Remember the movie “Invasion of the Body Snatchers” where the Alien life force is replacing the humans with exact replicas- except something is just a bit “off”? The movie was re-made three times (based on a book) so there must be something to it.

Who can forget the Pod People?

Jim Cramer= Pod Person

Have you seen Jim’s latest book? It’s called “Stay Mad for Life: Get Rich.” I skimmed through it recently in the local bookstore.

It espouses:

1. Buying stocks of a select group of companies and holding them for a long time after you’ve done your homework on them

OR

2. If you don’t have time to study your investments, buy index funds.

WHAT????

Wasn’t it Jim Cramer who said: “Buy and hold is for morons”?

If it wasn’t him, then I apologize. But recently he did say this in response to an article by Paul Farrell on Marketwatch.com that attacked his show and methods:

If anything, buy and hold is a completely reckless and irresponsible strategy. This is why I have always preached “buy and homework.” There’s nothing wrong with buying a stock with the intention of owning it for years, as long as you’re willing to check up on that stock every week to make sure that your thesis for owning it hasn’t fallen apart. Too often people regard buy and hold as a license to pay no attention to their investments and hide their heads in the sand when things turn sour. How many nuclear utility stocks did our parents own mindlessly with buy and hold? How many Enrons and WorldComs and Webvans and eToys.coms were bought and held? Don’t be silly, Mr. Farrell: You are the reckless one.”

Yes- all buy and hold investors should beware because their company could, gasp, be Enron. Or, even worse, Webvan.

Recently, Businessweek wrote about the “new” Cramer.

Most people actually won’t get rich by buying individual stocks, Cramer says. Unless you do your homework, namely spending an hour a week researching for each stock you own, “You won’t beat the market, and you’ll probably lose money,” he writes.

Times have changed, he writes. Now, partly due to new regulations on how much information executives can reveal to fund managers, “trying to game short-term movements in stocks (is) almost impossible,” he says.

Wait a minute. Buying and selling every day (or week) won’t make you rich? Jim, you’ve been lying to me for years! I feel so betrayed.

But it gets better.

To advise readers and viewers to trade short term, Cramer says, is like telling them “you too can play in the NBA.” A few might be able to do it, but the vast majority won’t. “I’ve evolved to the point where I see the daily struggle that people go through to just put away $100 a month,” Cramer says. It’s a more realistic approach. “I wish I wrote this book first,” he adds.

I congratulate Jim Cramer on figuring out one thing. Not everyone is a hedge fund manager with millions to invest. Most of us do have simply $100 a month. Trading on the dips is unrealistic with $100 a month. The buying and selling fees will eat up too much of our investment to make it worthwhile. The only strategy we have is “buy and hold.”

Welcome to our world Jim.

One thing we can agree on is: stock investing is still the way to get rich. Even if it’s on $100 a month. And even if it’s a buy and hold strategy. Just ask all of those little old ladies who have their Exxon or GE stock. Nothing wrong with that.

Nope, Buy and Hold isn’t for morons.

Did your parents buy shares of Philip Morris in 1945?

Do you have an 80-something aunt who still owns shares of Ford from when her father worked there in the 1930s?

Did you buy shares of Home Depot in 1985 because you lived in Atlanta and loved the stores?

Did you buy shares in McDonalds in the 1970s because they “just loved” those cheeseburgers (and so did your kids?)

You know who you are.

Don’t be shy! I’m looking for people with buy and hold stories to share. 15 years, 20 years, or 50 years. How long have you owned?

Tell me your stories! I want to hear all about it. The triumphs: Philip Morris (the most successful stock in the S&P 500 since 1957). And yes, the tragedies: Ford, GM, the airlines stocks (most have NOT done well since 1957.)

Be proud of being a buy and hold investor. It takes guts and patience.

Contact me using the contact form on this site or e-mail me at tracey@traceysmarketupdate.com.

Privacy guaranteed. Anonymity respected.

You just filled up your SUV. Nearly $100.

You went to a baseball game this weekend with a friend, parked at the stadium, had some hot dogs. About $100. (double it if you took your kids)

You bought the latest pair of fall shoes. $100.

But let’s say you spent that $100 on ExxonMobil’s stock a year ago instead.

According to Sharebuilder’s great “what if I had invested” feature, its value today would be $122.

Not too shabby. For $100.

What if you had bought General Electric instead? $119.

What if you had spent that $100 on Exxon’s stock 5 years ago? Its value today would be $256.

Many investors think $100 gets them nowhere. But it can take you everywhere.

Problem is you have to start now. You have to invest it now to make it happen.

Only $100.

The Motley Fool recently had an article with a chart laying out what the returns would be if you had invested $100 in 7 different big name American companies in 1971 and let it sit there (all dividends reinvested.)

Invest $700. Step back. Wait. Let it grow.

The companies were:

GM, IBM, GE, McDonald’s, Boeing and Altria Group (aka Phillip Morris)

Result?

$165,720.45

What if that investor had been putting in $100 additional dollars every month? He’s be rich! Rich as Paris Hilton.

If you had started just ten years ago with $100 and put in an additional $100 every month into ExxonMobil you’d be building a nice little nestegg. You would have invested $12,700. It would be worth, dividends reinvested, $30,894 for a gain of 143.3%.

For just $100 every month.

The power of time and compounding is magnified as the years go by (with slowly growing but stable stocks.)

According to the Motley Fool, $1000 invested on January 4, 1971 in McDonald’s would be $1.8 million today. $1000 invested in Altria Group on that same day would be $7.4 million. Altria Group was the best performing stock of the S&P 500 over the last 50 years. Obviously, lots of money in smokers.

Conversely, $1000 invested in GM in 1971 would be worth only $7,480 today. Not so much money in the car manufacturers.

You win some. You lose some. But you have to be in the game to find your financial freedom.

All for $100.

Can you find $100 a month?