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Cramer: 'We Could Go Lower'

Thursday's sell-off was the first day since December 2008, but Cramer said he still can't recommend investors get out of stocks now. After all, the "Mad Money" host has suggested selling just three times in his entire career.

The week before the 1987 crash was the first time Cramer told investors to get out of stocks. It was a good call, he said, because the market dropped 800 points from there He also told investors to get out in 2008, even though people accused him of "yelling fire in a crowded theatre." The theatre was on fire, though, and those who got out avoided a 30 percent hit, he noted.

Cramer also recommended getting out of stocks in 1998. The market had been down for days. Banks were falling apart, a contagion from overseas loomed and it seemed as though things just wouldn't hold, Cramer recalled. Unlike his other two calls, though, his 1998 was poorly timed. His call was made at the exact bottom, as the market rallied huge for two weeks afterwards.

"I don't think this moment is like '87 or '08 at all," Cramer said. "In '87 the market was so toppy, there were so many weak hands, the mechanics of the market were just awful. Worst ever. We don't have that now."

In 2008, Cramer worried if things would hold together. Nearly every bank was insolvent. He was concerned that the ATMs would stop working. Major money funds were struggling. He doesn't see that happening now, though.

"Sure, it's bad here. The market can go lower, of course. But that sell, sell, sell was based on a correct perception that we were falling apart, and we use the term Great Recession simply because nothing's been nearly as bad as what we went through then," Cramer said.

"As terrible as things are, they are a heck of a lot better than they were in 2008, and I made that sell call not all that far from where the Dow finished today. I would have to believe we could drop another 30 percent from here to do it again, and I think that we're probably more than half way to where we might be headed."

As it turns out, Cramer thinks this moment is similar to his 1998 get out now call, which was dead wrong. He thinks it seems as though a snap back is now in the cards. Another 5 to 8 percent to the downside is possible, but he doesn't think we'll go lower than that.

So what do you do? Cramer said investors should look for stocks they would have bought when things were better. Consider stocks that doesn't have earnings risk, but have been brought down by the overall market. He also likes names with yield protection. Verizon , for example, has a 5.5 percent dividend yield. Kinder Morgan Energy Partners yields nearly 7 percent. Unilever sports a 4 percent yield and recently reported a strong quarter. Consolidated Edison is another name he likes because it has a near 5 percent dividend yield and is likely to boost its dividend, as it does every year.

As far as your current portfolio goes, Cramer asked whether you've sold your bank or tech stocks. He doesn't like either sector right now, but at this point, he suggests waiting for a bounce before letting them go. Cramer would also concentrate on companies that doesn't need government help or a robust economy to make their numbers. Don't sell stocks that are close to yielding 4 percent, as they'll likely turn into accidental yielders and bounce back when the market turns around.

"The companies I'm telling you to buy now are inexpensive historically, with killer balance sheets and tremendous prospects," Cramer said. "Of course, you don't buy them all at once. That's pure arrogance, as you can't call the exact bottom. So use stages, scales on the way down.

"That's humility, and nothing is more humbling than this stock market."

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