Why You Should Speculate on Stocks

Cramer’s Speculation Friday picks over the past five and a half months have beaten the important benchmarks, he told viewers today, even during a period when “the market shot the lights out.”

The top performers? Advanced Micro Devices , 3Com and Starent Networks , which are up 164%, 52% and 80%, respectively.

Cramer first blessed AMD on Nov. 14, 2008, and then again on May 19 of this year. The stock shot up on Thursday after news hit the wires that Intel would be paying AMD $1.25 billion as part of an antitrust settlement. Investors who followed Cramer’s advice from the start earned triple-digit returns.

The Mad Money host gave a nod to 3Com, a networking-equipment company, back on Sept. 25. Then just this week Hewlett-Packard scooped up the company, sending COMS shares flying 31% in one day.

Lastly, there’s Starent Networks, which Cramer recommended in May. On Oct. 13, Cisco Systems announced it was buying the company, delivering an 80% gain to anyone who bought STAR last spring.

What’s the takeaway?

“It pays to take a chance on broken stocks,” Cramer said, “as long as the companies behind them are intact.”

That’s the essence of speculation, and he recommended that every investor give it a try.

As long as they do the homework first.

Crame's charitable trust owns Cisco Systems.

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  • Jim Cramer

    Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

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