Cramer's 'Mad Money' Recap: Momentum Fund Fuel

As it was such a "bad experience," Cramer started wondering if there could be bankruptcy risk. Cramer said that because it pains him to see "such an awfully run business," he did research to investigate how bad Six Flags was as a company.

Upon doing his homework, Cramer found that if Six Flags bulldozed everything, the stock would go higher as it is "sitting on some of the finest real estate in America." In addition, he came upon a report by CRT Capital Group that regarded Six Flags as a strong buy.

Cramer realized that Six Flags is not doing as bad as it seems.

"First, don't entirely trust your senses," he said. "Second, think outside the box. A theme park can be a theme park, but it could also be a big chunk of real estate."

Six is a buy at its low price with a worst-case scenario of $6 up and $2 down, Cramer said.

Yahoo! Could Be Yes

Using Yahoo! (YHOO Quote), which he owns for his charitable trust, Action Alerts PLUS, as an example, Cramer showed viewers how to determine a fair price in a stock that's falling.

The first method is looking at the company's earnings, he said. Yahoo! reports Tuesday, and its earnings are a "travesty," Cramer said.

While people are expecting it to deliver 47 cents this year and 65 cents next year, he believes that these estimates are "too high" and that Yahoo! might even cut guidance for next year.

"It's a $12 stock masquerading as a $24 stock," Cramer said. "When it reports tomorrow it will be slaughtered."

However, there might be a bottom if it reports "terrible" earnings, he said. "If it cuts earnings estimates down to 25%, it has a shot to beat them."

Also, there's a chance that Yahoo!'s management is the issue, Cramer said. There were high expectations for its chief executive, but he's missed several opportunities to grow the company.