Biking for Bronze in Beijing
American Donny Robinson took the first-ever bronze medal in BMX bike racing at this summer's Beijing Olympics. As usual, Cramer was ahead of the curve on calling a winner. He interviewed Robinson on Mad Money way back in April.
Robinson may be a champion athlete, but he's also a typical twentysomething looking for smart ways to invest his money and prepare for the future.
Cramer first recommended that Robinson start to look for a home ofhis own (he's still living with the 'rents). The Mad Money host at the time was expecting housing prices to drop another 10%, so he wanted Robinson ready to buy when the opportunity arose.
"I smell a bargain," Cramer said. "When no one else wants them, I'm buying."
Anyone who receives a quarterly performance statement from their stock or mutual fund holdings knows how difficult a market it has been since August 2007. For that reason, Cramer suggested Robinson play it safe with his savings if buying a house is definitely something he wants to do.
"You could lose money," Cramer said, so keep half of your savings in cash and the rest in good dividend-yield stocks like AT&T and Verizon.
But if Robinson would rather focus on pure investing, then he should buy 100 shares of his sponsors: Nike, McDonald's, AT&T, and Kellogg. That way he can balance his hectic training and race schedule with learning the market.
Picking a speculative stock is a good strategy for young investors, too. Cramer told Robinson to look for a potential play while he was in Beijing, maybe a Baidu or Focus Media. The payoff could be great. If not, a loss isn't the end of the world.
"You have your whole life," Cramer said, "to make it back."
Jim's charitable trust owns McDonald's and Nike.
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