Jim Cramer's 'Mad Money' Recap: Don't Fear the Selloff

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NEW YORK (TheStreet) -- Do not fear the coming selloff, Jim Cramer said on "Mad Money" Tuesday.

Tomorrow's Federal Reserve news will most likely send the markets lower, said Cramer. Investors need to be patient and sit on the sidelines until the chaos subsides.

Cramer said the markets will be running the gauntlet over the coming weeks because as soon as the Fed announcements are out of the way, the wrangling in Washington will begin and thus continue the selloff. The selling won't be over in a day, Cramer warned, which is why he continues to urge investors to raise cash so they can be ready when the time to buy returns.

Why not just sell everything? Because this time the U.S. isn't the only game in town, so what the Fed has to say just isn't as important, according to Cramer. There are other factors, mainly China and Europe, that are helping the global markets along, which makes tomorrow's news just a bump in the road.

That's why Cramer said he'd only commit half of his cash after the market falls between 2% and 3%, then wait a few days longer to see if things get really ugly when Washington gets rolling. Fund managers will be returning to buy on the selloff eventually, he noted.

Meanwhile, companies are taking charge of their own destinies through mergers and acquisitions, as well as with a little help from an uptick in activist investing.

All of these points will lead to a strong fourth quarter, Cramer concluded. Investors just need to wait until stocks have run the gauntlet before getting back to buying.

Executive Decision: Chip Johnson

In the "Executive Decision" segment, Cramer spoke with Chip Johnson, president and CEO of Carrizo Oil & Gas , the oil shale driller that's seen its shares soar by 70% since Cramer last spoke with Johnson in February.

Johnson explained that Carrizo had a strategy of aggressively drilling and establishing itself in many shale regions throughout the country. But now that it has enough wells to hold onto its acreage, the company is scaling back and selling non-core assets in order to fund its continued operations. He characterized the move as better matching capital expenditures to cash flows.