Jim Cramer's Method to Picking Stock

Jim Cramer has share the methods that have served him well in his four decades of investing to successfully run a hedge fund.
How Jim Cramer Select Stock

What does he look for when picking a stock?

  • He look for stocks that were trading with the new higher price. These are stocks that hit a new high in trading for the day,  on dull days or down days. If it is trading at a new high on a down day, then it has something good fundamentals.
  • He start doing homework to ensure that the fundamentals of the company are sound good.
  • Jim Cramer usually wait for a pull back before buying a stock. He always tries to buy on weakness and sell into strength. Traders must confident stock price will make a comeback for substantive reasons not having to do with the market.
  • Traders must sure there isn't a reason why everyone is selling the stock and driving the price down. It's Ok as long as the fundamentals haven't changed and a stock just pulled back for mechanical reasons, such as market-wide panic or profit-taking.