In the 2012 fiscal cliff debacle, the VIX and
S&P 500 followed a more normal pattern, with the VIX rising and the market selling off, going into the deadline. But here, too, the smart move was to buy in when the VIX was high to take advantage of the market surge upon resolution.
Sebastian said that only in the summer of 2011 did this pattern not hold up, but in that case the markets struggled with the U.S. debt downgrade that followed days after Washington came to an agreement. Over the long term, the smart move was still to buy ahead of the agreement, but the reward took longer to achieve.
Which brings us to today's market. Cramer said stocks had a terrific September and the VIX is still very low. However, over the next 10 days, the markets should sell off as the VIX begins to gain steam. Only when the VIX reaches its highs should investors begin to consider buying in, said Cramer. Until then, it continues to be a smart move to raise cash.
Executive Decision: Bob Iger
In the "Executive Decision" segment, Cramer sat down with Bob Iger, chairman and CEO of
(DIS - Get Report), a stock that Cramer has been endorsing on "Mad Money" for almost nine years.
Iger said that while Disney will also rely on great creativity for much of its success, the company is also very well positioned for powerful, long-term growth for many years to come. He said that never has there been such a great opportunity to reach so many people around the world with Disney's stable of terrific brands.
Iger continued that there have never been so many new platforms and choices for consumers to enjoy content. He said Disney is approached almost daily by new platforms looking to add Disney, or
, or Marvel, Pixar or Lucasfilm content to their offerings. Disney, for its part, is also launching mobile apps to spread its content as broadly as it can, he said.
Turning to other areas, Iger said there were no ill feelings surrounding producer Jerry Bruckheimer for leaving. He said after 20 years of producing great movies, it was just time for both parties to move on. Iger was also upbeat on
in the face of increased competition. He said the sports network is stepping up its game as a result of new entrants and has actually seen its ratings increase over the past few months.
Check Out Our Best Services for Investors
Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts