Jim Cramer thinks the broad consensus of the market Thursday was when the Fed takes action next week, it will likely say that this will be the last rate hike for a long time. As a result, the one-and-done crowd have taken over stocks.
Investors could see a quarter point rate hike, and then a forceful statement from the Fed that nothing will happen again unless there is concrete evidence that U.S. job growth is accelerating, he said.
And while many investors that have never played the "rate hike, rate cut" game may think that playing stocks based on the Fed's statements are ridiculous, Cramer takes these moves seriously.
"I think we need to discuss why it both is and isn't a dumb parlor game that we have to put up with because of the opportunities it might give us if we are good and ready," the "Mad Money" host said.
Cramer warned against stocks that have to borrow money to pay for their dividends. The risk is too high because when the Fed starts to tighten and the company's business isn't doing well, then the dividend could get slashed. Kinder Morgan is an example of this situation.
"Kinder's become the benchmark of a bad stock … Dividends funded by debt are just too risky from now on," Cramer said.
This explains why so many investors have been so skittish in the past three sessions and why press reports on Thursday that said the Fed would be very slow and very deliberate with its rate hikes reduced the urgency to get rid of these high yielding stocks.