Investor fears of a rate hike coming from the Federal Reserve prompted Friday's market decline, making it a staggering one for Jim Cramer. He told investors this is the time to act.

"I want you to be prepared ahead of the Fed's move. That means taking evasive action, because the reward isn't worth the risk, at least at these elevated prices. I say another, better time will come and you want some cash ready to take advantage of it," the "Mad Money" host said.

While the Fed could decide not to raise rates, Cramer wasn't willing to chance it. He estimated that investors could miss out on a 2 to 3 percent rally. But considering that Fed Chief Janet Yellen and Vice Chair Stanley Fischer both openly talked about raising rates in Jackson Hole, and Boston Fed President Eric Rosengren joined the chorus on Friday, the risk of a hike is too great for Cramer to chase a 2 to 3 percent gain in the averages.

Cramer warned that the Fed does not seem concerned about the economic data. It is worried that rates are at rare lows, which is untenable considering the unemployment rate and lack of overseas worries. It stayed on hold already because of China, oil and Brexit. Nothing overseas will stop it this time.

"Accept it and act accordingly, even if you think it won't happen or it shouldn't happen," Cramer warned.

For investors who think the Fed will raise rates, the banks could be the biggest winners. Cramer considers Citigroup the safest big bank to own. He has his eye on the analyst meeting. If the stock goes higher, it will tell the temperature of how the market feels about two rate hikes before the end of the year.

While retail stocks are not as important as health care, technology or finance, they still punch above their weight. The stocks have now become so visible and so disturbing that Cramer is worried.

"I would be kidding you if I said I wasn't worried. All I can say is, this group needs to snap out of its funk or the stocks will only get worse," he said.

Until the market-wide decline on Friday, the rails were among the strongest groups out there. Back in January, Cramer advised investors that the railroads were finally worth buying, particularly Norfolk Southern and CSX because of their good value.

While both stocks have rallied tremendously since January, what was really stunning to Cramer is how well they have done since June.

When Cramer drilled down, he found that the railroads have roared so much because expectations got too low. The stocks became too cheap with attractive yields.

"I don't think this rally is sustainable given that the fundamentals remain far from strong, the stocks are no longer cheap and the dividends are lot less impressive. I say it's time to ring the register on the rails after a magnificent run," Cramer said.

Just when the dollar stores have started to roll over from some truly hideous numbers, Cramer spotted one discount retailer that still has managed to thrive.

Ollie's Discount Outlet Holdings is the chain of more than 200 stores that sells brand-name goods. Last week, the company reported a strong quarter, and the stock has climbed more than 50 percent.

"Even after this move, I think the company has got a lot going for it," Cramer said.

The company first came public in 2015. At the time, Cramer did not like that Ollie's was backed by private equity firm CCMP Capital Advisors, which owned 59 percent of the company.

"I never like to see that level of private equity ownership because it means you could get slammed by a tsunami of selling as these guys decide to take profits," Cramer said.

In recent months, two waves of private equity block sales hit Ollie's. Cramer interpreted that as a good sign, because the last block sale represented the remainder of CCMP's position. Private equity has now cleared out.

Sometimes a market-wide sell-off can be an opportunity to buy winning stocks on rare moments of weakness. Twilio is the software company that makes it very easy for developers to create and manage reliable communications processes on the cloud.

Cramer compared it to the one-stop-shop for adding communication features to an app, ranging from voice messaging to text messages to video.

For example, when Uber sends a text message to a client that alerts when a car has arrived, that's Twilio. It is also the brains behind texts confirming an Expedia hotel booking and WhatsApp messages.

The company blew away estimates when it reported a month ago, and announced some large customer wins that included BMW, Nike and Home Depot. Cramer spoke with Twilio's co-founder and CEO, Jeff Lawson, who noted that the digitization of text messages for orders in brick-and-mortar locations gives it an edge over online retailers.

"Every company now needs to become a software company now to compete. Part of how you build great software is having building blocks, and having these compatible services — whether they are computer and storage from the likes of Amazon, or communications from the likes of Twilio — these are the new fundamental building blocks of every app that we use every day," Lawson said.

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

Cypress Semiconductors: "It has a $1 downside and about $3 upside. I like that ratio. A lot of the semiconductors are coming down now because there is a lot of momentum. So let's have the dollar downside first."

BlackRock: "Let it come in ... it's a really, really good company. It had a real big spike this week. I think it's got room to decline before you have to pull the trigger."