Jim Cramer’s guide to investing: Sometimes market moves are just ‘noise’

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Business,Investment Strategy,Stock Markets

CNBC's Jim Cramer warned investors about taking every individual stock move to heart.

CNBC's Jim Cramer warned investors about taking every individual stock move to heart, saying sudden moves can be arbitrary.

"When you're evaluating a stock, take your cue from the fundamentals of the underlying company. Don't put too much significance on day-to-day gyrations in the share price," he said. "Sometimes you can extrapolate a great deal from a big move in an individual stock, but more often it's telling you something you already know or it's just noise that means nothing."

While it's difficult to decipher this "noise," Cramer conceded that irregular moves can be valid signals. For example, if a company gets a downgrade and the stock doesn't plummet, it "often means that it's putting in a bottom and is ready to rocket higher,"

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