Cramer's 'Mad Money Recap': Hot Chilean Stocks

Cramer said investors often get lured in by single-digit valuations and don't give much thought on how much they can lose. It could be "everything," he said, citing the recent example of Thornburg Mortgage TMA, as just another in a long line of companies that decline sharply, with little chance of ever recovering.

"Stocks don't get down to these prices because they're doing well," Cramer reminded investors.

In the case of IndyMac, Cramer noted the bank has a bad loan ratio of 6.5%, yet wrote off only $132 million of losses this quarter. The company continues to raise additional capital, diluting existing shares by the day. He also noted that 40% of the banks loans are in California, one of the worst markets in the country.

Cramer said Standard Pacific is also on the verge of imploding and is only kept alive by continued waivers allowing it to cease repaying its growing debts. "These stocks are too risky. Don't think they're cheap," said Cramer.

Mad Mail

Cramer reiterated his buy on Yamana Gold AUY as one of his favorite gold stocks.

Final Notes

In a final note, Cramer reiterated his buys on Transocean RIG and National Oilwell Varco NOV on the news that Petrobras PBR is calling for additional offshore oil rigs.

Lightning Round

Cramer was bullish on Merck MRK, Schering-Plough SGP, Temple-Inland TIN and Vaalco Energy EGY.

Cramer was bearish on Whole Foods WFMI, CONSOL Energy CNX, Abiomed ABMD, Chindex International CHDX, PG&E PCG, Focus Media FMCN and Central Garden & Pet CENT. ---

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Jim Cramer writes about all the stock trades in his charitable trust for TheStreet.com in Action Alerts Plus. Recent stocks he's traded in this account include Schering-PloughSPG, Yamana GoldAUY and Inverness MedicalIMA.

Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

For more of Cramer's insights during the Lightning Round, click here.