Cramer's 'Mad Money Recap': Play by the Rules

Down and Dirty

Rule No. 1 deals with "resisting the business cycle," he said. The business cycle, or the series of highs and lows the economy goes through, is usually controlled by the Federal Reserve. When it raises interest rates, "the cycle gets weaker as the economy gets strangled." And when it cuts rates, the economy gets stronger, Cramer explained.

This means that when the economy's going strong, market players should buy "the dirty, smokestack stocks that make things like machinery, cars and minerals," he said. And when the economy weakens, people should turn away from those cyclical stocks and move into secular growth stocks like health care companies, food, drinks and consumer staples.

With this new rule, Cramer's not telling people to play the cycle, because that's "intuitive." What he's saying is that people shouldn't fight it.

"You can't own cyclical stocks when the economy stinks, and you should stay away from the consumer staples when the economy's stronger," he said. "I don't care how much you like your stock, and I don't care how good it is based on the fundamentals. If it doesn't fit into where we are in the cycle, it could turn you into roadkill."

For example, Cramer said, not long ago, he owned UnitedHealth Group, (UNH Quote) for his charitable trust, Action Alerts PLUS.

He said he loved this stock as it had a "great" secular growth story, its fundamentals were "beautiful," and he thought it would be "the single biggest beneficiary of the new-at-the-time Medicare drug benefit."