Cramer's 'Mad Money' Recap: Next Week's Game Plan

"Homework is about taking control of your own destiny," said Cramer. Homework gets results, and anyone can do it. Homework may not tell you which direction a stock is headed next, said Cramer, but ultimately stocks drift back to where they "deserve" to be trading, given how the underlying company is doing, and that's where homework matters most.

Cramer said the better investors are at avoiding stocks where the risk-reward is changing from good to bad, or bad to good, the better positioned they'll be to take calculated risks and move swiftly to changing market conditions.

Watch Those IPOs

Cramer also advised on initial public offerings, those sexy deals that are talked about and written about endlessly in the media. He said IPOs can make incredible, instant profits, but they can also go down in flames if investors choose the wrong ones. Every IPO is not a great way to make money, Cramer explained, and determining the ones that will, can be a real challenge.

One little-known secret about IPOs, said Cramer, is they're designed to pop on their first day as a way to lure new investors into the market and reward loyal customers at the investment banks that underwrite them. He said that too often the tool of choice is the float, or the number of shares being offered at the IPO. By keeping the float small, shares are almost guaranteed to pop on their first day of trading.

But having a successful first day does not mean you should invest in that stock thereafter, warned Cramer. In fact, he said investors should NEVER buy an IPO in the aftermarket or in the open market after it begins trading. He reminded viewers that if they can't get in on the IPO deal itself, they need to forget about it. The IPO mechanics do not have the individual investor in mind.

Good vs. Bad

Continuing with the IPO theme, Cramer explained how investors should determine a good IPO from a bad one, assuming they can get in on that initial offering. First and foremost, investors need to look at a company's pedigree.

Cramer said those involved in a company say a lot about it. Who are its executives? Its investors? Who is bringing it public? This is not always a good way to tell, however, as many of the hottest technology and social media companies were all started by total unknowns.