When Cramer first graduated college, he worked as a reporter covering sports and government in Tallahassee, Florida, where he made $153 a week. And while he didn't have a lot of money to spare, he did find a way to save in his IRA and began to buy individual stocks for a personal account.
"I was going to do it the right way, by researching stocks and getting an edge through that research," Cramer said.
After losing money on a few investments, Cramer decided to go to the library and research companies. Eventually, he found a company called Natomas, which had just discovered a large find in Indonesia. He took $300 and bought the stock, and it quickly caught a takeover bid.
Cramer realized from his investment in Natomas that by doing the homework, it gave him an edge over others and helped to arm him with the proper knowledge about a stock. He was hooked on stocks and never turned back. Eventually, Cramer made enough money to pay for his first year of law school when he decided to become an attorney.
Read MoreCramer: How stocks paid for me to go to college
And when Cramer decided to leave Goldman Sachs after four years and open his own hedge fund, the first stock that he bought was Heinz. Why? Because he liked to own a stock that represented a call on great management that could deliver earnings through thick and thin.
What he didn't count on were the performance demands of a hedge fund manager. He quickly learned that just buying a stock because it was terrific didn't matter to the fund, and those long-term investments did not produce daily performance.
"Heinz was a staple with a good dividend and what I didn't understand at the time was when the economy heats up people dump these kinds of stocks for something more cyclical," Cramer said.
But here was the problem—this rotation game is not one that investors can play at home without being a full-time professional. And eventually when the market got too hot, it crashed and all of the cyclical plays were decimated.
But guess what? Heinz snapped right back. That is what happens to best-of-breed well-managed companies