Mad Money

Cramer Remix: The best way to play the selloff

Best way to play this selloff

Friday was a tough day with the market plunging, but Jim Cramer expected it. After all, the money managers who placed mistaken bets going into the Federal Reserve meeting had to unwind positions, and traders sold off ahead of one of the year's seasonal weak periods.

"Remember, some stocks are getting hammered simply because they need to have the Fed raise rates, particularly the financials, which happen to be the largest sector in the ," the "Mad Money" host said.

It is certainly ugly out there, and having prices fall 4.7 percent Friday didn't help. But Cramer can see that the market has a flawed mindset, where investors believe that crude has to go higher in order for the major averages to rally.

"I think you have to take heart in the fact that we avoided a potential disaster, which is what could have happened if the Fed had tightened," Cramer said. (Tweet This)

If rates rose, it could have caused major turmoil overseas and a weakening of strong markets in the U.S., such as autos and homes.

Ultimately, Cramer wants investors to be ready to do some buying for high-quality stocks at bargain levels when the opportunity presents itself. Wait for the next leg down, which won't be very deep, before pulling the trigger again.

Read More Cramer: We just avoided a huge disaster post-Fed

Reed Hastings, CEO of Netflix.
Mark Neuling | CNBC

While Cramer is in San Francisco this week, he has heard about all of the snazzy start-up companies with disruptive technologies that could possibly take over the world one day. But what about a company that is already conquering the globe?

Netflix is the video streaming colossus that not only allows for TV shows and movies to be streamed, but also creates its own original programming. It reported a fantastic quarter in July, with confirmation that it added 3.3 million new subscribers. It is also expanding its international footprint substantially, and Cramer thinks it could even take over the whole world by the end of the year next year if it wanted to.

Cramer had the opportunity to speak with Netflix Chairman and CEO Reed Hastings to discuss the current environment of the Internet, how Netflix obtained rapid success and where it could be headed in the future.

Cramer pointed out that 13 years ago, Netflix traded at just 85 cents a share; it closed at $102 a share on Friday. Hastings explained the fast growth of the company, stating "It's really the Internet. The Internet is transforming so many sectors of our economy, and we are Internet TV; and that sector has grown from very small 15 years ago to starting to be significant now." (Tweet This)

In fact Hastings predicted that in the next 10 to 20 years, all of television will be on the Internet. He added that he was willing to bet that the Internet would be a fast growing industry when he first started Netflix because he saw the incredible consumer experiences that the Internet allowed.

"We are just a learning machine. Every time we out a new show, we are analyzing it, figuring out what worked and what didn't so we get better next time," Hastings added. (Tweet This)

Read More Netflix CEO: All TV will be Internet in 10-20 yrs

Cramer is absolutely begging investors to take a break from the Fed guessing game, at least for a couple of days. And while the averages were hit hard on Friday, Cramer thinks it could have been a lot worse if the Fed had actually raised rates.

"Would it be so terrible to focus on the real prize, buying the stocks of companies we like for the long-term when they are being pulled down by short-term worries, like the ones generated by the Fed meeting?" Cramer asked.

And yes, one day the Fed will tighten when China is back on its feet and Europe is stronger. But right now, the real fear out there is that there is deflation; wages aren't going up and the Chinese government is selling U.S. treasuries like crazy.

Therefore, Cramer has declared next week to be a Fed-free zone so he can focus on the real opportunities knocking. Here are the events and stocks that he will be watching:

Friday: Finish Line, BlackBerry
Finish Line: Opportunity could come knocking for this one ahead of its quarter, as long as Nike tells a good story.

BlackBerry: Unfortunately, Cramer does not think opportunity will be knocking for BlackBerry. Cramer says to avoid to it before, during and after it reports.

So, while the market rallied and gave up its gains this week, Cramer reminded investors that it could have been a lot worse. The good news is that the Fed chatter is starting to take a backseat, so the focus can once again resume on stocks.

Read More Cramer game plan: No more Fed! Opportunity knocks

One stock that managed to go higher on Friday was Workday, the cloud-based provider of software for human capital management, payroll and financial management.

Essentially, Workday gives companies the applications they need to automate many of the non-revenue generating back office functions, allowing them to save money.

Workday's stock has taken a hit lately when it was crushed during the selloff in August, and then again at the end of August when analysts were concerned about it's weaker than expected billings guidance. However, Cramer thinks these fears were overblown as the numbers didn't reflect a change in the trajectory of the business.

To learn more about where Workday could be headed, he spoke with CEO Aneel Bhusri.

"I think Wall Street derives too much from calculated billings, because terms change from quarter to quarter…We feel like we are going to have a very strong second half of the year," Bhusri said.

In the Lightning Round, Cramer gave his take on a few caller favorite stocks:

Priceline: "I think Priceline is the kind of high-dollar stock that people are selling in this environment. I want to buy into it as it comes down in stages, not all at once."

ConocoPhillips: "In a market where the oil stocks are down we have to buy the highest quality, which Conoco doesn't count. I would much rather see you be buying EOG, the growth stock that my charitable trust owns."

Read More Lightning Round: Buy into this stock being sold