Cramer's 'Mad Money' Recap: The Buyback Defense

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For a long time, volatility was held in check. But Jim Cramer told "Mad Money" viewers Tuesday that volatility now rules.

"This means that when things are bad, you're more likely to get creamed ... and when things are good, you're more likely to make more money than you thought," Cramer said.

He gave listeners a primer on how to handle the next big selloff because he said we're bound to get more of these big ups and downs. And he said one thing that could protect viewers from the downside is to own stocks with an effective buyback, meaning companies that buy their own stock as prices fall.

No matter how bad the market or how rough the selloff, these companies buy back stock and cushion the fall, he said.

His top buybacks were:

• Citigroup(C Quote)
• Time Warner(TWX Quote)
• Bank of America(BAC Quote)
• Pepsi(PEP Quote)
• CBS(CBS Quote)
• Home Depot(HD Quote)
• News Corp.(NWS Quote)
• Amgen(AMGN Quote)
• Chevron(CVX Quote)
• Texas Instruments(TXN Quote)
• Johnson & Johnson(JNJ Quote)
• McDonald's(MCD Quote)
• Nokia(NOK Quote)
• Sears(SHLD Quote), which Cramer owns for his Action Alerts PLUS charitable trust portfolio.

He said that these are the companies with the strongest buybacks, and then winnowed it down to his top five, beginning with Nokia. Not only has the company bought back 1.4 billion euros' worth of stock, it is taking more market share worldwide in fast-growing markets like China.

His No. 4 pick was a "media tie" between CBS and News Corp. While Cramer believes Rupert Murdoch has been given too much credit for the MySpace acquisition, he said that the company is not given enough credit for its great programming.