Jim Cramer reveals 5 'boneheaded mistakes' that cost him 'a fortune.' How many are you making?

Moneywise

Wed, September 23, 2026 at 5:30 PM GMT+3 10 min read

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Every great investor has lost money somewhere along the way. What separates amateurs from the pros is the ability to learn from these errors. After all, investing is a lifelong process and getting discouraged early can compromise your ability to retire.

Luckily, you can learn the same lessons as celebrated gurus without watching your hard earned cash disappear — as Warren Buffett once said, the best way to learn is "vicariously" from other people's mistakes (1).

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Buffett has confessed to his own share of howlers, and the same goes for Jim Cramer. The Mad Money host and author opened up on CNBC's Make It about some of his biggest errors.

He says learning from these "boneheaded mistakes" helped make him a better investor (2).

And they can arguably help everyday investors, too, if analyzed properly.

1. Holding losers too long

Investors are often taught to be patient, stand by their convictions and ignore outside noise. However, sometimes things happen that warrant reevaluating your portfolio.

Cramer learned this lesson with Bausch Health (NYSE:BHC). When investors dumped the stock after it fell short of its profit forecasts and faced earlier-than-expected patent expirations, he shrugged it off as ignorant panic selling. Cramer admitted he preferred to believe the company's PR team rather than investigate the warning signs — and said it cost him "a fortune."

Holding losers too long is one of the most widely cited blunders made by investors (3). Nobody likes to take a loss, and this emotion can overshadow rational thinking.

Ideally, investors should objectively analyze every holding after a setback. That said, when you're researching investments, it can be hard to know which sources to trust.

Moby offers expert research and recommendations to help you identify strong, long-term investments backed by advice from former hedge fund analysts.

In four years, and across almost 400 stock picks, their recommendations have beaten the S&P 500 by almost 12% on average. They also offer a 30-day money-back guarantee.

Moby's team spends hundreds of hours sifting through financial news and data to provide you with stock and crypto reports delivered straight to you. Their research keeps you up-to-the-minute on market shifts and can help you reduce the guesswork behind choosing stocks and ETFs.

Plus, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.

But you'll also need a way to pick up any stocks that catch your eye, and it could be a good idea to cut trading costs as much as possible. One option is working with SoFi to get started with self-directed investing.

This DIY approach allows you to invest with no commission fees in stocks, and even index funds or ETFs if you want to spread your money out. Plus, for a limited time, you can get up to $1,000 in stock when you fund a new account.

Before buying and becoming emotionally involved, it could also be a good idea to to establish a list of minimum criteria to stay invested and potentially consider implementing a stop-loss order. This instructs the broker to automatically sell the stock if it falls to a certain price.

The latter option especially makes sense with companies that have great potential but also great downside risk.

2. Being overconfident

Cramer fell into the trap of believing that historically well-run great brands were immune to economic and political risk. He was proven wrong with Estée Lauder (NYSE:EL).

When COVID-19 hit China, Estée Lauder's biggest market, Cramer said he assumed management would adapt and the company would bounce back as it had always done.

It didn't.

Management had no response to falling customer demand or the Chinese government's subsequent crackdown on luxury goods. It took the stock plunging from $370 to somewhere around $90 for Cramer to pull out.

Overconfidence and failing to respond when fundamentals shift are common errors. In a survey conducted by deVere Group, 38% of the high-net-worth respondents claimed their biggest mistake was banking on history repeating itself (4).

How can this be avoided? A good starting point is recognizing that brand strength isn't always enough to survive setbacks and that a lack of response to major threats should be treated as red flags, even from executives with historically fantastic track records.

3. Blindly following advice

Billionaire hedge fund managers are renowned for voicing their opinions on how to invest money, and people often take the bait because those managers work for prestigious companies — and they're wealthy.

Don't make this mistake. As Cramer said he learned early in his career, blindly following advice is foolish, especially from investors whose main priority is making themselves and their clients money.

The next time a so-called expert offers advice, be skeptical. Consider what they could gain from their comments and check out their track record. Have their predictions or stock tips been on point, or is their credibility questionable? Considering all angles is important. But it's equally crucial not to assume people with more money and experience always make the right calls and have your best interests at heart.

If you're new to investing, or just want to set and forget it, one option is to get into automated investing in low-cost ETFs or index funds. Investing a little bit each day can make a huge difference over a life time, especially when it comes to compound interest.

Tools like Acorns, an app that automatically invests your spare change, can help you get started while spreading out your money in a smart portfolio tailored to your risk tolerance.

Signing up for Acorns takes just minutes: Link your cards and Acorns will round up each purchase to the nearest dollar, investing the difference — your spare change — into a diversified portfolio. You can also set it up so any dividends are reinvested into your account, potentially further compounding your growth over time.

With Acorns, you can invest with as little as $5 — and, if you sign up today, Acorns will add a $20 bonus to help you begin your investment journey. All you have to do is set up a small recurring monthly deposit into your account.

But this kind of process isn't for everyone. Sometimes, having a dedicated investment manager — even one you disagree with — feels more secure. Just remember that, ultimately, you're the one who gets to decide whether to invest or not. When you first get started, a set-and-forget method can make sense, especially over 30 years of ups and downs on the market.

However, as you get close to retirement — and your nest egg grows — you may want to have someone you can talk to directly about your investments.

For those with portfolios of $250,000 or more, platforms like WiserAdvisor can connect you with vetted professionals who specialize in this kind of planning.

How it works:

Share your goals: You provide a few details about your savings, retirement timeline and your investment portfolio
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Note: WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties, and specific financial results are not guaranteed.

4. Panic selling

Another classic mistake is panicking at the first sign of danger. In 2023, Cramer bought Oracle (NYSE:ORCL), believing its artificial intelligence (AI) prospects were being undervalued by investors.

Everything was going smoothly, he said, then other parts of the business started disappointing, analysts became bearish and an angry Cramer lost sight of why he bought the stock in the first place and dumped it — just weeks before it rebounded off encouraging AI-related developments.

As previously mentioned, major developments warrant reevaluating an investment. In this case, there was no evidence to suggest the long-term drivers that convinced Cramer to buy were under threat.

Cramer let a fear of loss cloud his long-term strategy. To prevent this from happening, it can help to impose a cool-off period before pulling the trigger. Remind yourself why you invested in the first place and do your own research rather than be driven by external noise.

5. Basing decisions on just one indicator

Cramer, like many other investors, was taught that bond yields revealed the future direction of the economy. He was convinced this technique was flawless, then he said he found out the hard way that bond market forecasts can fail to materialize.

The takeaway from this lesson is to not base decisions on what just one person or a single indicator is suggesting. If expected returns are higher for short-term bonds than long-term ones, a classic recession signal, check to see if other indicators, such as purchasing managers' indexes, unemployment figures, the consumer confidence index and cyclical company earnings reports, validate that message.

And even if they do, don't automatically interpret that as a sign to dump stocks. Recessions don't last forever, and few publicly traded companies go bust when the economy is in the doldrums.

If you're looking for a dark horse for your investments, or something that moves independently of the market, you may be interested in alternative investments. Typical investment wisdom prioritizes a 60/40 split between stocks and bonds. However, a smattering of alternative assets — such as gold or real estate — can help lessen the blow from any dramatic market shifts. Another option is cryptocurrency.

BitcoinIRA makes it simple to hold crypto in a retirement account. A crypto IRA is a self-directed IRA (meaning you choose the investments) that can hold Bitcoin and other digital assets, not just stocks and bonds.

Crypto has historically shown low correlation to stocks and bonds, which makes a small allocation a potential diversifier. Because an IRA is built for decades of holding, it suits a long-term approach rather than day-to-day trading. If picking individual coins feels like a research project, BitcoinIRA's crypto bundles let you buy a preset, themed basket, like blue-chip coins or AI-related tokens, in one click. Optional automatic rebalancing keeps the mix on target.

Assets are held by a licensed third-party custodian. Most are kept in cold storage (offline, out of reach of most remote hacking), and moving funds takes multiple approvals. BitcoinIRA uses BitGo for storage and Digital Trust as custodian, with up to $250 million in custody insurance.

Opening an account typically takes 5 to 10 minutes online. You can fund it with a new contribution within IRS limits, or move money from an existing IRA or an old 401(k), 403(b) or TSP. Crypto prices can swing sharply, so keep your allocation sized accordingly, and check with a tax professional about your specific situation.

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Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

BRK Daily (1); CNBC (2); The Journal of Finance (3); VettaFi (4)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.