September 25th - Lessons from Amaranth

Cramer started out by looking at Amaranth, the recent hedge fund that lost billions recently. Cramer looked at the following items to learn from this situation:

1) Hubris is not a good strategy (a young stock picker). Don't be so risky and stay diversified.
2) Took on big debt when trading, possibly as high as 9/1. Don't trade on margin or at least cut back.
3) Don't think you know more than the Market.
4) Know where you money is going if you have someone managing your money.
5) Learn about your money manager and check their track record during bad times.
6) Even professionals can be fooled
7) Understand the stocks that you own - give 3 reasons for owning it
8) Don't be on things like the weather
9) Don't get attached to your stocks. Take your profits.

Cramer briefly mentioned right before the lightening round that Time Warner Inc. (TWX) was a buy because it is focusing on the cable business and will go to $27. This is a heavily traded stock, so not one I would short of this recommendation, no matter how high it might spike.