Cramer's 'Mad Money' Recap: Surviving a Tough Market

What to Keep

After telling viewers what they should sell in a down market, Cramer then explained what investors should keep. He identified three types of stocks that can be owned, even in the worst of market conditions.

First are the recession-resistant stocks. He said that any company that makes something you can eat, drink, smoke, wash with or use to cure diseases can all be owned during a downturn.

Next are stocks with good fundamentals that trade at or near their cash. Cramer called these companies the obvious choices, since the cash on the balance sheet provide a floor to prop up the stock price.

Last are stocks that he's dubbed the "accidental high-yielders," with traditionally low dividends that after enormous declines in their stock price are now yielding over 4%.

Cramer said he trusts the high yielders because many of them are industrial companies, like Nucor (NUE Quote) and Caterpillar (CAT Quote), with long histories of paying dividends and little risk of that dividend being cut. "The accidental high yielders are reliable," said Cramer.

Cramer also stressed the importance of reinvesting those dividends. He said while dividends may seem small, compounding over time can make investors plenty.

In an awful market, said Cramer, the way to buy the high yielders on a scale based on yield. He suggested buying a small position as a stock yields 4%, then buying more as it yields 5% and even more if its yield reaches 6%.