As an investor, it is hard not to like Jim Cramer and if you read his books you will gain plenty of ideas on not losing money and more importantly making money. He wrote a book called Get Rich Carefully published by Penguin Books, New York, 2013. One of the wonderful things Mr. Cramer does is tries to ensure you do your homework before investing.

For long term investing, the key to understanding is to identify the big-picture themes or megatrends for the era in which you are in. After identification, instead of a spraying of a shotgun, figure out the best companies to and can take advantage of the big themes. Taking advantage means to make money and managed the company. The advantage to doing this piece of homework is Wall Street goes through cycles or goes up and down. On the down cycle, you can buy bargains, which is why Mr. Cramer only recommends going after the best companies in the theme.

The themes Mr. Cramer believes the trend s will be around for the next 5 years are:

1. Tech companies that embrace the 3 aspects of Social, Mobile and the Cloud.  If you are older than 30 you might think tech as the desktop, the theme is tech as the laptop and mobile phone. It does not mean the other companies are not as good, but for growth companies  – the names of companies to examine are Google, Facebook, Salesforce.com, LinkedIn, Amazon
2. Companies that keep you healthy – the attitude towards food has changed.  Companies such as Whole Foods, Hain Celestial, Chipotle, GNC Holdings
3. The New Frugality – saving money or low cost, good quality – Home Depot, Lowes, TJX Companies, McCormick (spice) , Costco, AutoZone, Six Flags, Priceline
4. Anticompetitive Mergers – airlines mergers US Airways and AMR;  car rental companies – 3 companies control 87% of the business Hertz, Avis and Enterprise; Gannett publishing was able to buy into TV stations; Walt Disney; PVH and VF Corp, Eaton
5. The Power of Innovation – tech in the old style companies for them to change and innovate. Examples are Colgate, International Flavors & Fragrances, Under Armour, Domino’s, DuPont
6. The New Pharma – Celgene, Gilead, Biogen Idec and Regeneron
7. Oil and Gas produced in the US – EOG, Core Labs, Occidental Pete, Schlumberger, and Kinder Morgan Energy Partners.

The idea of looking for the big megatrends is for you to see how the better companies are managing and you can hitch a ride. Mr. Cramer recommends you pick them up on the downturn of the cycle and ensure the reasons you bought them remain.

Linking to dividend paying stocks, for Mr. Cramer growth is the key but whether you invest for growth or dividends it is always best to invest in the best of the companies. They tend to have less risk and are easier to monitor.

There are more questions than answers, till the next time – to raising questions