Cramer's 'Mad Money' Recap: Heavily Hyped and Shorted

In fact, oil stocks didn't keep going up just because oil prices kept going up. They went up because the analysts had to keep their estimates too low and had to keep sell ratings on some oil stocks that kept blowing away the analysts' estimates, Cramer said.

However, the same holds true on the negative end, he continued. Although analysts were bearish on stocks such as eBay (EBAY Quote), Amazon (AMZN Quote) and Lucent (LU Quote), before these stocks had "serious declines," they should have stayed negative longer because they could have probably saved a lot of marker players from the pain of the stocks' further declines.

Cramer's third rule pretty much means exactly what it sounds like: "Don't be a snob." It doesn't matter if people are snobs in their personal lives, he said. But if they're a snob about investing and are too busy looking at Neiman Marcus rather than Target (TGT Quote), they could be missing "great opportunities" to make money.

"The Street will almost always be late to picking up trends in low-end or even midgrade products, because everybody on the Street lives in an upper-class bubble," Cramer said.

Therefore, even an analyst, whose job it is to cover the restaurant industry, might not understand a casual-dining play such as Darden Restaurants (DRI Quote) as much as a higher-end stock like Morton's (MRT Quote) or Ruth's Chris Steakhouse (RUTH Quote), he said.