In Get Rich Carefully, Wall Street veteran Jim Cramer of CNBC fame, aims to turn you “from amateur investor to someone who can go toe-to-toe with professionals….” Whether you are a newbie with a resolution to start investing in 2014 but with a knowledge base level of zero, or you are one of the experienced investors who were doing just fine until the most recent recession/depression, this book is for you.
At over 400 pages, Cramer succeeds in teaching beginners “What Moves a Stock,” illuminating the “tug-of-war between buyers and sellers,” bringing technical traders (chartists) together with fundamentalists (who, like Cramer himself “make my buy and sell recommendations after studying as much publicly available information as possible about the companies themselves” and schooling everyone on “When and How to Sell in the New, More Difficult World.”
For my money, the chapter, “CEOs: The Bankable 21″ stands out from many other personal investing guidebooks.
I want you to focus, going forward, on the jockey as much as the horse. Or if racing eludes you, I want you to bet on the head coach, because that’s who plays the biggest role in determining the revenues and the earnings, while providing the priorities and the vision necessary to deliver superior performance for years and years to come. If we want to get wealthy over time, we have to identify who can help us get there and, in the parlance of wagering, lay money on them, or in the argot of Wall Street, buy shares in their companies.
Considering that most press about CEOs tends to be negative (re: their salaries, their failings) it’s interesting to read which leaders–such as Bob Benmosche at AIG, Debra Cafaro at Ventas, and Terry Lundgren at Macy’s–Cramer recommends we follow.
His final chapter, “Check Your Emotions at the Door” is also particularly insightful as Cramer has been on the frontlines for many decades, through good and bad. Being an emotional investor can cause you to make bad decisions when you buy in without proper research, or when you sell too early.
If we are going to be the best investors we can be, we have to learn how to tame our worries yet stay skeptical enough to make considered judgments about when our investments have gone awry. A scared investor is a terrible investor. But the other bookend, euphoria, is just as toxic to our financial judgment. We are all human, but human nature can be the real enemy to investing with precision and prudence.
What’s the alternative? Cramer advises us: Don’t fall in love, don’t believe in miracle workers, don’t be too skeptical, and have faith.
And really, at its core, Get Rich Carefully is an optimistic book. I suppose it needs to be because no one who invests is likely to be a pessimist, miser, or pacifist, but it’s what I enjoyed the most about the book. Always enthusiastic, Jim Cramer is trying to look on the bright side of an economic mess that includes a massive dose of mistrust of Wall Street and help you help yourself.
I have tried in this book to demonstrate that there are people and businesses and themes that can overcome the vicissitudes, reversals and turmoil that we have seen and experienced throughout this era.
If you are interested in dipping your toe (back) in the waters of investing, Get Rich Carefully, is the first investment you should make.