Cramer's 'Mad Money' Recap: Jumping Off the Panic Bandwagon (Final)

Ethanol Catalyst

There's a catalyst coming in the ethanol market, Cramer told viewers, and the time to get on board is now. He said that no one is paying attention to California, which recently boosted its maximum ethanol percentage in gasoline from 5.7% to 10%. Nor are they paying attention to the Environmental Protection Agency, which is set to raise the national limit on ethanol in gasoline from 10% to 12%.

Cramer said the EPA's expected ruling could create demand for up to 6.5 billion additional gallons a year of ethanol, something confirmed by railroad CSX (CSX), which reported ethanol shipments up 17% on the quarter, and pipeline company Kinder Morgan Energy Partners (KMP), which reported a 38% increase in ethanol deliveries.

Cramer said it's natural for investors to want a pure play in ethanol to play this move, but don't, he cautioned. He said these speculative stocks are far too risky, and investors will get hurt. Cramer said the way to play ethanol is with John Deere (DE).

Cramer said the premise is simple: To have more ethanol, you need more corn, and for that, you need more John Deere. He said that Deere may seem expensive at 13.3 times earnings, but with a 10% long term growth rate and sales expected to rise 11% to 13% in 2010, the stock is a bargain.

Lightning Round

Cramer was bullish on Boeing (BA), Skechers USA (SKX), Devon Energy (DVN), Chesapeake Energy (CHK) and ON Semiconductor (ONNN).

He was bearish on Range Resources (RRC) and McAfee (MFE).

-- Written by Scott Rutt in Washington D.C.

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