Cramer: Why It Never Pays to Panic
It never pays to panic, Cramer said Monday.
"There's always another, better moment to sell than into the vortex," the "Mad Money" host explained. "There is almost always a time, even in bad bear markets, where the chaos clears for a few days, the markets firm and you get some lift."
For more than two weeks, markets around the world were crushed. Cramer said the problem was largely man-made and involved a series of blunders by the European Central Bank, in particular, including two interest rate hikes and a failure to address profligate banks. So when European officials on Monday vowed to take action to resolve the region's debt problems, stocks saw their biggest gains in more than two weeks.
Investors who didn't panic could have profited from the last few weeks, Cramer said. FedEx , for example, reported earnings on the same day U.S. Federal Reserve Chairman Ben Bernanke last week warned of "significant" downside risk to the economy. In turn, people became worried when FedEx was also downbeat, even though it pretty much made its numbers. The stock got annilated, but Cramer said that turned out to be a great buying opportunity. FDX is now more than halfway back toward where it was before it had reported earnings.
Not only has Cramer told investors not to panic, he's also recommended they get their shopping lists ready to take advantage of this emotionally-driven market. He has highlighted a lot of high-yielding stocks and so far, Boeing , DuPont , Johnson & Johnson and others have seen big moves. There could be more moves higher, too, he said.
"Whether you bought or simply chose not to sell, you are now in the catbird seat," Cramer said. "If you still want to sell, hey you can make those sales now at much higher prices than last week. That's fine! And if you bought right into the emotion-driven weakness, you can trim tomorrow for a nifty little gain.
"No one ever made a dime panicking, but many people made gigantic amounts of money taking advantage of those who did."