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Cramer's 'Playing Defense' Rules: Part 2

Friday, 14 Aug 2009 | 8:28 PM ET

Forget about making money. Sometimes holding on to what you have is much more important.

Cramer's Game Plan
How to succeed in the market, with Mad Money host Jim Cramer.

That was the focus for Friday’s show. Cramer offered up 25 rules that will keep you from losing your hard-earned cash when the market’s at its worst.

Remember: Plan for the downside, and let the upside will take care of itself. The best way to do that is by following these important tips.

5. It’s always good to have cash on hand. Don’t scoff at money-market accounts. Sure, a dividend from AT&T or Verizon might pay more, but the extra money will come in handy when the market takes a dip and you want to buy some broken stocks. As Cramer said, stop looking at the cost of being in cash and start thinking about the price you pay for not having cash when you need it.

6. Don’t own too many wild swinging stocks. Sectors like natural gas, copper, steel, fertilizer, rails and tech can be very volatile. A portfolio full of these plays can be a bit much for the average investors. Be sure you’re up to the challenge if you want to own these names.

8. Stocks under $5 can be dangerous. These names feel to these lows for a reason. Keep that in mind when you’re thinking you can make a quick buck off single-digit stocks. They can cost you just as much money as your other holdings.

9. Accounting irregularities equal sell. This is another Cramer maxim you’ve probably heard before. His bottom line is that these stocks can’t even be thought about until the next quarter’s earnings are out.

10. Steer clear of any company that reported a earnings miss for at least two quarters. They number can actually be much higher depending on the situation – nine or 10 quarters if need be. The only reason Cramer said two is because he’s never seen a turnaround quicker than that.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

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