CNBC's Jim Cramer always tells investors to buy shares in best-of-breed companies, even if that means paying more for their stocks.
For the "Mad Money" host, it's a matter of discipline: the best-run companies with the best prospects can help shelter investors' portfolios and minimize their losses.
"Why is owning best of breed even a question?" Cramer asked. "When you're shopping for a car, you buy best of breed — or the best you can afford. It's not even an issue. We pay up for the highest quality brand because we know that a brand, a good brand, signifies reliability."
"The idea that you would purposefully try to buy a worst-of-breed car is downright crazy," he continued. "Nobody says, 'I'll take the one without the airbags, it's cheaper.'"
Cramer argued that the same concept should be applied to stocks. Investors tend to go after low-quality stocks because they see them as bargains, but that's more likely to result in losses than in gains, he said.