Cramer's 'Mad Money' Recap: Finding Market's Eternal Sunshine

People think the subprime lending crisis is "the end of the world" and that "bankruptcies are running rampant," Cramer said. But when people default on their debt, while it's a problem for some, it's an opportunity for others, he said.

Right now, the bull market is in the companies that make money off of defaulted consumer debt, said Cramer, and one such company is Portfolio Recovery Associates (PRAA Quote).

The company repossesses everything, including houses, he said. It buys defaulted debt on the cheap and makes money from that. Moreover, Portfolio has the experience and discipline to get people to pay, Cramer said.

However, "the stock has been a victim of panic," he said. The shorts are all over PRAA even though there is nothing to justify their positions. Cramer said he would take this as an opportunity to buy PRAA.

While he doesn't feel that investors necessarily have to get in and buy it tomorrow, Cramer recommended that people get in before the shorts get squeezed and realize that bad credit is good for the stock.

Playing Defense

Ceradyne (CRDN Quote) CEO Joel Moskowitz joined Cramer on the show and said that the company does not have complete procurement for the Department of Defense.

During Ceradyne's conference call, the company stated that "there would be another major request for a proposal that has not come out yet."