Sell Block

Cramer’s a believer that you learn more from mistakes than successes. Sure, he could sit back and gloat about his good calls, like General Cable and Hansen Medical, which have both seen great profits. He could brag about Mastercard , Chipotle and Buffalo Wild Wings, which are up 20%, 21% and 12%, respectively, in less than a week. There’s also Avon and Qwest, and then Charter, which is up 19% since he gave it the nod back on April 10. And Cummins has leapt 24 points since Cramer made his call on it. But that wouldn’t help Home Gamers very much.

So he wanted to focus on the losses, those humiliating mistakes that end up making you a better investor. First up is Vulcan Materials. Cramer liked this stock at $67 and rode it all the way to $128, where he said he’d buy more. Big mistake: Homebuilding is falling apart, and the company missed its quarter, despite Cramer’s prediction that it would hit the numbers. The lesson learned here is to take profits when you’re up that much and the fundamentals aren’t as good as when you first liked the stock.

Cramer also took a hit from Procter & Gamble. Blue-chip stocks just don’t exist anymore, he says, and PG’s underperformance since it bought Gillette keeps hurting the company. Cramer thought PG had stalled enough last Friday, April 27, but it hadn’t.

He got Allergan wrong, too. The maker of Botox had run too much, and he was blindsided by Medicis, whose competitor product Perlane was approved that day after Allergan reported. Cramer still likes the stock, but he’s embarrassed he ignored one of his own golden rules: Don’t forget the competitors.

Medco missed this week. Well, it hit the numbers for its report, but came out with cautious guidance that hurt the stock. Besides, Cramer says, the stock had already had a good run, and you don’t make a recommendation after that happens.

You might remember Cramer telling Home Gamers to trade around the Charter quarter – sell before, buy after – but the stock went up after the report came out. Both the Cablevision buyout and great numbers from Time Warner came as a surprise. When it comes to winners like Charter, maybe it’s best to stick with them, he says.

Finally, Cramer got hurt by Anderson, Estee Lauder and Celgene. ANDE was a momentum name that just didn’t get the guidance it needed. Este Lauder was an international play, but there were too many problems here in the U.S. CELG has Cramer completely baffled. That’s why he asked President Bob Hugin to call in for today’s show.

Bottom Line: Celebrate your wins, but learn from your losses. Cramer had a lot of both in last week’s Game Plan, more upside than downside probably, but the mistakes are the ones you learn from.

Questions? Comments?