One look at the action on Valeant's stock on Tuesday, and now investors understand why Jim Cramer preaches that when the words "accounting irregularity" are associated with a company, that always means sell.
Investors repeatedly assured Cramer that Valeant's cash flow was so strong he didn't have to pay attention to the decline in the stock because it was all emotional. After all, they said, prior to Tuesday it had already fallen so much and it was way overdone.
"Even back when Valeant was a beloved stock, I had always been uncomfortable with their business model of rolling up drug company after drug company, slashing research and development and then raising prices," Cramer said.
Thus Cramer stood by his tried and true rule that any time the question of accounting irregularities arises, investors should sell. It could come at the cost of missing out on benefits at times, but it could also avoid big disasters like Valeant.
"Believe me, you'll always remember my admonition and smile that you avoided a stock that destroyed so many allegedly smart people who should have known better," Cramer said.
CNBC reached out to Valeant for comment, and did not immediately receive a response.