(To sign up for the CNBC Investing Club with Jim Cramer, subscribe here.)
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.
Get Southern California news, weather forecasts and entertainment stories to your inbox. Sign up for NBC LA newsletters.
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.
We'd love your feedback on the CNBC Investing Club event. Please fill out this survey here.
The CNBC Investing Club is now the official home to my Charitable Trust. It's the place where you can see every move we make for the portfolio and get my market insight before anyone else. The Charitable Trust and my writings are no longer affiliated with Action Alerts Plus in any way.
As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Typically, Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If the trade alert is sent pre-market, Jim waits 5 minutes after the market opens before executing the trade. If the trade alert is issued with less than 45 minutes in the trading day, Jim executes the trade 5 minutes before the market closes. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. See here for the investing disclaimer.
(Jim Cramer's Charitable Trust is long WMT, MSFT, AMZN, BA and UNP)