Cramer's 'Mad Money' Recap: Hurricane Disaster Plans

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To make stock picks in the wake of Hurricane Katrina, identify what are short-term plays and what are long-term plays, Jim Cramer said on his "Mad Money" TV show Tuesday.

Katrina's Short-Term Plays

First, be careful with short-term plays that are "already over." Cramer would classify Shaw Group (SGR Quote), Caterpillar (CAT Quote) and cement-company stocks in this category.

A short-term trade that still has a "couple more points to go" is Jarden (JAH Quote), said Cramer. Jarden owns Coleman, which sells camping equipment such as tents, cooking equipment, water purification equipment, flashlights and sleeping bags. These things are needed right now by the Federal Emergency Management Agency, the Department of Homeland Security and hurricane victims, said Cramer.

Also, Lowe's (LOW Quote) and Home Depot (HD Quote) "can still make you money from these levels," said Cramer. Cramer, who had been bearish on Lowe's and Home Depot before the hurricane, said, "I was wrong. I did not anticipate a catastrophe on this scale. ... This wasn't a hurricane. It was gotterdammerung."

Cramer also likes Phelps Dodge (PD Quote) as his favorite short-term rebuild play. Even though Cramer advised selling Phelps Dodge a few weeks ago, he said he was wrong. New homes have 400 pounds of copper in them, said Cramer, and PD should benefit.

A caller asked about hotel plays in the wake of the hurricane with so many people displaced. Cramer said even though that was bullish for hotel stocks, the bearish reality of high gasoline prices overwhelms any benefit from the hurricane as people cut back on travel.

Long-Term Disaster Plays

Another caller asked if Caterpillar was a short-term play or a long-term play. Cramer said Caterpillar will work in the long term not only because it is a hurricane rebuilding play, but also because it is an oil and gas play. "If you're going to dig up all that shale, you're going to need CAT."

Long term, Cramer is bullish on oil, communications and insurance. We're not finding more oil or building more refineries, said Cramer. "We'll never have enough oil again. We don't have enough energy." The long-term picture is one of scarcity.