Cramer: How words of wisdom from Gene Hackman help me make peace with investing mistakes

Breaking news from the markets: Editor's note: This is an excerpt from the CNBC Investing Club's August Monthly Meeting, which was held Thursday. In his own words, Jim Cramer talks candidly about two big stock mistakes and what the late Hollywood legend Gene Hackman would have said. Jim recalls how Hackman was a client of his hedge fund, and how he leaned on the actor over the years for his advice.

Those of you who have known me the longest understand that I am far more concerned about avoiding mistakes than I am about getting things right. Winners take care of themselves. They throw you off your game.

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They can detract from performance. They can wipe out your gains. You manage your profitable positions, terrific.

If you fail to manage your losses, you can be history, as we found out earlier this summer with Situational Awareness, a wayward hedge fund that blew up from a lack of discipline and a dearth of judgment matched with no risk controls. I study every mistake over and over to be sure that they never happen again, and we avoid the fate of Situational Awareness no matter what. Sometimes, though, it doesn't matter.

I would like to, as a prelude to this meeting, talk about two mistakes for which you deserve an explanation. I am always conscious that when I started this project with my Charitable Trust, as a real portfolio to teach people how to get rich, more than 20 years ago, it would only be successful if I swallowed my pride and let everyone see — open-handed — what I was doing ahead of when I actually committed the money. I knew I would make mistakes — and unlike a hedge fund or mutual fund manager, I would not be able to hide them.

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You can never learn from those kinds of managers. They don't want you to learn. They just want your money.

I, on the other hand, don't want your money. I want to be your money coach. I want you to be better than I am at this business, and I want you to make more money than these paid managers can do for you, and do so, in part, with individual stocks.

I encourage individual stocks because they can — and have — made fortunes for Club members, whom I hear from almost every night. It should be no secret that I could make more money if I went back to managing money professionally. This task is more important.

Financial markets are tracking the development closely as investors assess the likely impact.