James J. Cramer - Jim Cramers Getting Back to Even

Also by James J. Cramer

Jim Cramers Stay Mad for Life:
Get Rich, Stay Rich (Make Your Kids Even Richer) (with Cliff Mason)

Jim Cramers Mad Money:
Watch TV, Get Rich (with Cliff Mason)

Jim Cramers Real Money:
Sane Investing in an Insane World

You Got Screwed!
Why Wall Street Tanked and How You Can Prosper

Confessions of a Street Addict

JAMES J. CRAMER

WITH CLIFF MASON

Simon & Schuster
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Copyright 2009 by J.J. Cramer & Co.

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Design by Rhea Braunstein

Manufactured in the United States of America

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Library of Congress Cataloging-in-Publication Data
Cramer, Jim.
Jim Cramers getting back to even / James J. Cramer with Cliff Mason.
p. c.m.
Includes index.
1. StocksUnited States. 2. InvestmentsUnited States. 3. Finance,
PersonalUnited States. 4. Financial securityUnited States. I. Mason,
Cliff. II. Title. III. Title: Getting back to even.
HG4910.C73 2009
332.63220973dc22 2009027131

ISBN 978-1-4391-5801-2
ISBN 978-1-4391-6354-2 (ebook)

This publication contains the opinions and ideas of its author. It is sold with the understanding that neither the author nor the publisher is engaged in rendering legal, tax, investment, insurance, financial, accounting, or other professional advice or services. If the reader requires such advice or services, a competent professional should be consulted. Relevant laws vary from state to state. The strategies outlined in this book may not be suitable for every individual, and are not guaranteed or warranted to produce any particular results.

No warranty is made with respect to the accuracy or completeness of the information contained herein, and both the author and the publisher specifically disclaim any responsibility for any liability, loss, or risk, personal or otherwise, which is incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this book.

To Ben Better Late Than Never Bernanke,
who, after a slow start, is doing his best
to save the Western financial world and could go down
as the greatest Federal Reserve Chairman in history.

Getting back to even? What happened to making yourself and your family filthy rich? Could I possibly be aiming any lower? Have things really gotten so bad that you should drop all your hopes and dreams and just struggle to stay solvent?

Absolutely not. But before you can get ahead, you have to get back to even, and in difficult times thats the hardest and most important goal of all. For the last eighteen months weve watched in excruciating horror as first our homes and then our stocks have plummeted in value. Make no mistake, the stock market crashed in the second half of 2008, and this was a crash to rival anything weve seen since the Great Depression. It was the worst year for stocks since 1931. In 2008, Americans lost more than a quarter of their retirement savings in 401(k) and IRA plans, and millions more saw their retirement funds cut in half. For many of you, its as though your money simply vanished into thin air. Im here to show you how to get it back, one dollar at a time.

Ever since the housing bubble went bust and the stock market fell apart like a wet paper bag, weve been deluged with books that promise to help you weather the downturn and get back on your feet. But most of them either offer up the same old tired and often discredited teachings wrapped in a new, panic-filled packagesell all stocks now and cut up those nasty credit cardsor are full of advice that could have saved you a lot of pain if the books had been written two years ago. Wonderful timing. Thats not what youll find in this book. Hindsight is twenty-twenty, but you need foresight if youre trying to rebuild your savings, and especially if youre trying to claw your way back from the ground up.

I can teach you how to protect your money in a downturn. I know how to avoid a stock market crash and even how to take advantage of one. I was entirely in cash for the crash of 1987, and in fact thats actually what put me on the map professionally in the early days of running my hedge fund and allowed me to pulverize the market in the fastest decline from peak to trough in history. I also hope that if you read and followed the advice in my earlier books Real Money, Mad Money, and Stay Mad For Life, you were able to escape the worst of the carnage. But the sad truth is that other than gold, which does well in chaotic times, and U.S. Treasurys, the safest of securities, every single asset class from stocks to corporate municipal and mortgage bonds to commodities has just been hammered. Stocks took an especially severe beating that theyve only just begun to recover from. In 2008, the two most important bellwether indices that track the health of the overall market, the Dow Jones Industrial Average and the much broader Standard and Poors 500, fell by 33.8 percent and 38.49 percent, respectively. The damage has already been done, the moneys been lost, and none of these new books filled with old boilerplate bromides about investing will help you get it back. Most of what youll find on the personal finance and investing shelves is authors giving you an ounce of prevention, when what you really need is a pound of cure. But then again, they are just writers who have never managed money, not even in a bull market, let alone the vicious bear that romped through Wall Street, eating up and crushing the defenseless eggs that you thought were safe in your nest.

Anyone can see that these arent ordinary times. This is still a moment of financial crisis, and Im not just talking about the mess that Wall Street got itself into or the near collapse of our banking system. I mean the individual financial crises that millions of Americans are dealing with every single day: how to keep your home, how to pay for college when the college funds gone dry, how to retire when your retirement moneys been wiped out. This is the cash you were counting on, and rebuilding it is our first priority.

This book is your financial first-aid kit, an emergency room for your portfolio complete with epinephrine shots and paddlesthink Clear!to bring your pocketbook back to life. I can help you stop the bleeding and start putting your financial life back together. The new strategies, rules, and disciplines in this book will help you hang on to what you have and rebuild everything youve lost.