Cramer's 'Mad Money' Recap: Profit From the Panic

"Panic loses people fortunes," he said. "There is always a better time to sell than that panic moment."

So if you're terrified, take a break, said Cramer -- otherwise, you'll be selling at the wrong time. Stocks don't always go down because they deserve to, so don't panic-sell, he said.

Now that people know how to protect themselves from panicking, it's time to learn how to play the panic and profit, Cramer told viewers.

Frenzied Foolproof

Some institutions that buy stocks have lists of what they want to buy, and they don't pay attention to the trading floor panic, he said. Similarly, Cramer believes everyone should have a list of stocks he wants to buy, and prices he wants to pay, all compiled from continuous homework.

"Take advantage of the frenzied fools," Cramer said. Plan things in advance, do your homework, make a list, and be ready to buy stocks when they are selling at a discount, he recommended.

Cramer said this method is rational. On the other hand, he believes "the worst time to make a decision is at the end of a rough trading day when your gut is telling you the sky is falling."

When investors make lists, they can make their decisions rationally "without the heat of the moment." So when a day like today rolls around, they can buy stocks at a discount, Cramer said.

A Spot of T

Cramer said he wants people to buy AT&T (T Quote). "Put it on your list and buy it on a day like today," he said. "Play the scared, volatile market" and buy it on the cheap.