to hold on to a whole bunch of stocks, not deserving of your ownership. making lots of money on great day or a great month or a great year is wonderful. it's why many of you are in this game. but you can't view a rally as just a day or a few days where your portfolio went up in value. and nothing more. you have to see it as a time to actually take action. even if you don't fancy yourself a trader. this doesn't make you a trader. believe me. i'm not talking about market time. if you're like that, you have to make an exception. you have to make an exception for the good days, i'm going to tell you why. it does not mean i'm turning into a high speed trader any sort -- that is just a bogus charge in itself. don't misunderstand me. a big up day is something that should be celebrated. i'm in favor of them. and they should be remembered. why? because the next time we get hit with a nasty down turn, you should remember the good days, it will keep you in the game. which is the ultimate mantra of cramerica. just as you need to remember the good days during a sell-off, you have to remember there's more sell-offs in the future when the market is roaring. that's why so often i say sell the rips but buy the dips. don't pass up an opportunity to lighten up just because you earn stocks for the long run or because you have heard it's wrong to trade stocks for my time and that you're an any investor. it does not absolve you of the need to have a judgment. in other words, you have to approach every rally with a grain of pessimism about what's going to come next. that shouldn't be hard after the european crisis seemed to crush us over and over again, 2010, 2011, every time we thought they were out they'd pull you back in. the dow would rocket up 200 points only to get crushed for hundreds of points by some other official counteracting that person saying something negative. that kind of volatile action is a classic example of why you use a major rally to take the profits because you don't know how long the profits will last. there's nothing good about feeling good about a rally. with someone with violent mood strings and heading straight for the dirty linoleum fe get a bad tape, euphoria is fine. and complacency is the enmy oh every investor. on a big up day you can be thrilled. don't forget you have a terrific opportunity to sell a lot of stocks at great prices that perhaps they don't deserve. that's what short term rallies are for. we can get swept away by the positivity. i know because i have been there myself. not just because of the olympic related spice girls flick. when the market is up and everybody is optimistic the last thing most people want to do is sell. once you believe in the market again, when everything seems wonderful how could you want to sell stocks? your emotions are going to get in the why of making the right decision. the exuberance is enough to forget the basic maxim of all. buy low, sell high. notice it doesn't say buy low, hold. it's buy low, sell high. so you end up sitting back and watching your storks go higher without a care in the world. you know what, nobody made a dime being care free. the trouble with being complacent during a rally is it encourages you do the exact opposite of what you should be doing. i know the feeling. yousitting there and watching the gains roll in and selling stock would be the most insane thing, because what happens if the rally keeps going? doesn't matter. we never sell all at once. that way timing isn't much of an issue. remember, we're not market timers or sellers or technicians. take some off. if the rally hold up, hey, you can sell more later and higher. the name of the game people is preparation. there's no way to prepare for a rally other than by owning stocks, but during a rally you can prepare yourself for the bad days and the really bad days that are coming. the best time to adjust your portfolio so that you're ready for the next sell-off is when stocks are ramping and going higher. and that's why you have to approach a rally with caution, not with unbridled enthusiasm. when the dow is up a couple hundred burkes in a day i don't think, wow, this market is great. what a time to buy. no, after i calm myself down, maybe bite the heads off the little bear toys that i keep on the desk, i think -- i think about what's going to -- what i'm going to need if the market goes south. and i also consider what you can do for your portfolio today. the day of the rally that you couldn't do yesterday. the answer to both questions involves selling. i don't mean sell anything. that would be nuts in all but the most dire situations. we believe in buying stocks and selling stocks incrementally.
Sentiment: Strong Sell
that's what i taught about in my first book. hey this is my show, so i'm entitled to a little shameless self-promotion. during a rally you want to sell in bigger increments to get the great prices while they rest. the rest of the show aim going through the mad money playbook that i inted and i'm going to explain what to sell and how to sell it. don't get carried away by the optimism. instead, focus on the long term. think of the goods that don't it was to be owned to got marked up and lifted up everything. including stocks. that would otherwise not be worth your time or more importantly your money. karl in new jersey, karl? caller: boo-yah to you from the garden state. i love the garden state. the mall is a terrific place too. what's up? caller: i have a question. how do you differentiate between a seasonable rally and a bull market? seasonal rally it's outmoded. it used to be a summer rally and a santa claus rally. there was a rally between rosh hashanah and yom kippur. we get the short squeezes and i try to distinguish between the two every night. randy in my home state of nebraska. randy? caller: big boo-yah, big midwest boo-yah to you. what's up? caller: two-part question for you. what is difference between day trading and after hours trading and if a stock makes a big move upward move in after hours trading, is that an indicator to sell. day trading is the guy trying to get in or out? it's the inflattic at the end of the day. trading after hours means you're trading the information very thin market typically on trying to be able to outguess everybody else. i think unless you're a quick drummer of hedge fund, you should never be in after hours trading because you'll get your head cut off. brian in new york? caller: hey, boo-yah to you. way to go, boo-yah. what's up? caller: my question is about buying stocks on a pull back. i know you like to pull the trigger and buy in inkrementds. let's say i bought 50 shares of x, y, z. a 19, a hundred at 18.50 and the stock continues to fall but my position is filled. i can't add more nor do i want to. i feel i made a mistake in timing my purchases in increments. he's the three-part question. what dggest i do, what's the correct percentage or the of stock to buy in the buy back and what percentage d you buy -- first, you did a tight scale. i don't advocate tight scales. you need what's known as a wide scale. your first 50 can be at 19. then you have to wait a point.
Sentiment: Strong Sell