Jim Cramer's investment advice has been the subject of both praise and criticism over the course of his career. And let's face it -- between an appearance as himself in Marvel's groundbreaking "Iron Man" film to the existence of an entire ETF that does the opposite of Cramer's advice, Mr. Mad Money has made a huge imprint on the financial pop culture.
Whether or not you agree with all of his advice, his latest tip is one he calls a "commandment," and it's something he says he learned the hard way.
"Never buy all at once," he insists. "I can't stress it enough do that under any circumstances buy your whole position at once."
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"You should never buy all at once. And you should never sell once," Cramer declares. "Instead, you should stage your buys [and] try to get the best price over time."
"Why?" he asks. "When I first started professionally, I really wanted to prove to everyone just how clever and smart I was[...] So if I felt like buying some Caterpillar (CAT), "[I'd say] 'Okay, I'll buy it now, BIG, all at once[...] Put me up on 50,000 Cat!' I'd scream as if I were the smartest guy in the universe."
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"When I think back about that young Cramer, mostly full head of hair by the way, all I can say is that I was one arrogant son of a gun -- arrogant and wrong," Cramer confesses. "What was my mistake? About 50,000 shares of capital[...] You don't buy all at once, that's pure hubris! What happens if it goes down? You'd feel like a dope -- and it might go down."
When Cramer reflects on what he would do differently today, he says, "I should’ve bought Cat in increments of, say 5,000 shares gradually over time during that day, trying to get the best price I could. You put in a small position and cross your fingers, hope it goes down so you buy more at a lower level to get a better cost basis."
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