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CNBC's Jim Cramer answered questions during a special live event called "CNBC Investing Club: Jim Cramer's Game Plan for 2022."
Here are some of Cramer's best investing tips.
1. Profitability over price
When it comes to investing, profitability wins, according to Cramer.
"Fast-growing and profitable are very different things. … Get rid of the fast growers that don't have profitability," said Cramer.
He said that while many of the stay-at-home stocks grew exceptionally fast during 2020, they still weren't profitable. Now, those stocks are being punished.
For example, Cramer said he would not currently invest in a name like CrowdStrike, a cybersecurity company that benefited from the stay-at-home trend.
"I love CrowdStrike. That is an incredibly fast-growing company. It won't cut it … because it doesn't make money," Cramer said.
2. When to take profit from a stock that has run up in price
Cramer has a guideline for when to take profit in a stock: When a stock doubles, take 25% off. If the stock doubles again, take another 25% off.
When a name runs up so much it moves an entire portfolio, Cramer said it's time for the investor to sell some shares of the company.
"Bulls make money. Bears make money. Hogs get slaughtered," he said.
3. 'When the story changes, you take the trade'
As a general rule, Cramer urges investors to pay attention to changes in a company's overall story.
Cramer reminisced about a mistake he made regarding Walmart's stock. He knew the pandemic would create booming activity for the big-box retailer and the stock was rewarded.
Except Cramer didn't sell any stock at the top, despite knowing that Walmart CEO Doug McMillon planned to lower prices to gain more market share.
Cramer held onto the stock as it moved lower.
"I screwed up. It was a good opportunity to take a trade and I didn't. The story changed. When the story changes, you take the trade," he said.
4. How to pick between two stocks: 'You have to know yourself'
When choosing between two comparable names, Cramer said, "You have to know yourself."
In an example of Microsoft versus Amazon, he explained why he would go for the latter over the former.
"Amazon at this very moment is underperforming Microsoft," Cramer said. "But I think Amazon's a great long-term stock. Microsoft is a juggernaut that I frankly … don't really care for."
5. Sometimes you have to take the pain
User asked Cramer if she should hold onto aircraft maker Boeing, which has had a disappointing year, or switch to Union Pacific railroad.
Cramer said to stick with Boeing, despite losing 3% year-to-date. He said the company is making continuous mistakes. However, the "Mad Money" host believes if Boeing clears up some of the headwinds around the 737 Max authorization and Dreamliner, and if China starts reordering planes, the stock will shoot to $280. Then, with a secondary offering and a cleaner balance sheet, the company can hit $400 per share, he predicted.
Cramer said he is willing to "take that pain for that gain." He added, "The answer is, stay with Boeing. I'm not going to leave it as painful as it is. We can't shy away from pain. It's part of a process," he added.
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(Jim Cramer's Charitable Trust is long WMT, MSFT, AMZN, BA and UNP)
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