Cramer's 'Mad Money' Recap: Digging Into Bottoms

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Jim Cramer launched his "Mad Money" TV show Tuesday with a lesson on how to spot a bottom in a stock and how to make money off of it.

After all, "spotting a great bottom might be the single best way for a home gamer like you to outperform the big institutional players," he told viewers.

Cramer used the action in Abercrombie & Fitch (ANF Quote) over the last year as a case study.

Back on his July 7 "Mad Money" show, Cramer told viewers Abercrombie & Fitch was a $55 stock that eventually would be an $88 stock. Now it's up to $68.95. In July Abercrombie & Fitch had the perfect bottom, Cramer said, and if people caught its bottom, they could have made some mad money.

For the first half of 2006, there were no changes in Abercrombie & Fitch's earnings forecast, so there was no real reason for it to move either way. But after "all the smooth sailing in the first half, "everything that could go wrong went wrong," Cramer said.

Oil went up to $75, investors gave up on retailers and Abercrombie & Fitch reported "confusing and not-so-satisfying" same-store sales results in June, he said.

However, the company said it would report a good quarter in August. "There was no reason to panic and sell the stock, but panic [people] did" as analysts "knocked it down with their downgrades," Cramer said.