Buy And Homework


DEFINITION of 'Buy And Homework'

A buzz word coined by Jim Cramer based on the idea that "buy and hold" is a losing strategy. Cramer's buy-and-homework strategy is to spend at least one hour a week researching each stock in your portfolio.

The research the buy-and-homework strategy calls for can include listening to conference calls, knowing what analysts are looking for, reading the news stories and reading financial statements. Cramer often points out that everything is available easily and for free on the web.

BREAKING DOWN 'Buy And Homework'

There are two main arguments that investors use against this strategy: people don't have the time, and if you hold on long enough, the stock will come back.

Cramer's argument for the first excuse is that if an investor does not have the time to spend researching each stock in their portfolio for at least one hour per week, they can hand off their portfolio to a professional manager (e.g., through a mutual fund).

The latter is even easier for Cramer to refute – just to look at a stock like Enron.

  1. Conference Call

    An event during which investors can call in to hear a company's ...
  2. Analyst

    A financial professional who has expertise in evaluating investments ...
  3. Consolidated Financial Statements

    The combined financial statements of a parent company and its ...
  4. Jim Cramer

    Former hedge fund manager, columnist and author as well as host ...
  5. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  6. Fundamental Analysis

    A method of evaluating a security that entails attempting to ...
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