I’m listening to Jim Cramer because I want to get rich from shares like he did

first_img Image source: Getty Images. Kevin Godbold has no position in any share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. “This Stock Could Be Like Buying Amazon in 1997” Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Our 6 ‘Best Buys Now’ Shares See all posts by Kevin Godbold I’m listening to Jim Cramer because I want to get rich from shares like he did Kevin Godbold | Tuesday, 29th December, 2020 center_img I’m not letting Jim Cramer’s zany, crackpot presentational style put me off listening to his advice about investing strategy. Although he’s an American television personality presenting CNBC’s Mad Money, he’s also a successful former hedge fund manager. And I want to get rich from shares like he did.He’s got some useful things to say based on his hard-won wisdom and what worked for him in the markets. Firstly, I like his advice to not own too many shares. Although Cramer believes in some diversification, he reckons it’s always tempting to buy too many names from the same sector.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…A focused portfolio to get rich from sharesSo, he advocates keeping a portfolio as small as possible while maintaining diversity. And to do that, he set a limit for the number of stocks in his portfolio and then ran a policy of forced displacement.In other words, if he found a better share than the ones he was holding, he had to sell one to make room for the newcomer. He reckons the tactic enhanced his performance and he made the most money when he owned the fewest shares.The second piece of advice that resonates with me is to buy the shares of the best companies. I think that’s in line with stock-trading pioneer Jesse Livermore’s approach of buying the strongest player in any given sector. Cramer reckons we do this with other major purchases, so why not with stocks? It often pays, he asserts, to spend a little more to get something better.Third, I like his approach of not buying all at once. And that chimes with the way Livermore used to approach shares. And in today’s markets, market wizard Mark Minervini does the same thing. The idea is to see if an investment begins to work out as planned before committing larger amounts of capital.If a small position goes wrong, I’ll have only lost a small amount of money. But if it starts to go right, I can pile in with a bigger position. Portfolio execution techniques like this can be very effective.Damaged shares, not broken businessesThe fourth tip I’m keen on from Cramer is to buy damaged shares, not broken businesses. We see so many articles about buying cheap shares. But I wouldn’t buy shares in any old company. For me, the underlying business must remain sound. And any damage to earnings or other challenges must be temporary.That leads me to examine quality indicators and to look for strong balance sheets. It also steers me towards billionaire investor Warren Buffett’s preference for buying wonderful businesses selling at fair prices. The alternative is to buy mediocre business selling cheap, and that’s not for me.Cramer reckons he keeps a watch list of great companies and buys during general market sell-offs. Or he buys when sentiment drives a share price down, even though the fundamentals of a business remain sound.So, the stock market crash caused by the pandemic has thrown up some interesting opportunities. But it’s important to be discerning about what shares to buy. Some businesses will have suffered irreparable damage from the coronavirus crisis. So, I’m following Cramer’s advice to keep me away of them. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. 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