Tonight, Cramer’s covered a number of different parts of the show, from the longer segments focusing on one stock or sector to the Lighting Round. But what about Am I Diversified?, Sell Block and speculation Friday?
These were created specifically for the needs of Home Gamers, Cramer says. Am I Diversified? isn’t just a cautionary game about defensive stock-picking, it’s a chance for Cramer to evaluate an entire portfolio. Mad Money’s viewers are smart enough to know what diversification is, so he wanted to take it to the next level by helping callers switch out second-tier stocks in their portfolios for best-of-breed stocks.
Speculation takes place on Friday to give Home Gamers the weekend to consider the information Cramer has given them. He thinks this is the most responsible way to highlight the most volatile companies he’ll cover on Mad Money because it forces potential investors think about the trade and it keeps the stock’s price from spiking before responsible speculators get a chance to get in.
The Sell Block is devoted to two separate but related things: holding Cramer accountable, and just focusing on when to sell. Accountability doesn’t need explaining, but the selling part probably does, especially because it’s such a subjective thing. Just like any other Mad Money segment, Sell Block is not where you get your marching orders. A stock that gets Cramer’s sell call, doesn’t mean you empty out your holdings immediately. Actually, you should almost never do that, he says. Most of the time, his recommendation is to slowly sell off your position in a stock. And there’s the chance that you might believe in a company you’ve bought shares of and don’t think Cramer is right in wanting viewers to sell. If that’s the case, by all means, stay in there, he says.
Finally, the Game Plan. The Game Plan is something Cramer does every Friday in anticipation of the week ahead, and it's entirely about short-term trades. It is the one part of the show that's devoted to short-term, rather than long-term. Maybe Cramer’s been labeled a trader and Mad Money a trading show, but he says that he only goes into the business of short-term, catalyst-based trading once a week, on Friday's, as a kind of candy to go along with speculation Friday, and everything else belongs squarely in the investing column.
Bottom Line: Use Am I Diversified? to get a better sense of what makes a strong portfolio, Cramer says. Speculation Friday is there to encourage you to do homework on speculative picks, and the sell block is for guidance on selling, for the thought process and for caution – it’s not the Ten Commandments. If you want short-term trades, then the Game Plan is the one part of Mad Money that belongs to you.