In more than three decades of investing, Jim Cramer has learned many tricks of the trade when it comes to analyzing stocks, understanding how they fit in with the larger picture and how to make money.
That is why the "Mad Money" host decided to go over some of the biggest rules in his investing toolbox, so that investors can beat the market consistently, like he did when he ran his hedge fund.
The first rule that Cramer stands by is that bulls and bears make money—hogs get slaughtered.
"It's because I never want to forget that taking a gain is a good thing, and you can't ever kick yourself for making money," Cramer said.
It makes sense that a bull can make money when the market goes up, and it makes sense that a bear can make money when the market moves down. Cramer believes that investors should be able to profit from the downside as much as they do from the upside. But you can get hurt when you get piggish and refuse to take anything off the table after a huge run.
To clarify, Cramer is not saying to sell all stocks and go home. He is saying that it is prudent to take some of it off the table. He recommended that every investor know the price that they are not willing to pay for a stock, and a price that makes them a seller.
"When you are a hog, I actually expect you to be slaughtered," Cramer said. (Tweet This)
So, when the market gets ridiculously expensive and you know that you have a lot of gains—Cramer says this is time to stop being a hog. After all, he doesn't want your head to be on the guillotine when the market turns and those gains turn into losses.