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Cramer: Pros Are Making a Terrible Blunder

Professional investors are making serious mistakes in this market. And it's costing them big. Cramer doesn't want you to follow in their footsteps.

"Stay the course," Cramer said. It's as simple as that. The Mad Money host believes discipline will always triumph in the end.

That is, the Mad Money host believes disciplined investors are those who refused to let the fear of higher rates in the bond market shake them out of their holdings and second guess their investment themes.

"My philosophy is that no one ever made a dime panicking," Cramer said. "Acting emotionally, is and has been a loser for as long as I have been at this racket, and that's now spanning three decades," Cramer said.

Over the long-term, Cramer believes those higher rates that triggered selling are actually a sign that the economy is getting better and better.




Adam Jeffery | CNBC

Looking at some of the latest earnings reports, Cramer believes Corporate America has just confirmed his outlook.

"Start with ConAgra," Cramer said. "This maker of household brands like Healthy Choice, Swiss Miss and Orville Redenbacher reported an excellent number, and they gave terrific guidance. That matters because Conagra is precisely the kind of bond equivalent stock that gave up the ghost last week. People were hiding in Conagra for the 3% dividend which suddenly wasn't worth the risk given the rise in Treasury rates. But now we see that these companies can play offensive as well as defense. The fact that Conagra can rally shows that there's still hope for non-cyclical companies that can execute well."

Cramer also cited Bed Bath & Beyond. "Here's a household retailer that's closely tethered to housing. If interest rates go higher skeptics argue that housing will cool. But in this latest earnings, Bed Bath & Beyond gave you no reason to worry."

Of course, skeptics could argue that these are simply single stock stories, but Cramer doesn't think they are. "KB Homes and Winnebago also reported simply fantastic numbers, just eye-popping," he said.

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Because Cramer takes all these results as confirmation that the higher rates are a sign that the economy is improving, he believes investors should now identify companies that will thrive in a rising rate environment and then use sell-offs to establish new positions. "Look for stocks in the industrials, regional banks and technology sectors," Cramer said.

"That's a bit of a change," he admitted. "Until recently sell-offs were opportunities to buy dividend yielding stocks, REITs, and MLP's. Now, there are better buys. The industrials, regional banks and technology stocks – they should all do better in the days, weeks and months ahead."

(Click to see video)

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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