constructive, i like amazon calls and the line the other is eem, a great setup to press to the down side. >> have earnings next week that will be big who knows what happens on the trade front, tweets and interest rates d erhianevytng that doe my mission is simple to make you money. i'm here to level the playing field for all investors. there is always a bull marquel so -- market somewhere and i promise to help you find it now. hello, i'm cramer. welcome to "mad money. welcome to cramerica my job is to entertain, and teach you call me or tweet me @jimcramer. toughdays don't last forever but when they come along, you need to know how to respond you need a game plan delivered

and ready. i wish i could say that we always know how to respond, but the early days of the decline, well, they are never easy to navigate first, let's borrow a line from the fabulous all happy rallies are alike. each sell off is happy in its own way. bull markets send it off higher and most think they are genius for participating. it seems easy. big declines, much harder because they could be the start of a bear market they could be just the beginning of something unfathomable or might be a glitch. that's why i want to use history to try to identify some of the common qualities so that you can figure out how to handle these ind moments of weakness without panicking. let me offer words of relief, sanity and real, not fee knn pht

real assurances. there are two truly horn rrendo sell offs, the crash of 1987 and the rolling crash of 2007 to 2009 i could have done the nasdaq crash but the s&p held up well let's deal with these two big ones, though, head on. because these two declines are great examples they are polar opposites of each other. on october 19th, 1987 the dow fell 22% in a single session 22%. i was trading there day. even as the previous week was one of the worst weeks in market history. monday hit vast and it hit hard. it was almost as if there were no buyers to be found from dow 224 where the crash started to dow 738 where it ended that day. it was selling off right into the close. i remember thinking saved by the bell except it felt like there weren't many left to be saved. but most people don't remember

is i mentioned that the week before was onemarket's worst weeks ever it plunged from 2500 to 2245 that encouraged bargain hunters and turned out to be classic bad money in retrospect because they could flip monday morning into strength and that strength never developed. in fact, the weakness they were buying occurred the next day into what became known as terrible tuesday where the dow actually kind of just broke down. the market simply stopped functioning. but, you know what i was there and actually able to calculate that bottom, the actual bottom that occurred and it was around dow 1400 off another 338 points from where the market closed on black monday then fed chairman allen green span stopped the decline when he said he'll have all the liquidity. i remember the green line on the screen he listed around wall street to

put in the bottom and the remarkable staged a two-day rally that took us up 500 points the effects lastedthree months it took almost 167 mont months the averages returned to the trading before this breakdown. the bear market began 2007 totally different. the dow fell and didn't bottom until march 9th, 2009 when it landed at 6,547. we didn't return until march of 2013 why did one sell off end so quickly and the other took six years to unwind? that's the question that defines two extremes the initial black monday was a mechanical sell off. it occurred because the stock market failed to be able to function it's constunecticu constructive black monday the flash crash of 2010 and dop -- dop l ganger most of them are wrong

all three started with a stock market futures, the s&p 500, futures in chicago overwhelming wall street, new york where the stocks underneath are traded black monday happened because stock traders didn't understand the power of the market that could flood with instant unseen supply these days we accepted the futures are worth watching but it wasn't like that back then because they were relatively new instruments founded five years before the crash the power snuck up on the people because they were initially a much smaller market than the stocks themselves. because of the great liquidity, the ease portfolio managers can go in and out the most powerful drivers of stock prices and more power of the of the performance of the underlying companies stocks are meant to represent. underlying companies, earnings meant much more but it's the future with the relatively new impact of futures, black monday was unusual. we had a big run going into '87.

remarkable multi-year rally with substantial decline and don't i know it? i left gold mman sachs because y returns were bountiful a group of clever sales people started selling what they claimed were insurance policies that could lock in gains and stomp out losses for big funds so-called portfolio insurance involved what was known as dynamic hedging, it sounds so dynamic hedging where the specialists said that using futures, you could ensure you would no longer be exposed to stock market risk, whatever the policy took out. the idea is they would let you sidestep the -- i have to laugh. sidestep the loses it's impossible to do that much like communiscommunism, po are well worked in theory but doesn't work in life the insurance didn't work. if anything, the future selling from the insurance accelerated

the decline and caused inkre incredibly large losses. the people that sold the policies were never exposed as such other than just now but that's exactly what they were. there is no magic trick that can get the returns from investing in the stock market without much of the risk. don't believe anyone whoever tells you any different. of course, at the time, we didn't know that the power of the futures could cause a crash. we figured where there is smoke, there is fire. at the markets crashed, there has to be something real wrong with the economy there had to be a recession lurking. there had to that's what we told ourselves. wrong. the economy was strong going in the '87 crash and strong coming out of it. there just wasn't any economic correlation with black monday at all. it was the web between chicago and new york that set off the congregation and when the treasury department what happ examined that day, it occurred the future set off so much

selling, some specialist sell offs on the floor of the exchange and broke rage houses stabilized they were supposed to do it and treasury found many different do their job. i was fortunate enough to be in cash black monday having li liquidated because the market was acting so badly. it made my career, for the next 14 years, i could show investors i sidestepped for real they thought i was a genius. the truth is, i was frightened of the market and wanted to regroup, but as i never am tired of saying, it's better to be lucky than good. here is the bottom line, sometimes crashes have nothing to do with the economy they are caused by the mechanics of the market. stay tuned for more examples of this kind of decline and the more serious side of the bear market of 2007, to 2009 so you

can figure out what to do when it happens let's go to keith in texas, keith kei keith? >> caller: hey, jim, how are you doing? >> well, how about you >> caller: pretty good how do you decide when a correction like we had back in february made a bottom, and it's okay to get back into the market >> well, what i like to do is i like to see, try to get a sense on whether the selling has run its course and what it takes to do that is to be able first, you get a level where it bounces and then it comes back and it tests that level if that second test as we call it holds, then it's more than likely you have to come back from the sidelines and -- >> buy, buy, buy. >> sometimes crashes have nothing to do with the economy but mechanics of the market. knowing how to respond is essential to your money. on "mad money" tonight, my sell off strategy session continues don't miss my take on the micro

crashes that made me short but could have lasting effects on your view of investing you might know chicken little and the boy who cried wolf from fairy tales but they play a role in the market. is it always the fed's fault not always the rational reason the market declines with the central bank so stick with cramer >> announcer: don't miss a second of "mad money." follow @jimcaa mrramer on twitt send jim an email to madmoney@cnbc.com or give us a call 1800-743-cnbc miss snomething miss snomething head to mad mun dmoney.cnbc.coam tell him we're flexible.

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here, hello! starts with -hi!mple... how can i help? a data plan for everyone. everyone? everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh. sure, why not? how'd he get out?! a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today. welcome back to a special how to deal with all sorts of declines in addition to "mad money. we covered the crash of '87 and how it wasn't really related to the economy.

shocker. 1987 took time to reveal itself, but when it did, oh, la, la. it was the first instance of the s&p future exercising their power over individual stocks they were like play things, the stocks sadly, it was the first of many flash crash of 2010, one of the negative moments that drove away so bk to stocks because they didn't know their value could be destroyed so quickly, almost whim s wh whimsical. who wants the stocks that can blow up in the blink of an eye happened the futures overwhelmed the stock market and buyers walked away betting there had to be something substantive behind the obstruction. it couldn't just be machines breaking down for heaven stack it started at 2:32 p.m. in may and lasted for 36 minutes. the dow fell almost 1,000 points

from roughly the 10,000 level. i was memorable for me because i happen to be on tv at the same time some money managers had been speculating that the market was going down because of riots and it was on everyone's mind buzz there is endless worries and hammering what would happen if the greeks defaulted on bonds and others on new found weakness in the economy for the record there really wasn't any because i had the benefit of trading on black monday, i recognize what it was and when it was happening. another situation with overwhelming stocks and machines were breaking. we didn't know it at the time but a gigantic error in sell order caused tremendous fear that spread like wildfire and they didn't want to wait around to find out what was causing the landslide. they just wanted to get away from it as fast as they could. on air i called it a phony sale off. it made it a tremendous buying opportunity. >> what we're seeing right now, i mean, maybe i believe maybe

i'm pressing -- >> it can't be there that is not a real price. >> too bad the system obviously broke down. >> we're trying to get the specialist -- >> there was a glitch in the tape and machines failed and obviously broke down. >> it broke down. >> the market didn't work. it broke down. the machines broke down. that's what happened. >> it didn't work. the machines broke down and that's what happened more on that later some listened and bought stocks, we'll talk about that, too many people simply didn't believe equities could be that fragi fragile. it was shocking. in all the years i've been doing this show, i hope i taught you stocks were not hard assets and whims that could reduce value in a heart beat including mechanical issues like those that happened during that 36-minute sell off it gained equbut not before asst members left the class entirely and never came back. okay how about the august 2015 sell off where the dow fell 1,000 points at the open

that was related to fears that the fed was itching to raise interest rates into the weakness and after what was happening in the chinese market, not our market as the chinese market had fallen more than 8%, many seem to forget but back then the why nie - chinese market was dominant and they fretted the prc could collapse from too much leverage and too little liquidity somehow i find myself on air at all the right times to witness these vents. it had been an ugly day as a fed official late in the afternoon had suggested it was time to raise rates despite the chinese sell off it was an aggressive statement that dem strike thonstrated a cr attitude towards the market's mood on monday, august 24th we heard there were very large orders and places for major stocks. we weren't ready, though, for the gap that we saw. where big capization stocks were

shedding hundreds of billions of dollars of value with many with 20% down like the crash of '87, it was tough to tell what the real prices were, the confusion was that horrific. the fog of war the fog of trading the dow tallied a decline of 1,000 points when the smoke cleared at 10:00 i haand my partners were stymied at the time. i remember turning to david to chat in the midst, his reaction priceless. >> the dow is down 1,000 points. and the losses on some of these names, u and h, verizon, ge down 13%. >> i don't -- this is -- i got to make some phone calls because these are -- >> yeah, you got to find -- >> these are enormous moves. >> i got to make some phone calls. i mean, i remember when he said -- i said yeah, that's it i got to make some calls

that's how confused we were. again, we figured there had to be something you get the decline. that would be something going on in the economy, somebody knew something we didn't. something mysterious something other worldly. something like maybe china collapsed. maybe something occurred in europe where the economy was still fragile. i was suspicious. especially the bioteches, which for some reason declined harder than the rest of the market. think about that that shouldn't be happening if there was something wrong with the economy, that's when people buy. those stocks are in the safest when the economy is at work. i suggest there is machines that were causing the problem that the future would overwhelm the stocks and that the commuters, they had gone haywire. by mid morning we learned that was exactly the case and the stock market then underwent a beautiful metamorphosis rally jumping 50 oc0 points from the

bottom strong buyers took advantage the economy was gaining strength, not losing it. a thoughtful fed wasn't about to tighten. not with china teetering it was an excellent time to buy stocks why was there such fear and confusion at the 2010 and 2015 mini crashes i think investors weren't ready for either flash crash because post 1987, the government put in what are known as circuit breakers they were supposed to cool these declines by stopping trading momentarily but created a false sense of security that oddly exist today as they fail to work properly on both occasions so please, when you hear talk of circuit breakers, no, don't believe it fear can't be legislated or r regulated out of the market. it will always be there. there will be people that react horribly after an initial event. so what's the bottom line here

if you can determine if a sell off is caused by the mechanics of the market breaking down, you might have an incredible buying opportunity. you have to figure out whether the sell off is related to the fundamentals of the economy. if it isn't, stay tuned. recognize you have a first-class panic and nobody made a dime panicking but boy, oh, boy, did they coin money taking the other side of the trade. we're going to go to jeff in florida, jeff? >> caller: your majesty of "mad money" it's an honor. >> very kind what's going on? >> caller: here is my question, jim. is there an equation, formula, rule of thumb, anything to indicate when or what percentage of profits to take off the table when really good gains are up for grabs? >> you know what i have had, you know, the show is influx at all times i try to measure these things and what i have come to realize is i used to tell people when

things were really bad, look up 25% take some off the table but for actionalertsplus.com, what i learned is you have to be more patient. when you have a good stock, it goes up 50% and take some off and then 100% then you take out that basis, how much money you put in and let the rest ride i'm not as anxious to trade or recommend trading as i used to i like longer term investing the situation is long. nobody panicking if the sell offs are caused by the mechanics of the market, you may have an incredible buying opportunity. the market is falling. the market is falling. more than a nursery rime we can teach you about investing and don't get fed up, i'm breaking down the fed reserve's role in the market and a sell off versus a buying opportunity, the key of telling the difference is something i like to call systemic risk. stay tuned, i'll explain and stick with "cramer."

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here we are discussing what to do in a sell off. >> sell, sell, sell. >> what how to figure the right approach given how difficult and different they all are we covered the crash of 1987, an example of one of the most horrific and quick declines imaginable and yet, there was no economic ramification whatsoever many thought we had to be on the verge of a recession because the stock market projects what is supposed to happen in the future kind of an early warning system but not that time. it was a sell off full of sound and furry that signified nothing. same with the two flash crashes that we've been through 2010 and 2015 the sell off in 2007 to 2009 that was the opposite. it was a multi year decline that started when the federal reserve

raised rates 17 times in log step trying to cool an economy that had already long since cooled off it's the most dangerous kind of sell off what we call decline and we have to spend time on it. it doesn't happen often. twice in 80 years, the first being the great depression unfortunately, every time we have a severe couple day decline, we hear this great recession bear market invoked. lots of investors scurry out if the sky is falling and don't come back and we lose money and it's breaking my heart here. back in october of 2007, the stock market peaked at 14,000 when the fed raised rates 17 times in the economy after teetering for a bit fell off a cliff and took the stock market

with it. it's a thing you could have seen coming if you had paid attention, done a lot of talking and homework or at least paid attention to me. when back on august 3rd of 2007, knew the fed would continue to raise rates ocho bblivious to t damage it was doing to the real economy. my people have been in this game for 25 years and they are losing their jobs, and these firms are going to go out of business and he's nuts. they are nuts. they know nothing. >> cramer. >> i have not seen it like this since i went five bid for half a million shares of citi group and got hit in 1990. this is a different kind of market and the fed is asleep. >> okay, but here is the thing -- >> bill pool is a shame. he's shameful. >> they know nothing they know nothing. they know nothing. >> excuse me what did i mean by that? shortly before i came out to the set that moment to be interviewed by my old friend

rain burnee erin burnett, i was talking to one wall street firm about problems in the mortgage market. everyone that followed the market, which important to the economy knew there were unsound practices occurring but jarring when i was told by this executive he couldn't believe how many people are beginning default on mortgages and how many of the 2005 vintage he used a term that i really before only associated with fine wine weren't good something only had happened once in our country's history and was never supposed to happen again, the great depression i had a lot of friends and firms so i started making a lot of calls. i wanted to see if the 2005 vintage thing was in trouble everywhe everywhere i got off the phone and the problem seemed to be spreading like wildfire, mortgage bankers and guys that ran firms. everybody said that's why i went off so strongly on my rant

the fed didn't listen. especially bill pool at the time was an important fed official that i had to single him out when i fed out the transcripts were released, my rant was brought up and the fed had a hardy laugh about it we then had a series of horrendous defaults, some thought to be too big to fail and failed anyway including the largest loan and two of the largest and most favorable br e broker houses. i went on "the today show" to tell them to take it out of the market unless it be lost whatever money you may need for the next five years, please, take it out of the stock market right now. >> i don't think many listened and the market fell another 40% before it bottomed

if you had bought any time from when the stock market peaked to cut in half by march 9th, 2009, you did lose a fortune so how do you know to avoid buying this kind of dip? isn't that what we need to learn? how do you avoid this dip versus buying the black monday opportunity of '87 you have to ask about the economy. is business really getting crushed? is employment so important when considering the direction of the stock market falling off and falling off hard is the fed standing pat or raising rates when there are signs of real cracks like major if i weres firms going wou ing under. are there runs on financial institutions in the country? if the answer is yes, you have a decline that could be deeply rooted and joined at the hip with the real economy and that has what i mentioned is systemic risk meaning the whole country could collapse that's how it was back then and

why i get angry when i hear people say this is goes to be as bad or worse as 2007 or 2009 when there is of course, nothing like that occurring because like i said, only twice in 80 years you don't expect risks to continue to happen that's not the way it works. if there is anything in place that can save the economy or turn turn it around, that's important too and try to institute rules, in a of those mattered what brought the market out of the funk was the statement by ben bernanke that he would not let any more banks go under in our country. before that we watched as the fed indicated they were unable to stop anything dra mall tick fr -- dramatic from happening. a bottom was put in. were there ways to spot the bottom i have a couple signs. one i monitor is the standard

oscillator that's a paid subscription product i get updated after the close of trading every day it measures buying or selling press skpur gure and get a minue and ten you got to do buying we were getting sales much worse than that a sale it was time to buy. another way to look at it, i like to see who is pessimistic or relying on stocks and changing his tune. the best example of that switch came from the late, great make haynes who had this to say bac out on a limb here. >> hold on we've been waiting for this. >> i think we're at a bottom i do. >> march 10 of 2009, the day after bernanke was on "60 minut minutes. it bottomed. it was that much of a contrary call i made sense to sell what i said to sell but before you say what

happens if no one warns you again the next time? i've got some good news for you. it's a little sobering but good. if you waited long enough, six years to be exact, you actually did get back to where you were before the bear market began all right. six years. but if you had sat tight, you did get back to even and since then of course you made a lot of money. yes, it would have been better to take something off the table but a reason i'm always, always, always stressing it might pay to sit tight if you haven't sold in the worst stock market and economic boom of our lifetime, we still did fine if you bought and held here is the bottom line. be ware of the chicken littles of the world and mindful there are tons of people who cry wolf every time we're down for a couple days. but then again, there has been one time where it paid to actually sell. when there was real systemic risk unless there is again, it's okay to do selling but otherwise maybe just sit tight and wait for those signals to buy

don that in pennsylvania, donna? >> caller: hey, jim, my husband watches you all the time and really trusts your opinion. >> fabulous, fabulous. >> caller: i want to invest $5,000 for my grandson's first birthday for him to use for college or a down payment on a house when he gets older i know it's a volatile market, and i want to invest long term but i want to be defensive against sell offs. what's my best way to go >> we'll divide that $5,000 into $1,000 each time and put the $5,000 in, $1,000 at a time, why don't you do this? wait every other month, $1,000 say january, $1,000 in march when you do get a big sell off in the interim, put all of it in that's left at once. that's my rule and worked for me literally since 1979 let's go to jacob in florida,

jac jacob? >> caller: hey, mr. sccramer i'm calling from tallahassee. >> let's go for barbecue. >> absolutely. when there is a bear market and i have a stock performing well consistently in the past, what factors did you look at to decide whether to get out of hold on to it for the long term? >> in the end, it's going to come down to a bear market we'll look at come opinion knees wi -- come opinion knpanies with e balance sheets sellers be ware of the chicken littles unless there is sis ty i risks and then, they got covered all the ways to sell off my strategy session continues and i'm taking your tweets so send your questions my way and of course, stick with cramer

in tonight's special survival guard, we're discussing how to deal with brutal sell offs how to defend against them and take advantage of them

i've told you not to be glib about the systemic risk that involve the collapse of the u.s. economy. but those are easy to spot because it will seem like the world is falling apart like in 2008 i want to help you gain theless dangerous kind of crash, the mechanical kind caused by a broken market in a healthy economy. the best way to deal with the sudden declines is to recognize there is a bottoming process, one you can spot what should you do i like to look for accidently high yielders. i used to call them ahys on the show they are doing fine and have good balance but stocks have fallen so low, their dividends are giving you an outstanding return how do you spot these? i like to look at the historic level of yields you've gotten from certain stocks and the rate, the ten-year treasury gives you. if they yield 2% and pay double because of a market wide decline, that means the stock

went down then you're probably looking at an accident high yield. as long as the stock has been going down for no particular reason, that's why i like to look at companies not sensitive to the economy if the level isn't constructed or giving you opportunities, i use in mechanical sell off to pick stocks you like and begin to buy them using wide scales. that's what i recommended during the 2010 flash crash pick one of the best stocks out there or premiere stock, and buy some using limit orders only don't use market orders because you might end up getting terrible prices. you should never use market orders but it's especially stupid during a crash. i like this method because if the market does come back as it did in two flash crashes, you picked up terrific merchandise in amazing prices and flip the stocks for big profits or hold on to them take a look. i demonstrated how to do this in the flash crash of 2010. >> 49 and a quarter bid for 50,000 if i wrote my hedge fund.

this is a good opportunity. >> that name -- >> i walked out at 61. >> when i walked out it was a 61 i'm not that interested in it's at 47 that's a different security entirely what you have to do is use limit orders because proctor jumped seven points and i liked it at 49 you have to be careful. >> that's the craziness i'm talking about and a lot of people ended up doing that trade. i always feel good remember, the limit order still rings true we covered how to recognize systemic risk and sidestep it and profit from mini crashes how about the garden variety pull backs those are the most common types. what causes them a bunch of different varieties first, you've got sell offs caused by the federal reserve, probably most important because they are top of mind and that's the most frequent reason there is a reason they tal when the economy is weak, the fed has to try to restore growth every decline is viable one

unless there is systemic risk. when the economy is strengthening and perhaps over heating, the fed has a different mandate and in an extension, the job is to temper growth to stop inflation and the purchasing powers of individuals so the dollars by fewer and fewer of goods and the savings are less likely to cover needs. we don't want the fed to break the economy, the break kind like it did when it raised rates 17 straight times going into the great recession. there are plenty of times the feds tighten and the stock market wasn't crushed because the economy wasn't crushed, however, when the fed tightens, some will come out of the wood work to tell you the market will crash or take a big header it's inevitable. when you hear or read the comments, do not panic fed rate hikes don't necessarily lead to crashes. i see plenty that do next to nothing. there are reasons they should and does go down when the fed

raises rates first, stocks are only one of the assets available to individuals. there is gold. real estate, of course the bonds. i like gold as a safe haven and believe every person should hold gold but if not, then the hedge against inflation but otherwise, as we've seen, gold isn't able to protect you against much in the last two decades a hedge against a catastrophe that hasn't occu be a good hedge but mos don't have the money we have real estate investment trust but not reliable as a proxy. finally, we have bonds they are the source of the problem when the fed raises rates. as the fed tightens, bonds particularly short-term become more competitive as the fed jacks up rates, high-yielding dividends are among the worst. because their yields lookle les attractive

please be careful of these stocks as safe havens when the sell off is caused by the fed. they are very different from accidental high yielders that can spring back when the fed is tightening the second reason why stocks can go down legitimately when the fed raises rates, because the fed isn't perfect. i keep talking about the 17-step rate hikes because the fed isn't perfect. the fed kept tightening and tightening long after it should have stopped they have raised rates when they should have stood pat because the economy is slowing or even cutting rates fast because of what was going on underneath when that's the case, sell offs can materialize going into the fed meeting and the pain will continue after you get that pull back and you know you need to be extra careful not to be aggressive buying any stocks especially defensive high yielding bond market alternative stocks are not going to work. here is the bottom line, garden variety bupull backs can be gagd but sell offs and fed raising rates, those are trickier but

can lead descend opportunities if you stay away from the high yielders and stick with the accidentally high yielders that might just give you that delicious bounce when the fed is done tightening. "mad money" is back after the break. - did you know that americans that bought gold in 2005 quadrupled their money by 2012? and even now many experts predict the next gold rush is just beginning. so don't wait another day. physical coins are easy to buy and sell and one of the best ways to protect your life savings

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tonight we're talking sell of offs many times the problem is the fed as i mentioned before the break but issues that are important. for starters, there is the issue of margin. as a former hedge fund guy, i'm well aware that will are many times when money managers borrow more money than they should so when the stock market goes down, they don't have the capital to meet the margin clerk's demands. these margin declines have happened repeatedly including in the beginning of 2018 when funds that had borrowed money to bet against stock market volatility, the so-called vicks got their heads handed to them betting the market remainedcalm stupid

people and bought the s&p 500 using borrowed money again real stupid when the stock market female they were forced to sell their positions. there were so many managers doing this once their selling caused severe market wide losses these break downs often occur after several days where the market is down that's why i'm often reluctant to tell you to be aggressive in the first few days of a big decline because there will be margin clerks against managers that are buying stocks with borrowed money they have to keep chomping how do you spot the declining and when they will be over margin clerks don't want firms to be on the hook for over stretched vibindividuals or hede funds and put up, raised in cash and sell you out of your positions without your say so. i always consider the margin clerk the butcher and butchering occurs between 1:00 and 2:00 if the selling runs its course by 2:45 p.m., i find it to be that specific and you have a descent chance to start buying

safety stocks, the stocks that tend not to need the economy to be strong in advance, to advance like the health care stocks. you might also want to buy the stocks with the fastest growing companies with great secular themes that work in any environment. what else can create viable opportunities. sell offs overseas i can't tell you how often i heard commentators because of imported worries from greece, mexico, i tell you to ask yourself do they impact the stocks of the american companies? do you see any real impact do you want to pay dramatically less for an individual stock usually the answer is no unfortunately, you can't start buying hand over fist. you should assume there are people that don't understand how unimportant the worries are and of course, these people will sell everyone panic sell after you would have thought that they know better.

that's why these declines last for three days the best way to figure out if there are done is watch the clock as the sellers need to be margined out at the end of the day, stock markets are the first and foremost and markets are controlled by supply and demand. if the bankers start rolling out lots of new ipos and sell more shares via secular offerings, there could be too much supply and not enough demand. avoid the blast zone, the area where most of the ipos are concentrated and focus on stocks down because of collateral damage sometimes we get declines because of the earnings. be nimble with these buy after earnings and pull back and isolate them and avoid them. there is no reason to be a hero here, people instead, buy stocks hit by much broader selling that have nothing to do with what went wrong and the trickiest risk, political risk i often find this risk

tremendously over blown whether it's because of strife between parties or policies or even all out war with the exception of nuclear war where money should be the last thing you're worried about. i'm not a political guy and i hate talking about this stuff but with every stock you own, you have to ask yourself does this company have the risk with washington if not, you've got nothing to worry about, however, if you own something directed by a trade dispute with china, government shutdown could turn into a house of pain. political risk is negative and fearful because there are so many pun dandits everywhere, th want to scare you. my suggestion, tune it out look for companies that have nothing to do with political fray i can't tell you how many times since 1979 i've seen politics used as a reason to sell stocks. they may be a reason to sell some stocks but rarely is it enough to sell everything. here is the bottom line. there are all sorts of sell offs but unless they involve systemic

risks, they will be buying opportunities. note the signs that it might be subsiding and take action to buy, not sell, and never to panic. stick with cramer.

you know me. i always say i have the smartest audience in television let's get to tweets. first up, hi, jim, i am in a

little dilemmas. my mad money is 95% allocated but i know i should have more cash i don't want to sell at the bottom what should i do thank you in advance this is really important do not sell until we get some lift i know that a lot of people feel there will never be lift, there always is. and then after the second day you sell at the open next up, a tweet from todd hey, this kid could be mini you #cramerica, #mad money. >> hey, i'm cramer welcome to "mad money. welcome to cramerica some people trying to make some friends, i'm just trying to make you somem @dave 1975 trucking with the jim cramer and audio book that's gotten loath of use i get something out of it every time thank you so much. i cannot believe how hard those

audio books are to read. that took me about four straight weekends and a lot of nights i'm glad you're getting something out of it. a tweet, can you talk about how rule number one bulls make money, bears make money, pigs get slaughtered applies to my s&p 500 index fund it been a long run if this is bedrock money for retirement, you do not touch it. if it's money to put away for kids, you do not touch it. for school, do not touch it. i'm talking about "mad money" that should be traded and taken some off the table, not that basic index fund that's to be run for as long as you can stand it stick with cramer.

i like to say there is always a bull market somewhere and i promise to find it here for you on "mad money. i'm jim cramer see you next time.

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