Cramer's 'Mad Money' Recap: Day of Atonement
NEW YORK ( TheStreet) -- You better believe you'll make some mistakes in the market, Jim Cramer told "Mad Money" viewers Wednesday as he kicked off his yearly "Day of Atonement" show to review his biggest mistakes over the past year.Cramer said investors need to learn from their mistakes, which begins by first acknowledging what they were.
There were a lot of things going wrong with the markets this year, Cramer noted. Everything from turmoil in Europe to a slowing China to Washington gridlock and a Federal Reserve that couldn't seem to do anything right to jump-start the U.S. economy.Yet, despite these many negatives, the stock market never quit, which is why Cramer continued all year long to recommend a diversified portfolio of high-yielding dividend stocks with a little gold for good measure.
In the end, Cramer sees the glass as half-full. Europe, he said, will eventually fix its problems and China's economy will eventually regain its momentum. With the Fed keeping bond rates low, dividend stocks remain the only game in town, which is why Cramer said he comes to work every morning.
Cramer's first lesson to investors? Every dog has its day. That was surely the case with First Solar (FSLR) , a company he first advised selling at $138 a share and reiterated selling in the $60s, $50s, $40s, $30s and again in the $20s as the stock continued to decline.
So why then did Cramer not declare victory and move on? Why did he make one final sell recommendation at just $13 a share? Cramer said he simply got greedy and complacent, and the dog finally rose up and bit him. Shortly after his sell recommendation, First Solar caught a big break in the way of stiffer U.S. tariffs, sending its shares higher.
Cramer also explained how he gave up on Darden Restaurants (DRI) on Sept. 6, after the company pre-announced yet another earnings disappointment. He said that he had waited for ages for the company to turn itself around but it never did. So in a fit of non-discipline, he told viewers to swap into Yum Brands (YUM) instead.
Cramer said the mistake was giving up when everyone else did, a move that almost always yields a better time to sell later. He said that Darden paid a bountiful dividend, paying him to wait, which made his rush call to sell at the bottom a big mistake. There's always a better time to sell than when everyone else is selling, he concluded.
Don't Fall in Love
Cramer's next lesson for investors was to never fall in love with a stock, as he did with Chipotle Mexican Grill (CMG.) .