Jim Cramer wants investors to start preparing for the inevitable. Friday's terrific employment report made it very clear that the Federal Reserve has no choice but to raise interest rates at its next meeting in December, and rate hikes are not good for a vast majority of the stock market.
There is one sector that will do better when the Fed tightens, and that is the financials. This is because when rates go up, banks will make more money from customer deposits.
That is why Cramer turned to Tim Collins, a technician and colleague at RealMoney.com, to take a look at what the charts have in store for financials going forward.
Collins was worried when he looked at the relative strength index, or RSI, which is an important momentum indicator. The RSI for financials has been hitting high levels since mid-October, but, currently, it looks like it could be close to breaking down. If the RSI breaks down, Collins fears that the XLF, the S&P financial ETF that contains all of the big banks, could follow it down.
Ultimately, Collins thinks that the XLF could trade sideways, between $23.75 and $25 for a while.
"In short, the daily chart of the big Standard & Poor's financial ETF is not looking as hot as we might expect, given that I think the banks are about to become some of the sexiest stocks imaginable," Cramer said.
Believe it or not, Cramer is an optimist by nature. If there is one key attribute he thinks successful investors will need when the Fed tightens, it is being an optimist. Maintaining a positive and skeptical stance will make everyone better investors.
"You need to have faith that things can be good for a long time or even get better than they are now. In other words, you have to bet on progress and on discouraging or middling days like this one," the "Mad Money" host said.
And while some may think this type of attitude is obnoxious, Cramer does not. The Fed is getting ready to raise rates, and each rate hike coming will test an investor's ability to stay in stocks. Each hike will make stocks more risky to own, and a positive bias will allow investors to find the stocks that can still do well in a more difficult environment.
With mid-November feeling more like summer than fall this year, Cramer wondered what to do with the stock of a high-quality off-road company that makes snowmobiles.
That seems to be the conundrum of Polaris the big manufacturer of all-terrain vehicles, and motorcycles, with its stock down more than 25 percent year-to-date. Cramer thinks this could be because some of its key end markets such as agriculture and energy are in a rough spot.
But could the stock be down so low that it now represents value?
To find out how it can turn things around, Cramer spoke with Polaris Industries Chairman and CEO Scott Wine.
"I feel like if we are going to get Polaris back on the right track it really has to do with entrepreneurism … and that is how we try to run Polaris. To try to create opportunities for everybody to make a difference in the company," Wine said.
On Tuesday, yet another analyst released a report that managed to take the stock of the world's largest company down 3 percent. Cramer has seen this happen many times and still maintains that it is better to hold Apple than trade it.
According to analysts at Credit Suisse, Apple has cut up to 10 percent of its component orders due to weak demand for the iPhone 6S.
However, Cramer has seen in the past that analysts frequently make these calls based on weak supply chain data or negative channel checks. This kind of data will prompt investors to dump the stock, and then buy it back later when it turns out that the story was wrong or the narrative changes.
"In short, judging Apple based on these channel checks from its suppliers tends to be a mistake," Cramer said. (Tweet This)
With the Fed about to raise interest rates, Cramer thinks it is time to circle back to stocks that are part of a powerful secular growth trends that won't need a strong economy to put up great numbers.
One of those companies is WhiteWave Foods, the maker of organic milk and plant-based, non-dairy alternatives like soy milk, almond milk and cashew milk.
WhiteWave reported a fantastic quarter on Monday, beating both top and bottom line estimates. The stock jumped nearly 5 percent on Monday, but came down a bit on Tuesday. Cramer thinks any weakness should be considered a buying opportunity.
To learn more, Cramer spoke with WhiteWave's Chairman and CEO Gregg Engles.
"In terms of the total company, we are in the single digit territory in terms of our natural channel sales. So we are really a main stream food company in terms of brands, and we run big brands that we market to consumers," Engles said.
In the Lightning Round, Cramer gave his take on a few caller favorite stocks:
Stryker Corp: "I think Stryker is very, very interesting here. The medical device group is good, but I do prefer Edwards Lifesciences Corp more than Stryker."
Johnson & Johnson: "Johnson & Johnson is good and going higher. I have to tell you my charitable trust sold it too soon because we decided that we wanted to have a little more extra and we went with Allergan but JNJ is OK."