Cramer's 'Mad Money' Recap: A Study in Stents

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In a "Mad Money" show devoted to helping market players determine the type of investors they are, Jim Cramer told viewers Tuesday to check out an article in that morning's New York Times.

According to "Federal Panel to Review Use of Artery Device," the Food and Drug Administration is convening a panel this Thursday that will ultimately determine whether drug-coated stents, medical devices used to open clogged heart arteries, stay on the market.

This is a story he believes people can play in one of two ways: with Boston Scientific (BSX Quote) or with Johnson & Johnson (JNJ Quote), a stock he owns for his Action Alerts PLUS charitable trust.

The choice offers "the perfect opportunity" for people to figure out what kind of investors they are, he said. The question here has nothing to do with Boston Scientific or Johnson & Johnson, but instead it has everything to do with what kinds of goals individual investors have and what kind of personalities they possess, Cramer said.

Together, Boston Sci and J&J control 90% of the stent market and have consequently been "punched" down, Cramer said. Cramer believes that the panel should approve the devices, and that creates an opportunity for viewers to make a trade Wednesday morning.

In this case, Boston Scientific is "the higher risk, higher reward trade," he said. If things go well for the company and the FDA panel approves stents, the stock should "soar;" if not it will get "crushed."

Johnson & Johnson, on the other hand, has diversified its business and therefore, it has less riding on the panel's outcome, he said.

If market players want to make the Boston Scientific trade, they need to be comfortable taking a lot of risk and not be afraid of losing a lot of money, Cramer warned.

"Buy it with money you are not afraid to lose and you can afford to lose," he said.