A PLUME BOOK JIM CRAMER’S GET RICH CAREFULLY JAMES J. CRAMER is host of CNBC’s Mad Money w/ Jim Cramer and cohost of Squawk on the Street. He serves on TheStreet, Inc.’s board of directors, is a columnist and contributor for TheStreet’s Real Money and Action Alerts PLUS, and participates in various video segments for TheStreet TV. Cramer is the author of six books, including Confessions of a Street Addict and Jim Cramer’s Mad Money. Praise for Jim Cramer’s Get Rich Carefully “In highly accessible language, Cramer explains how the stock market is influenced by economic data, Fed policy, world events, the actions of hedge funds, and the trend toward sector funds even when the underlying fundamentals of a stock remain stable. Drawing on his long experience, both mistakes and successes, Cramer demystifies the stock market and offers sound investing advice and an insightful overview of the market for cautious investors.” —Booklist “Look to this book for guiding principles rather than specific stock tips. . . . Forget about getting rich quick: The new investment climate, writes Mad Money host Cramer, is ‘treacherous. . . . [B]izarre stock movements have become the staple, if not the hallmark, of this era.’ Cramer, formerly known for his exuberant approach . . . has since taken a visibly more deliberate approach to the matter. This new book reflects his caution. . . . Cramer’s long list of dos and don’ts (‘Relative valuations don’t justify a purchase’; ‘Stop falling in love with your stocks’) is worth the price of the book.” —Kirkus Reviews “Jim is a whirlwind, a true force of nature. He embodies not only the strongest work ethic extant (something Omega Advisors’ Lee Cooperman taught me is at the epicenter of investment success), but in my decades in the investment business I know of no other person that possesses the breadth of knowledge about individual stocks. He is a reservoir of information. . . . And that is why Jim Cramer’s Get Rich Carefully . . . is a must-read. . . . My advice? Run, don’t walk, to read Jim Cramer’s Get Rich Carefully. Booyah!” —Doug Kass, TheStreet.com “Who wouldn’t want to ‘Get Rich Carefully,’ as the title of Jim Cramer’s new book promises? The stock market may seem scary, but Cramer says you can make money with research, logic, and prudence. . . . Whether Cramer’s advice will make you a boatload of money or not, his rational explanations make stocks seem less intimidating.” —Jessica Gresko, Associated Press “Careful isn’t the word that usually comes to mind when investors think of Jim Cramer . . . [b]ut Cramer says his show has changed, and his newest book reflects this epiphany.” —USA Today

ALSO BY JAMES J. CRAMER Jim Cramer’s Getting Back to Even Jim Cramer’s Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer) Jim Cramer’s Mad Money: Watch TV, Get Rich Jim Cramer’s Real Money: Sane Investing in an Insane World Confessions of a Street Addict You Got Screwed: Why Wall Street Tanked and How You Can Prosper

As I put this book to bed, I know we are in for still another year during which Washington will provide no rest for the weary. This book is about getting rich carefully; Washington is writing a serial novel about bankrupting us slowly. We would have loved to think that after the bitter conclusion of the October 2013 debt ceiling fracas we could at last invest without endless daily intrusions from politicians, many of whom don’t know the difference between a stock and a bond. But let’s be realistic. Politics has sewn its way into the very fabric of our daily lives, in large part because our nation has spent beyond its means (and yet seems to have so little to show for it). The fabric’s going to choke us several times a year now if we aren’t mindful of how harmful politicians of both parties have become to our portfolios. As you will see in this book, I don’t think it’s for me to opine on what Washington should or shouldn’t do about debt ceilings, tax rates or budget appropriations. I don’t care if you are a Tea Party member or a tax-and-spend liberal. I care about making you money. I am focused on the savings side of your ledger. Given that Washington’s going to be wrangling about matters that directly impact your portfolio for years to come, let me share some tips gleaned from what has worked each time these hideous interchanges have occurred so that you can survive—and possibly even thrive—through the partisan pulverizing that Washington is now guaranteed to do to your savings. Within the last three years, our stock market has had four separate run-ins with politics that caused you to lose a lot of money: the 2011 federal budget bust, which led to a ratings agency debt downgrade; the 2012 fiscal cliff debacle, with its concomitant tax increases; the spring 2013 failure to avoid the federal sequester; and, finally, the pointless fall 2013 government shutdown and debt ceiling clash. All four battles curtailed business, eroded confidence, and hurt your pocketbook. Even if this litany of pain can’t be broken, is there any way to profit from it? The short answer is yes. Each Washington tussle has the same familiar pattern. All four bitter budget contests were basically scheduled events, meaning that you could tell that they were about to occur because they were provoked by deadlines that were clearly visible to all. In each case, approximately one month before each deadline, you began to hear chatter, typically from political commentators (not businesspeople), that Republicans and Democrats might be at loggerheads over some sort of budget issue or tax resolution that had to be agreed upon or the government would cease to function. Soon after, you got pleas from various money managers, who assured you there was no need to worry about the upcoming turmoil; all you needed to do was “stay the course,” because it’s just politics and every time we get one of these political dramas, the action may become twisted and tortured but all will work out in the end. While, ultimately, these “cooler heads” are right that we haven’t defaulted yet and most likely won’t, their “stay the course” admonition only makes sense if you are willing to experience heavy losses—realized or unrealized—and then hope to recoup those losses once the issues are resolved. That is not now nor has it ever been my style. I say if you can dodge big declines and get back into the market at lower levels, you should do so, at least with some of your money, and not just sit there and take an undeserved beating. But here’s the trick. You must take aggressive action and do some selling the moment you hear these false reassurances and not one second later. You cannot afford to wait. Here’s why: In all four of these go-rounds, the stock market lost on average about 8 percent from the moment a potential skirmish began to be talked about—usually one month before the drop-dead deadline that’s supposed to trigger a default or a downgrade—to when the war was finally concluded. Given this consistent peak-to-trough decline, you would be nuts not to do some selling the instant you hear the words “looming” and “Washington” in the same sentence. You have to overcome the complacency bred by smug money managers who blithely assure you with Shakespearean wisdom that All’s Well that Ends Well. That’s because when you hear their soothing entreaties, you are at the exquisite moment at which you can still take action to preserve some of your hard-earned dollars before that coming 8 percent plunge. Then and there, you need to trim whatever stock portion of your portfolio you can trade, be it an IRA, 401k, discretionary, or whatever; it doesn’t matter. Try to sell at least 10 percent of your holdings before the alarm bells go off, because that’s probably the last moment at which you will get prices that are high enough and worthwhile enough to exit whole. You can take that newfound cash and put it safely on the sidelines, readying it for the inevitable and brutal denouement that all of these phony reassurers didn’t see coming during the downgrade debacle, the fiscal cliff, the sequester and the debt ceiling rows. Similarly, if you are about to make your regular contribution to one of those retirement accounts, try to hold off and wait for the ensuing stock decline. Having that money taken “off the table” so as to be ready for the inevitable buy point is akin to saving up for a sale at the mall. You need to have cash at the ready to take advantage of the bargains Washington’s about to give you. Then I want you to be prepared to buy several of the stocks that I recommend here, which I believe will hold up under any politically engendered onslaught; they have catalysts that will not be stopped by the shenanigans in the Capitol. You have to pull the trigger at the point of maximum fear, because these are the kinds of stocks that rarely get clocked except in a sell-off that’s extraneous to the performance of their underlying companies. Now, how will you know when to begin to reinsert your money into the market? Easy: A few weeks after the exquisite sell moment, as the market has begun to plummet, you are going to hear FROM THE VERY SAME PEOPLE WHO TOLD YOU NOT TO WORRY that, oops, the divisions in Washington are far more serious than they’d thought, maybe even worse than the last dispute. They will suggest that perhaps it is time to start selling some stocks in preparation for the “coming” decline even though the market’s already been rolling over for days now. Sadly, for those who don’t understand the rhythm of these events, it will then already be too late to take defensive action. In fact, when the “stay-the-coursers” change their tune and tell you that it is prudent to raise some cash, that’s precisely when you must begin to reapply your sidelined money into the best-of-breed names that are described in this book. As we get closer and closer to each fated deadline, it pays to get more aggressive with that sidelined cash. However, do not wait until the last day to do your buying because history shows that some traders will get wind of a settlement ahead of others. You snooze until that last hour, you lose; the best opportunity will have come and gone. Now I know that this is an intense way to approach these moments. You can argue that you don’t need to avail yourself of these sell-offs, but as you will soon see, if you want to get rich, carefully, it’s precisely these kinds of declines that can make a big difference in doing so over the long-term. You are about to read about plenty of other, easier ways to make money, but you now know what’s worked before and what I believe can work the next time a divided, dysfunctional government raids your nest egg. October 2013

As I put this book to bed, I know we are in for still another year during which Washington will provide no rest for the weary. This book is about getting rich carefully; Washington is writing a serial novel about bankrupting us slowly. We would have loved to think that after the bitter conclusion of the October 2013 debt ceiling fracas we could at last invest without endless daily intrusions from politicians, many of whom don’t know the difference between a stock and a bond. But let’s be realistic. Politics has sewn its way into the very fabric of our daily lives, in large part because our nation has spent beyond its means (and yet seems to have so little to show for it). The fabric’s going to choke us several times a year now if we aren’t mindful of how harmful politicians of both parties have become to our portfolios. As you will see in this book, I don’t think it’s for me to opine on what Washington should or shouldn’t do about debt ceilings, tax rates or budget appropriations. I don’t care if you are a Tea Party member or a tax-and-spend liberal. I care about making you money. I am focused on the savings side of your ledger. Given that Washington’s going to be wrangling about matters that directly impact your portfolio for years to come, let me share some tips gleaned from what has worked each time these hideous interchanges have occurred so that you can survive—and possibly even thrive—through the partisan pulverizing that Washington is now guaranteed to do to your savings. Within the last three years, our stock market has had four separate run-ins with politics that caused you to lose a lot of money: the 2011 federal budget bust, which led to a ratings agency debt downgrade; the 2012 fiscal cliff debacle, with its concomitant tax increases; the spring 2013 failure to avoid the federal sequester; and, finally, the pointless fall 2013 government shutdown and debt ceiling clash. All four battles curtailed business, eroded confidence, and hurt your pocketbook. Even if this litany of pain can’t be broken, is there any way to profit from it? The short answer is yes. Each Washington tussle has the same familiar pattern. All four bitter budget contests were basically scheduled events, meaning that you could tell that they were about to occur because they were provoked by deadlines that were clearly visible to all. In each case, approximately one month before each deadline, you began to hear chatter, typically from political commentators (not businesspeople), that Republicans and Democrats might be at loggerheads over some sort of budget issue or tax resolution that had to be agreed upon or the government would cease to function. Soon after, you got pleas from various money managers, who assured you there was no need to worry about the upcoming turmoil; all you needed to do was “stay the course,” because it’s just politics and every time we get one of these political dramas, the action may become twisted and tortured but all will work out in the end. While, ultimately, these “cooler heads” are right that we haven’t defaulted yet and most likely won’t, their “stay the course” admonition only makes sense if you are willing to experience heavy losses—realized or unrealized—and then hope to recoup those losses once the issues are resolved. That is not now nor has it ever been my style. I say if you can dodge big declines and get back into the market at lower levels, you should do so, at least with some of your money, and not just sit there and take an undeserved beating. But here’s the trick. You must take aggressive action and do some selling the moment you hear these false reassurances and not one second later. You cannot afford to wait. Here’s why: In all four of these go-rounds, the stock market lost on average about 8 percent from the moment a potential skirmish began to be talked about—usually one month before the drop-dead deadline that’s supposed to trigger a default or a downgrade—to when the war was finally concluded. Given this consistent peak-to-trough decline, you would be nuts not to do some selling the instant you hear the words “looming” and “Washington” in the same sentence. You have to overcome the complacency bred by smug money managers who blithely assure you with Shakespearean wisdom that All’s Well that Ends Well. That’s because when you hear their soothing entreaties, you are at the exquisite moment at which you can still take action to preserve some of your hard-earned dollars before that coming 8 percent plunge. Then and there, you need to trim whatever stock portion of your portfolio you can trade, be it an IRA, 401k, discretionary, or whatever; it doesn’t matter. Try to sell at least 10 percent of your holdings before the alarm bells go off, because that’s probably the last moment at which you will get prices that are high enough and worthwhile enough to exit whole. You can take that newfound cash and put it safely on the sidelines, readying it for the inevitable and brutal denouement that all of these phony reassurers didn’t see coming during the downgrade debacle, the fiscal cliff, the sequester and the debt ceiling rows. Similarly, if you are about to make your regular contribution to one of those retirement accounts, try to hold off and wait for the ensuing stock decline. Having that money taken “off the table” so as to be ready for the inevitable buy point is akin to saving up for a sale at the mall. You need to have cash at the ready to take advantage of the bargains Washington’s about to give you. Then I want you to be prepared to buy several of the stocks that I recommend here, which I believe will hold up under any politically engendered onslaught; they have catalysts that will not be stopped by the shenanigans in the Capitol. You have to pull the trigger at the point of maximum fear, because these are the kinds of stocks that rarely get clocked except in a sell-off that’s extraneous to the performance of their underlying companies. Now, how will you know when to begin to reinsert your money into the market? Easy: A few weeks after the exquisite sell moment, as the market has begun to plummet, you are going to hear FROM THE VERY SAME PEOPLE WHO TOLD YOU NOT TO WORRY that, oops, the divisions in Washington are far more serious than they’d thought, maybe even worse than the last dispute. They will suggest that perhaps it is time to start selling some stocks in preparation for the “coming” decline even though the market’s already been rolling over for days now. Sadly, for those who don’t understand the rhythm of these events, it will then already be too late to take defensive action. In fact, when the “stay-the-coursers” change their tune and tell you that it is prudent to raise some cash, that’s precisely when you must begin to reapply your sidelined money into the best-of-breed names that are described in this book. As we get closer and closer to each fated deadline, it pays to get more aggressive with that sidelined cash. However, do not wait until the last day to do your buying because history shows that some traders will get wind of a settlement ahead of others. You snooze until that last hour, you lose; the best opportunity will have come and gone. Now I know that this is an intense way to approach these moments. You can argue that you don’t need to avail yourself of these sell-offs, but as you will soon see, if you want to get rich, carefully, it’s precisely these kinds of declines that can make a big difference in doing so over the long-term. You are about to read about plenty of other, easier ways to make money, but you now know what’s worked before and what I believe can work the next time a divided, dysfunctional government raids your nest egg. October 2013

How does something so fascinating, so enjoyable and, yes, most important, so lucrative, keep losing the hearts, minds and wallets of the American people? Every day when I come to work on Wall Street I now ponder the question of how Americans have turned so decidedly against investing in stocks. As I make my way through downtown Manhattan each morning, traversing the canyons that used to teem with eager young associates and stentorian partners excited for the ringing of the opening bell, I now marvel at the neighborhood’s symbolic neglect and emptiness. In the thirty years I’ve toiled in the financial district, I have seen it transformed from the pulsating engine of corporate progress to an ossified antique, a museum of what capitalism used to look like, with the bustling bespoke professionals supplanted by frazzled tour guides, arms extended in the air, bearing different colored umbrellas to be sure their flocks don’t stray down some blind alley filled with empty offices that still bear signs of long-ago forgotten or deceased stock broking firms. Yet at the exact same time Wall Street’s star has dimmed both metaphorically and in reality, the profits left for those stalwarts who have managed to hang on have been nothing short of spectacular, among the greatest ever recorded. Interest dwindles even as takeovers and acquisitions, those instant wealth creators, occur with a velocity and magnitude that would have been undreamed of just a few years ago. People avoid the mention of stocks even as we have blown through all sorts of levels of the Dow Jones Average that would have been unthinkable six years ago, when the market had lost half its value and companies were bleeding from their eyeballs. Few even seem to care that we are getting back to those vaunted NASDAQ prices of the turn of this century, except this time the technology stocks that dominate that index represent good values. They aren’t about to explode in your faces like the Internet dot bombs did so hideously in 2000 and 2001. In fact, they could be in the midst of a sustained run. Yet, sadly, these growth stocks, both young and old, seem to beckon no one but the most intrepid of investors. So what’s happened? What can explain why fewer and fewer people seem to partake of the tantalizing and realized possibilities of tremendous wealth at our fingertips and right before our eyes? How did the souring continue despite the historic runs so many stocks have enjoyed? It’s not an easily answered question. In truth, many issues weigh on the minds of potential stock investors and they’ve only grown more weary, not less, as the averages power higher, and the winnings are distributed to fewer and fewer takers. In the old days when we took out big round numbers, Dow 9,000, Dow 10,000, Dow 11,000 and the like, the gains intrigued, enticed, and seduced. Now, sadly and shockingly, they seem to repel people and create new levels of trepidation with every breached benchmark. “Oh we missed it all, Cramer” is the sentiment I hear from passersby and see on Twitter @JimCramer. Before I give you the litany and refutation of unfounded fears that keep so many from snatching the riches stocks create, let me reassure you that the themes, ideas, disciplines and concepts embraced in this book will allow you to triumph over any of the objections that I hear so frequently. If anything, the opportunities since Get Rich Carefully first rolled off the presses have gotten only more bountiful, the themes more pronounced, the profits from exploiting them even larger than I had imagined when I was first committing them to paper. And, of course, I don’t share in the increasing hostility toward making money through stocks after they have already had some strong gains, provided the fundamentals of the companies underneath them continue to improve. I know better and will show you, empirically, why my methods will allow you to triumph over the critics’ castigations that stocks are too expensive and risky and that the entire asset class is tainted and illegitimate. First, though, let me address the considerable brief against equities and tell you why I think the criticisms fail to measure up under close scrutiny. The most important indictment smearing Wall Street is that it’s rigged, and rigged against you, the little guy, in favor of some nameless wealthy people who collude and pull the strings of stocks like they are so many marionettes on a stage of corrupt illusion. We recently heard a prominent and charming author, Michael Lewis, begin his book tour for Flash Boys with the rigging siren, a damning critique made pretty much everywhere he visited, often greeted with knowing nods, as if, somehow, after all of the indictments and scams and flash crashes and bank penalties, how could it not be rigged. Let me give you a reality check: there’s nothing rigged about Procter & Gamble or 3M; there’s nothing phony about Boeing and Intel, nothing corrupt about Google or Starbucks. Yet when we say “the market,” we are really talking about a supermarket that contains pieces of paper that are backed up by the real profits and predicted profits of these enterprises and thousands more honest companies just like them. At times are the prices of their stocks ever so minutely impacted by the machinations of the so-called “big boys” Lewis derides? Yes, they certainly are, and I am sure that each of us has had, at one time or another, a few insignificant pennies taken by them when we took our profits off the table. I don’t care for the high-frequency traders, and I cite them as a reason for the lack of faith in this market, throughout many a chapter. But I care more about the psychological impact of the charge that they are rigging the overall markets even more than I dislike their financial avarice and how it can impact your bottom line. I think the jeremiads of one author have once again scared people and frightened them back to the sidelines to where opportunity is nil. That’s costly and it is wrong. In the long run, their high-frequency trades won’t amount to a hill of beans for you if you pick the right stocks and hold them to ever superior gains. High-frequency traders do have an unfair millisecond or two edge in trading. I don’t think anyone should be allowed to have even that kind of small advantage over anyone else in the financial markets. I have always favored a leveled playing field with equal access to the best prices, something that, because of the prevalence of high-frequency trading, is decidedly not the case right now. The government should change the rules so no one can speedily front run your orders or the orders of the mutual funds you may be investing in. Still, though, remember that the impact on your sliver of a mutual fund that is gaffed by these traders is infinitesimal and certainly no reason to avoid investing in stocks. Far more important than the pennies they clip are the dollars I want you to make with some of the long-term investments I suggest here. I know from this book and others I have written, as well as from my television shows, Squawk on the Street and Mad Money on CNBC, and my on-line blog in thestreet.com, that money can and is made fairly and squarely every single day that the stock market’s open. We don’t need to fret about making two cents less on a gigantic takeover bid. We can’t really care if a nickel is scalped out of the hundreds of dollars that the tremendous themes described within have made us. That’s just plain foolishness, brought on by scare tactics of an author to make a profit not by helping you but at your expense because the rigging charge keeps you in the shackles of alternatives like cash and bonds that yield next to nothing. If you think that the New York Stock Exchange is corrupt at its core, you will most likely hide your money in a .5 percent certificate of deposit, if not under the mattress. I think that’s nuts. No high-frequency trader is going to keep you from earning a dividend on the average stock in the market that’s four times that (and five times if you include the big tax breaks stocks give you). No flash boy shenanigans should keep you from making money over the long term with the terrific investible ideas I suggest and detail here. The second obstacle keeping people from earning great wealth in the stock market? The impressions left by the judicial system that the big banks have wrecked finance with their greed. When you see billions and billions of dollars being paid into the Justice Department’s coffers because of a legacy of financial destruction, you don’t want to go near Wall Street and the wares these banks sell. Now it is true, beyond any reasonable protest, that there weren’t just a few rotten apples in the barrels of banking during the past decade; many of the barrels were despoiled beyond belief. But the crooks in the temples of finance were manipulating mortgages and bonds packaged full of mortgages, not the prices of stocks or the companies underneath them. They attacked the fixed income portion of the stock market that I am not much a fan of, in order to fool large pension, hedge and mutual funds into trying to pick up a little extra yield off of baskets of phony, undocumented, loser loans. Even as I think that game’s been cleaned up by the prosecutors, lawmakers and regulators, I want you still to have nothing to do with these fancy instruments, especially if they somehow make a reappearance. They were and are always high risk–low reward alternatives to stocks. We want our stakes to be in the Googles and the Celgenes, not pieces of junk still shamelessly being marketed by slick bond salespeople. Nor am I worried that the remaining banks can bring the whole system down, stocks included, with them if they fail. We have now put enough years between us and the great recession to know that our remaining financial institutions are indeed rock solid, actual models to the rest of the world of what solvency really means. Say what you want about the regulators, particularly former treasury secretary Timothy Geithner, but they forced our banks to raise hundreds of billions of dollars in cash—so much cash that they are no longer a valid reason to stay away from stocks because one bank’s problems won’t knock down the rest of them anymore. Sure, I wish our prisons were overcrowded with bankers who ripped us all off. That would be sweeter justice than having the current iteration of banking execs writing big checks of shareholders’ money to the treasury even as they award themselves obscene raises and bonuses. Yep, those big fines don’t come out of the offenders’ pockets; they come out of the profits that belong to those who own the company’s shares. That’s just wrong; but they call it justice. The third rap against the one aisle of the financial supermarket that can be so rewarding? The charge that stock prices are being manipulated upward by the Federal Reserve. Once the Fed is done trying to boost the economy and stocks through low rates, this thesis goes, it will have to raise rates quickly to combat the inflation its foolish bond-buying program has caused. Now, let’s forget for a moment that we’ve heard this bogus entreaty for more than 8,000 Dow Jones points. Let’s ignore that the Cassandras making this charge, so wrong for so long, are almost never called out for costing you the tremendous opportunity to profit from this magnificent bull market. The simple fact is that while rates have been trending higher, it’s meant very little to the stock market. Moreover, the moves of the Federal Reserve, once so important to a very ailing economy, have actually ceased having much of an impact at all on bonds or stocks. No, the Fed and its new chief, Janet Yellen—more on her a moment—aren’t entirely irrelevant. If the Fed were to decide that inflation was raging out of control and it had to take short-term interest rates through the roof, we’d have to rethink some, but not all, of our game plans. However, the opposite has happened. We have already begun what is turning out to be a smooth and orderly departure from dramatic intervention in the markets by the Fed. All of that hand-wringing was, indeed, pretty much for nothing, not that anyone will apologize for scaring the bejesus out of you. Despite the endless screeds from some often very politically motivated commentators masquerading as honest brokers, it turns out that the policy makers were very good at their jobs. Finally, the legitimate question of valuation must be addressed. Have we missed the whole run? Isn’t it way too late? Yes, it is true that stock prices are higher than when I first outlined how to Get Rich Carefully, some meaningfully higher. But you know what? The profits that back up those stock prices have been even more bountiful than I thought. The dividends that are returned to shareholders have grown at a faster pace than I, a bull, ever imagined. The competition for your dollars, meanwhile, has either gotten way too expensive pretty much overnight, as is the case of real estate, or, in the case of all sorts of bonds, has stayed ridiculously unrewarding with a great deal of risk. In fact, I could argue that stocks are even cheaper versus these other asset classes than when the hardcover edition of Get Rich Carefully first came out in 2013. Stocks, even at these heights, remain the only investable game in town. Given the improving economic backdrop and the much more lucrative earnings streams our companies are pumping out, I could easily argue that stocks remain terrific buys, and when they are placed on sale en masse, for whatever reason, should be purchased with alacrity. Now that you see why I believe the case against stocks doesn’t hold water, let me give you some additional themes that make stocks even more attractive since Get Rich Carefully was first published. The year since the book came off the presses has produced ten new, lucrative trends that provide a positive undercurrent and make the arguments for stock investing here even more worthwhile. These are ten briefs for the market that are not being factored in correctly by most investors today. They are in their infancy and by next year will be acceptable as gospel and people will be kicking themselves thinking, “Why didn’t I realize the game had changed so positively in the favor of the buyers, not the sellers?” First: shareholder activism. It wasn’t that long ago that shareholders who didn’t like the direction a company might be following simply dumped the stock in disgust. However, in the past decade, many successful hedge fund managers have been able to amass billions upon billions of dollars in capital. These investors with pools of capital much bigger than many companies themselves no longer turn tail when they don’t like what’s happening. Many dig in their heels and press for change. The result has been, in just an amazingly short year’s time, a revolution in activism. No company, large or small, is immune. Carl Icahn, one of the oldest activists going, took a multibillion-dollar position in Apple, the world’s largest company, and through a series of Tweets, no less, helped compel the company to embark on the biggest stock buyback and dividend boost ever. The result? The stock added tens of billions of dollars in value and became, once again, after a prolonged decline, one of the best, most pro-shareholder stocks to own. It’s a turnabout put squarely at the feet of activism. Activism had a hand in the sudden departure of Microsoft CEO Steve Ballmer, even as he was the biggest shareholder in the company. That stunning turnabout occurred in part because the company invited the representative of an activist, Value Act, to the board, who immediately pushed for value-creating changes. Both results would have been unthinkable a few years back, when huge companies’ managements routinely told disgruntled shareholders to take a hike. These ultra-rich activists can buy so much stock now that they can’t be ignored—and get seats on the boards of directors where they can make great things happen for you. The change is even more pronounced among companies, unlike Apple and Microsoft, that are small enough to be taken over or forced to be sold. Consider Allergan. Here’s a fantastic drug company that more than doubled in less than a year’s time because a wealthy hedge fund activist, Bill Ackman, teamed up with a public company, Valeant, to orchestrate a hostile takeover of the drug giant. Until Ackman’s bold move, no hedge fund had ever collaborated with a potential acquirer to take a run at any enterprise. I now believe there are so many hungry hedge fund managers out there that it will quickly become the template, giving you another way to profit from mergers and acquisitions. Activists have also taken advantage of newfound willingness of boards of directors to entertain ideas for value creation even if current management tries to fight them. Management of Timken, a maker of specialty steels, resisted an attempt by activist Relational Investors to split the company into a steel maker and a proprietary ball bearings and service company. The board of directors hired Goldman Sachs to analyze the alternative proposed by Relational and ended up siding with the activist—resulting in dramatic gains when the company divided into two terrific, separate, publicly traded companies. I think, in the traditional fashion I outline later in these pages, both pieces of Timken, plain old Timken and Timken Steel, will continue to make you money as they grow more focused and receive sponsorship from Wall Street analysts. Activism’s become a major part of the firmament starting in 2014 and, judging by its success, that activist spur to higher prices could continue for years to come. Second: inversion. The United States has a very punitive, sky-high corporate tax rate that is dramatically more draconian than just about every country out there. However, recently, U.S. companies have been using a loophole in the tax code to change their tax regimes, quickly boosting profits for those who take advantage of it. All an American company has to do is merge with a foreign entity where the resulting company would have more than 20 percent of its shareholders residing overseas. So companies as diverse as Medtronic in the medical device sector and Abbvie, in pharmaceuticals, among so many others, have cheated the U.S. tax man with the remaining profits falling right to shareholders. Both targets and acquirers have jumped on the announcement of each deal. I know it seems ridiculous that our country’s policymakers allow this flimflam that permits billions of dollars in tax avoidance and hurts U.S. job creation all in the name of higher earnings per share. But my talks with administration members, including Treasury Secretary Jack Lew, have led me to believe that there is little likelihood that the loophole will be changed anytime soon, because the Republicans are demanding comprehensive tax reform and are unwilling to work on fixing this one portion of the code by itself. That means much more opportunity for buyers of shares of companies seeking to invert their taxes. Third major change? The collapse in bond yields in Europe. As recently as two years ago, the principal worry among many investors was a possible collapse of a major Western country, with smaller nations like Greece, Portugal, Ireland and even larger sovereign states like Italy and Spain facing the possibility of default. But an aggressive European Central Bank, trying to save the system and restart hiring, pumped in massive liquidity injections, causing the value of these countries’ bonds to soar and yields to fall dramatically. The yields have gotten so low that in many cases they are now below the yields of U.S. bonds, even as they are nowhere near as safe as our country’s debt. The result? Europeans are fleeing their markets, both stocks but most particularly bonds, for the United States. Those fund flows have both kept our bond yields down, despite an economic recovery, and have helped buoy our own stocks with fresh capital. When you consider that many of the sovereign bonds of major countries used to yield as much as 7 percent and now give you only a 2.5 percent return, you can understand why we can expect European money managers to continue to flock to the United States for better investment opportunities. Remember Europe’s got more than 700 million people with savings that have to be put to work somewhere, and until this last year, very little of it ended up in the United States. Same with funds from China that had been parked in European bonds. Chinese money has been going into our bond markets with a vengeance in 2014, even as the Chinese already hold 2 trillion dollars’ worth of our debt. China is our largest lender; its appetite for our bonds seems endless. In this book, I suggested that U.S. interest rates are most likely going to move up, perhaps not as gradually as we would like, because of the economic recovery. But this European fund flow has so far kept our bonds surprisingly low in yield, making many of the stocks that I describe as bond market equivalents because of their higher yields far more valuable than they would be otherwise. Fourth major change? How quickly stocks bounce back after a disappointing piece of news. For ages I had a rule about investing: you can’t buy a stock soon after an earnings disappointment no matter how low it goes. You need to wait to see the next quarter to be sure there is an all clear. One of the reasons I adopted that rule is because I recognized that even if you thought a company could rapidly recover from and reverse its fortunes, money managers would not be so forgiving and would keep the stock in the penalty box for at least the next three months. Not anymore. Now we see stocks as varied as United Parcel, Federal Express, Oracle and General Mills report shockingly weak numbers but tell a tale of a more positive future, and the stocks rally right back to where they were after a brief dip, or even go higher than where they were just a few weeks later. This is a remarkable change, an element of forgiveness I have never seen before. It has opened up whole new possibilities out of what once were purgatories. This change makes for a much more benign stock market. In the old days you took your life in your hands if you bought a sell-off after an earnings miss. Now many of these disappointments must be considered opportunities. Some of the best money made in 2014 revolves specifically around this newly discounted merchandise as it turns out that the stock was far more damaged than the company itself. In fact, we have taken to buying that first dip for my charitable trust if we believe management has traced out any meaningful, credible way to reverse the current fortunes. It’s been working. Fifth new moneymaking theme? The return of old tech to the fore of market opportunity. For almost a half decade, the market has forsaken the companies that brought you so many amazing products and supported so much of what we think of as technology. The reason? Because they were linked with the personal computer, which many had written off as no longer a growth business. However, that obituary turned out to be premature. New versions of the personal computer, including ever larger, more functional tablets, and ultra-small “clamshells” began to stem their decline in the past year and are now beginning to grow, albeit slowly but surely, as the world’s economy recovers. This change has seen a remarkable shift in many areas left for dead. Stocks I formerly scorned because they were either personal computer–related or because they used powerful servers that seemed like simply souped-up PCs are now among the hottest equities in the firmament. Given how recent this turn has occurred, I think these stocks have only just begun to make their moves. Who fits this new pattern? I never like to outthink trends. The two most obvious beneficiaries are Microsoft and Intel. In my meetings with these two companies of which I always maintained close relationships, I am stunned by how quickly the turn has occurred. Some of it is new management. Satya Nadella, the new Microsoft CEO, has been calling for bold change, including layoffs of as many as 18,000 people, and now that Windows has a tailwind pushing it, the company may be able to unlock billions upon billions of dollars in value while at the same time boosting its buyback and its dividend. Microsoft could have many good years ahead of it as the stock has now become very cheap, even without a breakup into Xbox, utility software and cellphone and cloud initiatives. Same with Intel, the big semiconductor company. I think that Intel, once one of my absolute favorite companies, had lost its way over the years, spending way too much on projects that didn’t pan out while at the same time really missing the great growth market out there: the cell phone. Now Intel is being reenergized by new CEO Brian Krzanich, a man who has slashed profitless spending, turned the company back to its inventive roots, and made it, once again, into a semiconductor powerhouse. It, like Microsoft, represents tremendous value with a good yield and earnings estimates that I think are way too low given the company’s newfound momentum. The companies that make parts for personal computers are just now beginning to get better valuations on their earnings. Two disk drive makers, Seagate and Western Digital, while participating somewhat in the bull market, could trade substantially higher as it begins to dawn on more portfolio managers that other devices besides handhelds might be on the increase. Micron, which had benefitted from a consolidation that I detail in this book, is now seeing not just a tightness in supply of the commodity DRAM chip that it makes; it is also seeing an increase in demand that is causing average selling prices of its wares to lift. That’s not happened in years. Same thing goes for its division that makes flash storage. Perhaps the biggest beneficiary may be Hewlett-Packard, a company that had truly been left for dead after a string of bad acquisitions had been made by a set of truly weak chief executive officers. Now, under CEO Meg Whitman, Hewlett-Packard has turned around its core personal computer and service business, and it has done so with far fewer people on the payroll. That’s allowed her to boost the dividend and increase the buyback of this venerable computer company that has gone from being on the ropes to raking in the profits.

Look for many old tech companies to continue to rebound as personal computer refresh cycles, after years of neglect, kick in all over the world. Sixth theme? The return of China, or at least Chinese companies, to the investable firmament. After a series of scandals and a Communist Party crackdown of new equity issuance, there’s been a noticeable change in the merchandise now emanating from China. We are getting respectable, fast-growing companies that look just like American companies when it comes to the financials, and also have incredible growth characteristics. Stocks like Baidu, VIPshops, JD.com and the newly public Alibaba, all of which I have repeatedly highlighted on Squawk on the Street and Mad Money, have captured many a growth manager’s attention as they should, because these companies are all variations of Amazon but with much better opportunities for profits. Alibaba, in particular, stands out as a potential core holding for those investors seeking long-term growth. Now, I am not yet willing to believe that the Chinese economy is making a comeback. But I think its online retail possibilities, given the Communist Party’s newfound predilection to emphasize internal consumption over exporting, present tantalizing opportunities. I also believe that many of the accounting scandals involving new Chinese companies may, at last, be put in the rearview mirror. Seventh change? The analyst community. For years, ever since the Great Recession, analysts have been given to a level of negativity that while cogent during the dark days, now seems out of step with the reality of better economic times. Hardly a day goes by when we don’t catch upgrades of stocks that had been hated for years. For example, the personal computer stocks I just mentioned have all been despised for ages by the research arms of the major brokerages. Now they are being upgraded, and each upgrade takes these stocks much higher. Same with the auto makers and the airlines. I haven’t seen anything like the agglomeration of upgrades since right after the Great Crash of 1987, when analysts almost en masse turned negative only to spend the next several years going out positive, and with each upgrade a higher price ensued. I know the sell-to-hold-to-buy repertoire of analysts shouldn’t mean that much, but with the change in tone of the market to a more positive bent, analyst upgrades are boosting stocks like crazy. It isn’t unusual to see stocks gap up in price on an upgrade that would have been yawned over for the past half-dozen years. I marvel at this phenomenon almost daily in my “Mad Dash” and “Stop Trading” portions of Squawk on the Street. Upgrades matter and they are now coming every day, fast and furiously, as analysts no longer share a collective bunker mind-set. The eighth new theme? The surprisingly strong pro-growth new Fed chairwoman Janet Yellen. One of the saving graces of this era was the fantastic work Ben Bernanke did as Fed chair to steward the economy toward a comeback after the Great Recession that’s been unrivaled by all other Western nations mired in the downturn. It’s one of the reasons I dedicated my last book, Getting Back to Even, to the former Fed chief. His combination of low interest rates and aggressive money creation triumphed over a federal government so at loggerheads that after an initial, underperforming stimulus package, has been cutting back hiring and job-boosting infrastructure programs ever since. While there were many candidates for the Fed job, the president picked a person most similar to Bernanke in a desire to keep rates as low as possible until a genuine recovery ignites. Yellen’s concerned about employment at a time when the recovery’s still spotty, knowing that we have had totally inconsistent industrial production, retail and housing reports, albeit certainly stronger than previous years. Aside from one errant comment about the “stretched” valuations of smaller social media and biotechs, she’s been as hands-off about stocks as Bernanke. We want the Fed chief not to focus on a few admittedly risky sectors of the stock market and instead be concerned with helping the economy along as Bernanke did, and that’s continuing under Yellen. She creates more opportunity to make money in the stock market because her bias is not to slow the economy down through higher rates for fear of inflation, but to stay easy to try to solve longer-term unemployment issues that aren’t being addressed by the president or Congress because of partisan rancor. She is proving to be a godsend to the stock market with her thoughtfulness and lack of rash judgments. Ninth theme: the return to stock picking and the end of a silly season for ETFs. One of the most important changes that has occurred since the initial launch of Get Rich Carefully is the recognition by the market of what I call the ETF-ization movement that has finally peaked and is receding. What’s ETF-ization? It’s a once-prevailing view that stocks are like commodities and can be grouped by sector without worry that one company is truly superior to others. We are now in a period where we recognize that individual companies and managements are indeed different from each other. Retailers, for example, have had very mixed success dealing with the up and down economy, some blaming the weather for poor results, others even citing a funk in the consumer herself. But some companies, notably Costco and Macy’s, two Get Rich favorites, have risen above the fray. The same thing has happened in new technology, where the proven winners have just gotten stronger and are leaving the others behind. One of the most important theses of Get Rich Carefully is that being careful to identify best of breed and not lumping in the good and the bad through an ETF can lead to much better returns. It’s a validation of my homework-derived thesis: the more you know the more you make. I am not, per se, against index funds if you do not have the time or inclination to research and deploy your hard-earned capital. It’s always been my default theory, as I don’t want you taking on individual stocks if you don’t have the ability to do the homework. I see many people, for example, on Twitter who blindly buy stocks of companies without even knowing what they do. They just like the “action” or the “momentum.” When the action and the momentum cool, they get nervous, and when the stocks swoon, they blow them out. That’s become the modern version of buying high and selling low. My bottoms-up approach should lead to the opposite; as stocks of terrific companies go down, you buy more, not less. The twilight of the homogenized, commoditized baskets of sector ETFs is at last upon us, something that will make it easier for better managements to distance their stocks from the pack. It’s a subtle but huge change, and I hope that the ignominious brainwashing of America by greedy professionals eager to get the fees that come from the endless procession of sector ETFs is at last coming to an end. Final theme, best for last; the renaissance of mergers and acquisitions in the market place. When people ask me how I can still like stocks at these supposedly lofty levels, I always come back and say, “Don’t look at me, look at what the companies are doing.” We are seeing a remarkable number of deals occurring, in dollar amounts that are so far ahead of any other years that it is astounding to behold. I used to joke with my CNBC colleague and merger and acquisitions expert David Faber that each week started with Merger Monday, as we would have major deal after major deal be announced after a weekend’s worth of work. Now every day seems to be Merger Monday. Plus the consolidation is happening in everything from entertainment and telecom to oil and gas, to auto parts to chemicals to aerospace, defense, materials and, most important, consumer products. We have seen a series of consolidations and bidding wars for companies that make current valuations seem like they are aberrantly low. Amazingly, almost every deal creates a bump in the acquirer, a further verification of my theory that stocks remain too cheap and the opportunities vastly surpass the risks. When the buyer’s stock gets rewarded, it inspires ever more deals, which I expect to continue after the longest dry spell of deals in modern memory. We are seeing these deals in large part because there is a growing sense that while not going back into a recession, we are not going to see the kind of 4–5 percent growth we used to take as a given for both the United States and the world. Thus the only way to really assure your shareholders that they’ll see consistent returns is to buy other companies and then take out costs, giving you earnings gains for many years to come. Any improvement that we actually get in any of the worldwide economies, such as Europe, Asia or Latin America, will quickly lead to a boost in sales and enlarged profits because of the streamlining of the labor forces that has occurred during the downturn. The recession gave cover for companies to fire excess workers, which has resulted in some pretty powerful bottom lines wherever a recovery takes hold. There are simply too many areas where similar corporations compete with each other, including retailers, restaurants, financials, chemicals, metals, oil and gas, health care, medical devices and even social media and e-commerce firms. All of these are rife with deals and ripe with opportunities. It’s not unusual now to wake up to a deal like Merck buying Idenix, a little biotech company, for three times what it was selling for just the day before with the hopes that it might have a formulation that can cure hepatitis C. Idenix is a reminder, by the way, of why I like speculating in small capitalization stocks for a tenth of your portfolio. That keeps you interested in your money and also allows lightning to strike. It is also a verification that Fed chief Yellen’s worries about stretched valuations of small biotechs is misplaced. In a world where big pharmaceutical companies are out of ideas and have no attractive, long-term pipelines full of new drugs to speak of, smaller, riskier biotechs are more likely than ever to catch lofty takeover bids giving instant profits to those who speculated wisely. We see European companies that we thought were dead men walking now suddenly alive and well—and buying U.S. companies, like when a German company recently went after the venerable TRW auto parts maker. Or we get a bidding war for a sleepy Sara Lee spin-off, Hillshire Brands, that, out of nowhere, virtually doubles the price of this left-for-dead sausage maker out of nowhere. I expect many more takeovers in the food and beverage arena as sales decline and companies clamor for growth via acquisitions. Finally, we have seen the return of the hostile takeover, perhaps the most bountiful of all merger and acquisition activity. Consider the three most prominent attempts, Valeant Pharmaceuticals going after Allergan, Dollar General seeking Family Dollar and Twenty-First Century Fox gunning for Time Warner. Valeant’s managed to drive up the price of Allergan by more than a third. Dollar General came in to bust up a deal between Family Dollar and Dollar Tree, something that insured fabulous returns for Family Dollar shareholders. Yes, Fox ultimately walked away from Time Warner, but in the interim you could have made more than 20 percent in just a few days of trading. The excitement and the gains that come from these kinds of deals cannot afford to be missed and many of the sectors where the deals are most likely going to occur are detailed here in later pages. Now, I am not blind to the risks that are in front of this market. In the past year we have had geopolitical tensions that hadn’t been seen since the time of the cold war. The Middle East’s Arab spring has turned into a quagmire that threatens to spread to all of the oil-producing countries. The gridlock in Washington pretty much makes it so nothing positive for business can come out of Capitol Hill. There will be no stimulus, no infrastructure spur of any consequence. While in the short term the federal deficit seems tame, in the longer term, as Baby Boomers retire and Social Security and Medicare face demographic threats that are by no means resolved, there’ll be a negative impact on the stock market. Meanwhile the nascent hiring boom will most likely be tempered by the implementation of the confusing, jumbled Affordable Care Act. Nevertheless, all of these problems are, I believe, already well factored in by the level of prices in the market. If any of them is actually resolved positively, you will see an even more powerful, consistent, upward move than even I believe possible. So fret all you want about missing the big moves. Worry that it is rigged and you can’t afford to be more than just a sightseer. Shake in fear about another financial collapse or runaway inflation or an ineffectual Fed or a dysfunctional Washington. I, on the other hand, prefer for you to get rich using stocks as your wealth builders, as long as you invest wisely and carefully when doing so. July 2014

We’ve been beat up. We’ve been struggling to come back. We’re finally breaking out to levels that were thought to be unthinkable given how poorly stocks have performed in the past decade and a half. We need to stop getting knocked around and settling for incremental strides. It’s time to use the stock market to build wealth again. It’s time to get rich, but to do so carefully this go-round, not recklessly and not with blind disregard to this new world of investing. We accept that this market has overpowered most small investors. The big funds too seem to have lost their ability to beat the averages, perhaps permanently, because of their size and because of their collective bunker mentality that has them simply trying to mimic the Standard & Poor’s 500. I am confident you can beat the averages if you work with me to triumph over the obfuscating, infuriating and often broken process of trying to profit from short- and long-term stock price movements. What does it take to Get Rich Carefully? In the past eight years, watching the markets for Mad Money and then Squawk on the Street, as well as investing in them for my charitable trust, I have had to rethink entirely how you can use stocks to generate the wealth you need to put children through school, buy a house, afford your leisure time and ultimately fund your retirement needs. During my frequent trips to colleges for Mad Money, I have seen that a whole new generation has discovered the wonders and dangers of the stock market, but they do not have the tools to profit from its gifts or protect themselves from its pitfalls. Most of all I have come to realize that the basics continue to elude people, that most people feel left out, that they “never took the course,” so to speak, about how the markets really work. Consequently, they feel ignorant and disenfranchised. They know a small number of people are making money again. They yearn to be a part of that select group, but they know that the losses in the past few years have been staggering and that bonds and cash are the only choices for those who don’t know how money creation works. Unfortunately, the thirty-year bull market in bonds—where prices went up and interest rates went down—has now ended. The easy, safe, if not guaranteed money has turned into the risky money that’s anything but guaranteed and has been generating humongous losses over short periods of time. That’s not what these bondholders expected when they stashed trillions of their hard-earned dollars in these funds. They didn’t know they could lose money. But switching that giant hoard to stocks without the tools, without the knowledge base? That’s just foolhardy, isn’t it? No, not if you read this book. Get Rich Carefully is designed for investors who thought they were being careful playing it safe, storing cash in bond funds and keeping it in low-interest certificates of deposit. It’s tailored for those who are befuddled about and distrustful of stocks but seek better returns than they’ve gotten from somnambulant managers and underperforming mutual funds. It’s meant for those who think they can profit from stock price gyrations but don’t know how and why stocks really go up or down. They are mystified by the process though eager to learn how to gain wealth from stocks in a prudent but opportunistic way. What will you find here to help you make the transition from amateur investor to someone who can go toe-to-toe with professionals—although they have hardly distinguished themselves in the past fifteen years—and become the more informed client who produces the best results? How about a novel, fast-paced how-to book that gives you insights into how stocks really work and how you can profit from this market’s machinations and mysteries rather than be turned off or freaked out by them? First I let you in on secrets that you don’t know unless you’ve worked within every part of the process of how the stock market works, a process I’ve been exposed to throughout my financial career. Then I explain what propels stocks, why they really advance or decline. No matter what I have done and how hard I have tried in my media career, I still run into thousands—yes, thousands—of people who do not understand the anatomy of a one-point gain. How can a stock move up a dollar? Why does a stock shed three points in a heartbeat? How does it actually work? After all the chicanery that’s been visited upon this stock market, many people think it’s all alchemy. Others think it is just plain crooked. They don’t trust the explanations they hear daily about why their stocks moved up or down and why the market rallied or swooned. They’re right to be suspicious and skeptical. After you read Get Rich Carefully you’ll be wise to what really happened on a given day’s trading and, therefore, ready to make money in the next day’s session or the next week’s, month’s or even years’ worth of sessions ahead of us. No, I am not able to give you tomorrow’s cyber paper today, but I can try to do the next closest thing, showing you how to predict moves with a degree of certainty that will make you more comfortable and better at creating your own wealth. Next, I show you how to take advantage of the confusion and obfuscation that surrounds the movements of equities to pick the right stocks at the right prices. Why not get your portfolio in tip-top shape to profit from what looks to be the chaos of daily trading? People always ask me what I read, how I get my input, how I have such an edge when it comes to so many stocks and so many sectors. How come it seems to come so easily for me? Believe me, I wish it did. Sure, I have resources that you can’t have, but they are way overvalued compared to the information I glean from public information about stocks that is readily available to you on dozens of sites around the web. You just haven’t been taught how to parse the releases, how to understand the research and, most important, how you can use conference calls to make sense of things. Yes, these sources can be arcane and difficult to divine, but they are a unique part of the stock market firmament that you must tame so you can try to profit from every earnings report. They are among the most important sources for understanding why individual stocks advance over longer periods of time, sources I am confident you will understand after reading Get Rich Carefully. Once you have learned how to do the homework, I bet you will become as good a student of the market as I am, maybe better, because you will focus only on what matters, not on the millions of extraneous details that I have, at last, learned to cull and discard. Everything I do, almost every stock I pick, emanates from major themes that are playing out underneath the market. What are those themes? I refer to them on television, and I try to flesh them out as carefully as I can. However, I have never done them justice. If you are going to Get Rich Carefully, you are going to have to get rich over time—no shortcuts. So you need longer-term investment ideas, rooted in concepts that can withstand the vicissitudes of a sometimes broken, often confounding market over the next five to ten years. I’ve got seven of them, seven themes all built to last no matter what the world’s economies throw at you. Don’t worry, I don’t just detail the themes. This book is practical: I give you the best stocks to profit from them, stocks to buy now and hold as the themes unfold over many years’ time. I want you to benefit from some of the insights I have gained, specifically from hosting Mad Money and running ActionAlertsPlus.com, the fancy name for my $3 million charitable trust. For example, I have seen chief executive officers take their poorly performing ugly duckling stocks and turn them into extremely profitable swans through acquisitions and breakups. I show you who might be next to create that wealth for shareholders. That means no matter how sick or tortured the market might be at any given moment, there’s still a huge amount of money to be made. No one else is talking about this new and amazing money-making process, yet I think it is the most lucrative path to great wealth currently playing out today. You want proprietary ways to wealth? I have now conducted hundreds of interviews with chief executive officers and spent thousands upon thousands of hours prepping for, sitting with and learning from the best of the best executive talent that America has to offer. Here, for the first time ever, I reveal my Bankable 21, my salute to the twenty-one best leaders who have come on Mad Money, and why you should invest with them and ride their coattails to tremendous gains. The list will surprise you, might even amaze you, because most are anything but household names. I want you to pick your favorites of my favorites, invest in their stocks and stay with them through thick and thin. That’s what my Bankable 21 CEO list is all about. As Bob Dylan noted years ago, the times, they are a-changing, and I have had to change with them. For years I have described myself as a fundamentalist, someone who looks strictly at the companies underlying the stocks and tries to discern where, when combined with the news of the day, they are heading. I have shunned technical trading and charting because I thought those methods were lazy and less rigorous than my routine of homework and selection of individual stocks. However, through the regular and wildly popular “Off the Charts” segment of Mad Money I have validated the success that can come from interpreting the arcane and seemingly inscrutable stock pictographs that the segment explores. Now, at last, I teach you how to harness the “technical” and divine the charts in a digestible way that makes you better at picking winning stocks and what prices to pay for them. Through my “Charting for Fundamentalists” chapter I hope to augment the timing of your buys and sells and even short sales using better, more precise entry and exit points. I also want you to glean from my lessons learned after a decade of picking stocks with an open hand through the brutal gauntlet that is ActionAlertsPlus.com. I critique my own moves after examining the contemporaneous bulletins, looking for misjudgments, pitfalls and bogus rationalizations that you must never make if you are going to Get Rich Carefully. I give you the raw, often embarrassing insights and the do’s and don’ts these insights spawn. Twenty-twenty hindsight can actually be a brilliant teacher when you learn from my mistakes. Be my student; let me show you how to learn from what I have done right and, perhaps more important, what I have done wrong. Be wary of a creeping lack of diversification, reckless stock picking masked as prudent portfolio management and dozens of other sand traps that you must avoid if you’re going to use stocks to get rich. Finally, you know how important I believe discipline is to managing your own money. When I say Get Rich Carefully, I mean get rich with disciplines that I have pioneered and, hopefully, by now have almost perfected. I say “almost perfected” because I have sometimes let emotions get through the door instead of leaving them outside so I could become a better trader and investor. I give you the coat checks to your anxieties and fears and, yes, greedy tendencies. So sit back and enjoy my keys to “What Matters? What Doesn’t? What We Should Care About,” “When and How to Sell in the New, More Difficult World of Investing,” and how to “Check Your Emotions at the Door” so you know how to discipline yourself. Believe me, after reading those chapters you will be cracking your own whip and will be your own best critic and disciplinarian. I know, lots of tall, ambitious orders here. And certainly lots of new orders, not anything warmed over or seen in any other investment book, including my own. Because this is a different market. It’s a better one than we have had in decades, even though it seems ever more treacherous and unfair. The rallies are happening at a period of tremendous and deserved disenfranchisement for the everyday investor. How in heck are you going to make big money in that case? Personal income levels are stagnant; they have been for years. Bond funds have gone from cautious friends to reckless, wily enemies. Real estate seems played out, gold stymied, commodities kaput. But stocks? Let’s go figure them out. Let’s go harness them together. Let’s go get rich with them, carefully this time, so you don’t give it back. Let’s go forward and make some hay, because at last the sun is shining, and we have the tools to harvest the money that’s within our grasp after years of toiling in the most barren of vineyards.