Cramer's 'Mad Money' Recap: Beware of the Wrong Cues (Final)

NEW YORK (TheStreet) -- Shoot first, ask questions later. That's a sure-fire way to lose money, Jim Cramer told his "Mad Money" TV show Tuesday. Cramer reminded viewers that taking their cues from the wrong stocks can lead to major losses.

Case in point, the home builders. When KB Homes (KBH) reported a gloomy outlook last week, the entire rally in the home and home-related stocks was thrown into jeopardy. Cramer said everything, from the home builders to Sherwin-Williams (SHW) and Home Depot (HD) , sank on the news.

But then today, homebuilder Lennar (LEN) blew away its earnings, signaling that KB Homes' problems were its alone and not that of the entire industry. Taking cues from KB Homes, said Cramer, was a mistake.

The same strategy is playing out in multiple sectors, noted Cramer. Investors sold off the restaurant stocks when McDonald's (MCD) stumbled last week, yet today fast growers Chipotle Mexican Grill (CMG) and Panera Bread (PNRA) hit 52-week highs. Shipper FedEx (FDX) took down shares of UPS (UPS) and John Deere (DE) took down the fertilizer stocks.

In all of these situations, the prudent call was to buy, said Cramer, which is why Baker Hughes (BHI) has created opportunities to buy Schlumberger (SLB) and Ensco (ESV) , a stock which Cramer owns for his charitable trust, Action Alerts PLUS. And it's also why Family Dollar (FDO) will likely cause weakness in rival Dollar General's (DG) secondary offering of shares. Cramer said both of these stocks are buy, buy, buys.