To own great stock, you must prepare for the lows: Cramer

• CNBC's Jim Cramer said his goal is to teach investors how to own great stocks, not trade them, adding that investors should expect lows, even with fundamentally good stocks.
• "Trading is way too hard unless maybe you're managing money as a full-time job, and even then, it's not easy," Cramer said. "But if you want to own a terrific stock that can go up 200% in a year, which is what Nvidia's done this year, you must recognize that it can also go down hard during the journey."

Jim Cramer's goal is to teach investors how to own great stocks, not trade them, the CNBC host affirmed Monday.

Software company Nvidia, for example, is one of Cramer's longtime favorites — he even named his late dog after the stock. Last week, Nvidia stock was trending down, but according to Cramer, its long-term potential was worth short-term losses. Although shares of Nvidia plunged nearly 10.2% this month, it closed Monday up a little over 7%. Nvidia's gains have beat every other member of the S&P 500 so far this year.

"Trading is way too hard unless maybe you're managing money as a full-time job, and even then, it's not easy," Cramer said. "But if you want to own a terrific stock that can go up 200% in a year, which is what Nvidia's done this year, you must recognize that it can also go down hard during the journey."

Cramer said he is no longer a hedge fund manager, and so his aim is not to game a company's quarter. To Cramer, a company's long-term outlook and fundamentals matter more than a single quarter. When he sees a stock has had a bad quarter, he said he tries to determine whether the quarter is actually disappointing or if it's merely a speed bump.

He stressed that investors should recognize companies such as Nvidia, like Apple, are "the stock equivalent of a living, breathing organism." Apple, he said, has transformed from a computer company into one that sells phones, watches and other services. Cramer added that Nvidia has gone from a graphics card maker to a company that may be poised to dominate the generative artificial intelligence space.

According to Cramer, investors shouldn't buy Nvidia if they want an instant gain and can't tolerate a short-term loss.

"Given that nobody even comes close to Nvidia in the AI business, I think its stock is a must own," Cramer said. "Now I can't tell you when to buy it, I can't tell you the price to buy it. I'd say you can buy some now and some later at a lower price. Remember, never buy all at once."

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Nvidia.

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