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Road Rules
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Investing can be confusing. Luckily, Cramer has mapped out some road rules for all you Home Gamers trying to navigate the jungle that is Wall Street. Think of it as "Mad Money 101" –- some fundamental advice to keep in mind as you play the market. Whether you're a first time investor or a seasoned financier, it's always good to remember the basics.
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Sep.13
3:44 PM ET
Thursday, 13 Sep 2007
Humility Is a Virtue

OK, here’s the final rule of the night: Don’t be afraid to say something is too hard. There are some things out there that are just too hard to game. No matter how much homework you do, no matter how hard you try, you will never be able to know enough to invest or trade in certain situations.

Cramer says one of the hardest is restaurant same-store sales growth. He admits to getting burned almost every time he’s tried. There are just too many factors at work, he says, too many different things going on that could crush you if you get it wrong.

Now, Cramer’s not telling you not to buy a restaurant stock. He’s just letting you know there a better ways to profit than banking on a better-than-expected same-store sales number.

When Cramer says there’s always a bull market somewhere, he means it. So don’t beat your head against the wall trying to make money by playing something that is just too hard.

Sure, many parts of investing are difficult, but Cramer shared some examples of why restaurant same-store sales are the worst. He once had the CEO of Dominos [DPZ  Loading...      ()   ] on the show and he assured Cramer that he'd be able to meet his same-store sales expectations. Cramer agreed with him, but the CEO got it wrong, the numbers were bad, and the stock tanked. The CEO of Dominos wasn't lying, he was just wrong because the numbers are too hard to predict. Both Starbucks [SBUX  Loading...      ()   ] and Panera Bread [PNRA  Loading...      ()   ] have suffered similar fates with same-store sales in the past. Up one month, down the next.

Bottom Line: Never be afraid to admit that something is too hard to game. Restaurant same-store sales are the hardest, but they're not the only things that are too hard to game. You're not admitting defeat or stupidity if you admit something is too hard – you're being smart and looking for easier pickings.

Questions? Comments?


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