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Cramer: The Past Is a Game Plan for the Present

Jim Cramer

We want to try to figure out what can happen. We want to try to figure out how to protect ourselves and profit from it.

Why is that important? I want to go back to 1987, 1990 and to 2000. Those were three fulcrum years where, if you had a game plan, you could think more clearly than if you were winging it -- which, by the way, is what the Fed is doing.

Here's my takeaway from those three crashes. First, away from the Nasdaq's stunning decline in 2000 - a fall from 5000 to 2000 -- you could have made a lot of hay with traditional S&P 500 names with solid balance sheets that were insensitive to the recession. You had great success with Procter PG and Coke KO. You made money.

In 1990 with the S&L collapse, you tried to lose less by being in the classic growth stocks, many of which went down. Only the highest-growth stocks prevailed. It's very tough to believe that we will be different now. No real gains.

And in 1987, pretty much EVERYTHING was marked down, including a huge amount of stock that shouldn't have been. What rallied first? Hard-asset stocks: copper, paper, that kind of thing.

Then the drugs.

Then the industrials.

I think that menu might be a good place or blueprint for today.

In 1987's case, you could make your career by buying distressed stocks of non-distressed companies.

That could very well be the pattern again AFTER things settle down later this week.

Random musings: Stocks I would not bottom-fish today are ones with perhaps overstated book value: Lehman LEH, Citigroup C, Merrill MER and Bank of America BAC.

At the time of publication, Cramer had no positions in the stocks mentioned.