The markets fell on Tuesday as the unrest in Libya—and the cut-off in Libyan oil supplies—sent the price of oil higher. These events also gave investors a reason to take profits in a market that had climbed to multi-year highs. Until the dip is done, Cramer doesn't recommend investors buy stocks.
"Who knows, Colonel Gaddafi could do more damage to the U.S. economy by the time he is done with this insurrection than all of his years as our sworn opponent," Cramer said. "Yes, Libya has that much oil and can hurt us for certain."
After all, Cramer has long said the Achilles' heel of this market is oil. Cramer said if oil becomes too expensive, sending the price of gas higher than $4 a gallon, the U.S. economy is in trouble. He's concerned that could happened given the revolt in Libya and Bahrain.
Nobody has ever made any money panicking, Cramer said. He is, however, suggesting investors use caution. If you have a gain in a particular stock, he recommends taking some profits. He also suggests buying gold. Another strategy is to buy any energy stocks that are down, as they could be in favor if the move in oil continues. Companies that help save energy, like 3M and Honeywell , are worth looking at, too.
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