In other words, when facing sudden and unexpected events that had potentially negative consequences for the market, Cramer would step back and try to determine how those events would impact stalwarts such as Bristol-Myers.
"As far as I'm concerned, Bristol-Myers has always generated the most consistent earnings imaginable," Cramer said.
The question became, was the unexpected event so far reaching and potentially catastrophic that it threatened the drug giant. Whatever the answer, Cramer would make his moves from there; hence, Cramer's Bristol-Myers theorem.
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The Mad Money host still applies the Bristol-Myers theorem every time an unexpected catalyst shakes the market, a phenomenon that seems to be happening with great frequency, over the last couple of years.
"Given that the 24 hour news cycle now seems to blow everything out of proportion, I expect the market will face another crisis sooner rather than later," he said.
And in the event that you actually hold Bristol-Myers or some other stalwart stock, the decline may be an opportunity to buy more. "In most cases, if you step back and ask yourself 'how does it impact Bristol-Myers' I don't think you'll be inclined to sell the stalwarts," Cramer said.