Mad Money is about education. Sure, everyone loves a good stock pick, but if that’s all you’re getting from the show you’re missing something. Take a typical segment, for instance, where Cramer talks about a stock he likes and why he thinks it’s a good buy. The reasoning behind the pick is more important than the pick itself.
You have to ask yourself, is Cramer focusing on a sector or a company? If it’s a sector, you might want to look for similar companies that share the same traits. It’s always more important to remember what Cramer says about a sector than an individual stock because 50% of where a stock goes is determined by its sector.
Cramer’s trying to teach a bigger lesson when he singles in on a single stock. Whether he’s focusing on big dividends or secular stocks, the takeaway isn’t the companies he uses to illustrate his point. It’s a lesson about the market in general or at a specific time. When he did a series on what he thought were great private equity takeover targets, he offered up six stocks worth looking at. But what Cramer was really telling you was that PE firms like stocks with big cash flows and operations that it could easily improve by taking the company private.
None of this is to say that you shouldn’t listen to Cramer’s stock picks, which he has total conviction in, but the bottom line is that there’s almost always something more important going on than just “buy this, sell that,” and the bigger lesson is worth focusing on.