Jim Cramer's Mad Money - Stock Worksheet

Jim Cramer's Mad Money
Watch TV, Get Rich

Jim Cramer Mad Money Stock Worksheet - It's embarrassing to admit, but I really get a kick out of Jim Cramer. While he's totally nuts on his CNBC TV show, Mad Money, he was much saner on his Real Money radio program. Unfortunately, the radio program is no longer on the air, though archives exist. In its place is a very good video on demand program where Cramer is interviewed by a columnist from his own TheStreet.com. Very insightful stuff with a reasonable delivery.

But about Cramer's Stock Worksheet in Jim Cramer's Mad Money: Watch TV, Get Rich. The book is short (less than 230 pages) and perhaps the best part is the Stock Worksheet, which outlines his approach to researching stocks -- or as he likes to refer to it, The Homework.

Jim Cramer's Mad Money Stock Worksheet

Find out how the company makes its money.
1. How did it make its money last year?
2. How did it make money last quarter?
3. Are these high- or low-quality earnings?
What sector does the company belong to, and how has that sector performed?
1. Sector:
2. Sector performance over the last three months:
3. Sector performance over the last six months:
4. Sector performance over the last twelve months:
5. What forces tend to move the stocks in this sector?
How has the stock performed?
1. Last year:
2. Last six months:
3. Last three months:
4. Last month:
5. Last week:
What do the comparisons tell you?
1. Does this company face any threatening competition?
2. What is the P/E of this stock?
3. What is the average P/E of its competitors?
4. What is the PEG rate of this stock?
5. What is the average PEG of its competitors?
6. How much cheaper or more expensive is this stock compared to its peers?
  - Based on P/E:
  - Based on PEG:
Can the stock survive its balance sheet?
1. How much debt does this company have?
2. How much debt does it have due this year?
3. How much free cash flow did the company have last year?
4. How much free cash flow should it have this year according to analyst estimates?
5. Will this company generate enough cash flow to pay its debts this year?
6. Can it pay its debts next year?
7. Will it have to sell assets to pay its debts in near future?
In light of your homework, does this stock look like a good investment?

Steps make more sense when you read the book, but it's an outline. Cramer calls The Jim Cramer's Mad Money: Watch TV, Get Rich a necessary sequel to The Jim Cramer's Real Money: Sane Investing in an Insane World. However, if you mix Cramer's 25 Rules of Investing (from Real Money) with his Mad Money Stock Worksheet (from Mad Money), you'll probably just get a headache...but here it is anyway.

Jim Cramer's 25 Rules of Investing

1. Bulls, bears make money, pigs get slaughtered.
2. It's OK to pay the taxes.
3. Don't buy all at once.
4. Buy damaged stocks, not damaged companies.
5. Diversify to control risk
6. Do your stock homework.
7. No one made a dime by panicking.
8. Buy best-of-breed companies.
9. Defend some stocks, not all.
10. Bad buys won't become takeovers.
11. Don't own too many names.
12. Cash is for winners.
13. No woulda, shoulda couldas.
14. Expect, don't fear corrections.
15. Don't forget bonds.
16. Never subsidize losers with winners.
17. Check hope at the door.
18. Be flexible.
19. When the chiefs retreat, so should you.
20. Giving up on value is a sin.
21. Be a TV critic.
22. Wait 30 days after pre-announcements
23. Beware of Wall Street hype.
24. Explain your picks.
25. There's always a bull market.

Making money in stocks using Jim Cramer's methods is hard work and not without significant risk. But as crazy as he looks on his Real Money program, I don't think his ideas are all that crazy--at least when compared to those peddled by brokerage firms.

The Jim Cramer's Mad Money: Watch TV, Get Rich

The Jim Cramer's Real Money: Sane Investing in an Insane World