You aren't supposed to make money buying low-dollar stocks. Yet in the past year, you've made a killing if you did so. That's right, if you bought a series of highly visible below-$5 stocks, you made fortunes, and I regard the moves as verification of my theory that everyone should have a speculation play in his or her portfolio, because it can keep you in the game by making the process intriguing and because you can make huge profits if the story pans out.

Specifically, check out these gains. If you bought Sprint Nextel (S) in May of last year at $2.30, you have now much more than doubled your money. If you had purchased Clearwire (CLWR) at $0.91 as recently as July 26, 2012, you caught a triple after Sprint bid for the company. Those who had the guts to buy Supervalu (SVU) -- I know I didn't -- at $1.80 back in October 2012 are verging on a double after the investment made by Cerberus that was announced this morning. And finally, if you had taken a chance with Nokia (NOK) back in July at $1.69, you have more than doubled your capital after the company announced its sharply better-than-expected​ earnings last Thursday.

Frankly, even I, a huge supporter of speculation, am astounded at these gains. Just astounded. How could you not be? In every case, these companies were thought to be on the ropes. Yet it turns out they all had more value than we realized, although the value was obscured, typically, by weak balance sheets.

Sprint, Clearwire and Supervalu had been burdened with huge amounts of debt, so much that their solvency was in question when we hit those amazingly low prices. But Softbank took a look at Sprint after it had successfully re-energized its business under super CEO Dan Hesse and liked it enough to buy a huge amount of the company.

Clearwire, as tattered as its balance sheet was, turned out to have extremely valuable spectrum, so valuable that even though Sprint decided to buy the rest of it with the money Softbank gave it. Charlie Ergen, a maverick businessman and chairman of Dish Network (DISH), has been drawn into the bidding for the company, perhaps to get some of that spectrum that is in such short supply and is so needed for additional cell-phone service.

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Supervalu is, in the end, one of the largest supermarkets in the country, with some of the best brand names in the business, brands such as Acme, Albertson's, Cub, Jewel Osco, Lucky and Shaw's Star Market. These are all terrific places to shop and are often loved in their communities. The problem was the balance sheet, and with rates low, a private-equity outfit like Cerberus can leverage its balance sheet to fix the real problem, which is too much debt.

Nokia? Turns out that big expense cuts coupled with a hot, cheap smartphone were enough to get the company to report sharply better-than-expected​ numbers.

Now, you could have two different takeaways here. One is that you might say, "Terrific, Jim, you lost a fortune before you were able to get a fraction of your money back." I bridle at that, because fortunately, I disliked all of these on the way down.

Second, though, is that you could correctly argue that I stayed too negative, not liking Supervalu and Clearwire at their lows, thinking the bond holders would end up with their companies. But I did manage to nail Sprint and did say it was way too late to sell Nokia.

I know some of you are probably thinking right now that you should be buying other down-and-outers, like RadioShack (RSH), Best Buy (BBY) or Hewlett-Packard (HPQ). My take is that as with Nokia, there's no reason now to hate Radio Shack. Too low. Best Buy? Still falling. And Hewlett-Packard, I would rather be a buyer than a seller at this point.

The moral of the story: Speculate. It can work. And from Sprint, Clearwire, Supervalu and Nokia, I can tell you that it works much bigger than even I could ever dream.

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.   

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