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TheStreet Open House

Jim Cramer's 'Mad Money' Recap: Now Is Not the Time for Panic

Stock quotes in this article: K, PG, Z, ANGI, EBAY, AAPL, F, MTW, NYCB, HAR, SLXP, LAZ, GTLS

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NEW YORK ( TheStreet) -- Don't panic in the face of this correction, Jim Cramer urged his Mad Money viewers Wednesday. While the markets may still have further to fall, investors need to be ready with their shopping list of stocks to buy when the bottom finally comes.

Cramer explained to viewers exactly what happens during a correction such as the current one. First, the stocks in the primary blast zone get hit. In this market, those are the industrial stocks, the ones that suffer from the weakness in Europe that has now spread to Russia, China and South America. The estimates for these stocks are still too high, Cramer noted, which means their stocks have farther to fall.

Must Read: Warren Buffett's Top 10 Dividend Stocks

Next to be hit are the stocks in the secondary blast zone, which are the consumer packaged goods companies such as Kellogg (K) and Procter & Gamble (PG) . These stocks are usually shielded from economic weakness, but with the dollar so strong they're getting hit by a strong U.S. dollar.

Also in the secondary blast zone are the banks, which need higher interest rates to thrive but won't likely see them anytime soon.

But then there are the stocks receiving collateral damage. Those are the ones that don't deserve to be going lower and can be bought into the weakness. Cramer reiterated that the restaurant and retail stocks are in this group, as are the biotechs and the defense companies.

Cramer said there's no rush to buy this last group because the markets are only 3% from their highs and may have further to fall. However,they will be the first to bounce when the bottom is finally reached.

Executive Decision: Spencer Rascoff

For his "Executive Decision" segment, Cramer sat down with Spencer Rascoff, CEO of Zillow (Z) , the online real estate Web site that's seen its shares rise 36% so far in 2014.

Rascoff commented on the recent news that Rupert Murdoch is buying Move (MOVE) , purveyors of Realtor.com, Zillow's only competing Web site after Zillow snapped up Trulia earlier this year. He said Zillow is still the largest player in the market and remains very focused on real estate agents and brokers, which is why the company continues to gain market share every quarter.

Rascoff noted that when it comes to the Internet, user experience rules. Once you have an audience the advertisers will follow, he said, which is why the Trulia acquisition makes sense. Zillow will operate both brands when the acquisition closes, allowing users to pick the brand that fits them best while advertisers can quickly advertise on both platforms.

Finally, when asked about whether a slowing housing market will hurt Zillow, Rascoff said the continued migration from offline to online in the real estate market will far outweigh any short-term weakness in home prices.

Must Read: Here Are 20 Stocks That Could Buck the Odds and Do Well in October

Cramer remains a fan of Zillow.

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