Mad Money w/ Jim Cramer – August 29, 2025

Host: Jim Cramer (CNBC)
Episode Theme: Big Picture Investing Rules and Developing Good Investor Habits

Overview

In this episode, Jim Cramer takes a step back from daily stock picks and dives into the fundamental principles required to succeed as an investor. The show is equal parts practical advice and motivational pep talk, blending discipline, emotional intelligence, and actionable strategies. Cramer talks through rules he’s gathered from decades on Wall Street, fields listener questions, and dispenses memorable stories aimed at helping listeners build resilient, intelligent investment portfolios.

Key Discussion Points & Insights

1. Investing Discipline & Philosophy

• Cramer’s Core Mission: “Other people make friends. I’m just trying to make you some money. My job is not just to entertain, but to educate and to teach you to be a better Investor.” (00:22)
• Enduring Wisdom: Rules and frameworks are crucial. Without discipline and a clear philosophy, investors get into trouble; you need guiding principles to manage through different markets, not just react to daily price action (00:30–02:00).
• Contradictions to Navigate: Investing advice often sounds contradictory:
  • “We tell you to have conviction, to stick with companies you believe in. And then we say you need to be ready to change your mind…if the facts change. You need to be cautious, but you need to be ready to pounce on opportunities when they present themselves.” (00:50)
• Building Good Judgment: Cramer asserts that good judgment in investing “is not the kind of thing anyone can teach you in an hour of television… That’s why I try to help you build good habits.” (01:50)

2. Self-Knowledge & Suitability

• Know Yourself First:
  • Before buying any stock, investors must assess objectives, risk tolerance, and time horizon: “You simply can’t know which stocks you should buy if you haven’t taken the time to really consider what your objectives are.” (03:30)
  • Defines the concept of “suitability”: matching investment choices not just to the market, but to personal life goals and risk comfort (05:10).
• Analogies:
  • “You want to fly across the Pacific Ocean. You do it in an airplane… you don’t try to fly across in a Ford Fiesta.” (06:20)
• Portfolio Segmentation:
  • Cramer recommends segmenting portfolios: a retirement portfolio (cautious, slow, steady) and a discretionary ‘Mad Money’ portfolio (higher risk, with money you can afford to lose). Most investors should focus on the retirement side (08:10).
• Multiple Objectives:
  • “You can and should have multiple pools of money… your strategy for college tuition savings or future house savings should look more like your retirement portfolio than your Mad Money portfolio.” (08:40)
• Quote: “Get to know yourself before you jump down the rabbit hole of getting to know individual companies.” (08:50)

3. Index Funds, Dividends, and Building Wealth

• Index Funds as Foundation:
  • “I’ve recommended index funds endlessly and I’ll keep doing it because they are phenomenal.” (07:40)
  • Cramer advocates investing your first $10,000 in a low-cost S&P 500 index fund before picking individual stocks (07:50).
• Role of Dividends:
  • Cites 4% dividend yield as a compelling long-term strategy: “Even if the underlying stock goes nowhere, that 4% annual return will double your money in 18 years, thanks to the magic of compounding. Of course, you got to reinvest that money.” (07:55)

4. Listener Q&A: Mutual Funds and Debt Analysis

• Mutual Funds vs. Stocks:
  • Question from Tony in Washington (09:03): “I never made any real money until I started buying individual stocks. I don’t understand why mutual funds are so popular.”
  • Cramer: “I happen to like individual stocks and I like the S&P 500… I’m not going to knock the mutual funders either. Some very good companies do a great job.” (09:23)
• Analyzing Company Debt:
  • Rainbow from San Jose asks about debt and enterprise value (09:57):
  • Cramer: “I look at how much money the company has to pay in interest, I look at how much money they make and I decide if they don’t make enough money to cover that interest, then it is a sell. And every time I violate that principle, I go wrong.” (10:26)

5. Homework & Diversification

• Before You Buy:
  • “If you’re going to invest enough money in a company for it to matter to your portfolio, you need to know what the heck the company does. You need to know how it makes its money.” (11:00)
  • Use SEC filings, conference call transcripts, and company websites for research.
• Diversification:
  • Portfolio of 5-10 stocks across distinct industries (“no sector overlap”).
  • “Any more than 10 and you lack the time to keep up with them.” (12:50)

6. Flexibility & When to Sell

• Flexibility is Vital:
  • “Always try to stay flexible. You got to be flexible because business by its very nature is dynamic, not static. Things change. Markets change.” (14:00)
• Sell When Thesis Breaks:
  • “If your thesis is no longer intact… Sell, sell, sell. You have to.” (15:00)
  • Warns against falling in love with a stock: “You don’t swear to stick with it in sickness and health for richer or poor. It’s just a piece of paper.” (17:00)
• Notable Quote: “It’s buying homework, not buy and hold.” (17:40)
• Case Study:
  • Bed Bath & Beyond – $11.8 billion wasted on stock buybacks while losing ground to Amazon, went bankrupt. Key mistake: Management was not flexible and failed to adapt. (18:00)

7. Emotional Discipline

• Emotions Matter:
  • “Without the right attitude, stocks will break you. I mean it. They’ll break you.” (20:40)
• Dealing with Losses:
  • “You need the patience of the Dalai Lama to not get upset when you buy a stock and it falls off a cliff.” (21:10)
• Avoid Regret Games:
  • “Don’t get hung up on the what I should-a, could-a up. This is a wasted, damaging emotion.” (22:20)
  • “I would be obsessed, going over and over the big miss—just was the wrong thing to do. Not anymore.” (23:28)
  • Tip: Remove tickers of sold stocks from your watchlist/social feeds to avoid obsessing over missed gains (24:45).
• Big Picture: “The market can be punishing enough. You don’t need to make things harder by punishing yourself.” (25:57)

8. Retirement and Staying Invested

• Listener Joe:
  • Portfolio of dividend stocks now yields nearly as much as Joe’s salary; planning to retire at 59.
  • Cramer: “Never bet against yourself… I’m one of the few people in the world who feels that a person, say you’re 75, 80, should have be 50% in equities.” (26:04)

9. Management Transparency & The 30-Day Rule

• Believe Management’s Warnings:
  • Cramer adapts Maya Angelou’s quote for investing: “When someone shows you who they are, believe them the first time.” (27:10)
  • “When a CEO tells you that business is bad, take the word for it. Don’t try to make excuses for them. Just get the heck out.” (27:22)
• Examples:
  • Jensen Huang (Nvidia): His confidence in 2022 presaged the AI boom.
  • Mark Benioff (Salesforce): Predicted resilience during the Great Recession.
• 30-Day Rule After Bad News:
  • “Whenever a company announces a shortfall, you need to wait at least 30 days before you even think about buying a stock.” (29:30)
  • “If they thought that maybe something could get better, not worse, in the next 30 days, they’d just keep their mouth shut. Yet preannouncements or severe guidance cuts signal ongoing weakness that you can’t be tempted by. That’s why I recommend waiting at least 30 days…” (32:00)

10. Recognizing Market Irrationality

• Don’t Assume the Market is Right:
  • The market often moves stocks for “the wrong reason or no reason, or an outright stupid reason.” (34:00)
  • “Stock prices do not somehow reflect reality. As if by magic. There is much a product of perception on Wall Street and the mechanics of the money management business as they are a product of the fundamentals.” (35:25)
• ETF Effects:
  • Sector ETFs can drag down good stocks with bad ones; creates buying opportunities for discerning investors.
  • Example: Tenable’s poor report (cybersecurity) led to an unnecessary selloff in Palo Alto Networks, which then rebounded (38:15).

11. Further Listener Q&A Highlights

• Deploying Cash:
  • Add gently, buy in increments as stocks fall rather than all at once. (40:36)
• Economic Narratives:
  • Ignore attempts to time purchases according to recession/expansion predictions: “We’re looking for high quality growth companies that do well in thick or thin.” (41:18)
• Sizing Positions:
  • If a holding falls below 2% of the portfolio, consider if it’s worth keeping—otherwise, “no more selling.” (41:44)
• Selling Underperformers:
  • If a company “is not doing well,” then sell. What matters is “growth, whether the company’s making money, and whether it has good profit margins.” (42:45)

Notable Quotes

| Timestamp | Speaker | Quote | |-----------|-----------|-------| | 00:22 | Cramer | “Other people make friends. I’m just trying to make you some money.” | | 06:20 | Cramer | “You want to fly across the Pacific Ocean… you don’t try to fly across in a Ford Fiesta.” | | 07:50 | Cramer | “Invest your first ten grand in an index fund… It’s the most important bedrock of your portfolio.” | | 10:26 | Cramer | “If they don’t make enough money to cover that interest, then it is a sell. And every time I violate that principle, I go wrong.” | | 15:00 | Cramer | “If your thesis is no longer intact… Sell, sell, sell. You have to.” | | 17:40 | Cramer | “It’s buying homework, not buy and hold.” | | 25:57 | Cramer | “The stock market can be punishing enough. You don’t need to make things harder by punishing yourself.” | | 27:10 | Cramer | “When someone shows you who they are, believe them the first time.” (Maya Angelou) | | 29:30 | Cramer | “Whenever a company announces a shortfall, you need to wait at least 30 days before you even think about buying a stock.” | | 35:25 | Cramer | “Stock prices do not somehow reflect reality. As if by magic. There is much a product of perception on Wall Street…” | | 41:18 | Cramer | “We’re looking for high quality growth companies that do well in thick or thin. It is a big mistake to game all that recession stuff.” |

Segment Timestamps

• Introduction and Cramer’s Philosophy – 00:22–03:00
• Suitability and Portfolio Segmentation – 03:00–09:00
• Listener Q&A: Mutual Funds, Debt/EV Evaluation – 09:03–10:26
• Homework, Diversification, and Meta-Rules – 11:00–14:00
• Being Flexible, When to Sell – 14:00–19:00
• Emotional Discipline & Regret Management – 20:40–26:00
• Q&A: Retirement Income and Staying Invested – 25:11–26:53
• Cramer’s Maya Angelou Rule – Trust Management Signals – 27:10–33:20
• Market Imperfection & ETF Distortions – 34:00–40:00
• Rapid-Fire Listener Q&A – 40:17–43:48

Memorable Moments

• Cramer’s “Fiesta vs. 747” Analogy: Simplifies how the right vehicle (or investment) is required for the specific goal—resonates for new investors (06:20).
• Bed Bath & Beyond Story: Case study on corporate inflexibility, misallocation, and why investors must be willing to change (18:00).
• Maya Angelou Quote Adapted: Demonstrates how lessons of honesty apply to corporations and investing (27:10).
• Practical Tips for Emotional Health: Removing losing tickers from your watchlist—an actionable and relatable step (24:45).

Takeaways

• Self-awareness and clear objectives are the foundation of investing.
• Basic portfolios should start with index funds; diversify with stocks only after a core is built.
• Do the ‘homework’ on every stock—know the story before buying; limit holdings to what you can follow.
• Embrace flexibility: be ready to change course if your investment thesis fails.
• Manage your own emotions more than anything else—don’t dwell on missed opportunities, and don’t self-punish.
• Trust honest management signals—take warnings seriously and wait 30 days after bad guidance.
• Recognize market irrationality as an opportunity—don’t assume every stock move is justified.

Closing Words:
“There’s always a bull market somewhere. Promise you I can find it just for you right here on Mad Money. I’m Jim Cramer and I will see you next time.” (43:30)