In the past six years there have been two flash crashes, including one that occurred exactly a year ago in 2015. Cramer will be ready for the next one, and wants investors to be prepared, too.
"Fool me once, shame on you. Fool me twice, and I'm an idiot who deserves the heat," Cramer said.
The term flash crash refers a special event when the stock market drops quickly, almost in the blink of an eye. It can result in a dramatic loss of about 1,000 points on the Dow. Both flash crashes had a similar theme: something negative overseas either triggered, or was thought to trigger an event in the U.S. that investors couldn't grasp. It caused an immense amount of fear and paralysis.
In Cramer's perspective, it's not a matter of if a flash crash will happen again, it's a matter of when. His first rule is to never use market orders. A market order is an order to buy or sell a stock executed at the current market price. Market orders can be messy, and have no specific price allocated, so investors can get crushed by machine algorithms, Cramer said.
And while housing has been on the mend this year, investors learned on Tuesday that U.S. home sales declined last quarter. This seemed like a high-quality problem to Cramer, because the decline was caused by lack of inventory. Meaning, people want to buy homes, there just aren't enough to supply them.
Still, Cramer declared that the housing market is once again on firm footing. Ellie Mae is a software service company that helps lenders to streamline and automate parts of the mortgage process. It is the only player with a one-stop-shop mortgage solution that can assist things such as determining if someone is worth lending to, federal and state regulations and collecting mortgage payments.
Ellie Mae's stock has been on fire, up 60 percent for the year. The company's CEO Jonathan Corr explained that Ellie Mae aims to enable the procedure, all the way from the borrower filling out the initial loan application to the funding process.
"It's an incredibly complex process. Historically, there is lots of paper involved, a lot of inefficiency, a lot of disconnected systems. And then on top of that, it's being done in a very tight time frame … what we do, is we automate that entire process," Corr said.