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Although grain prices are getting higher, "it's important to own cereals for the next two months because they are recession-proof," Jim Cramer told viewers of his "Mad Money" TV show Thursday.

Particularly, Cramer said he likes

General Mills

(GIS) - Get Report

.

There is nothing more important than knowing what you own because if people don't know what their stocks are levered to, they won't be able to understand why the stocks move the way they do, Cramer said.

In the case of cereals, it doesn't matter that grain prices are increasing because grain isn't the biggest cost for cereal makers, he said.

"When you pay $54 a share for General Mills, you're not paying for a company levered to these ingredients," Cramer said. Instead, you're levered to the cardboard the cereal boxes are made out of, the plastic the cereal is sealed in and the fuel used to transport the cereal, he said.

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Cereal companies are "worth investing in," Cramer said. "Grain doesn't matter."

If a box of cereal costs $3, then only 33 cents of that goes to the cereal's ingredients, he said. Though ingredients may be getting more expensive, they only constitute roughly 11% of the cereal box's total cost.

In addition, the prices for plastic, cardboard and fuel are declining, Cramer said.

Brand names in cereal are important, because consumers will pay a premium for them, even if there's a generic alternative, Cramer said.

"Right now these companies could raise prices because of brand loyalty, mild competition and the fact that their raw costs are going down," he said, adding that out of General Mills and

Kellogg

(K) - Get Report

, he prefers General Mills.

The Shoe Should Fit

"

Crocs

(CROX) - Get Report

, the maker of what could be the most comfortable shoes on earth, is right now a battleground stock," Cramer said.

The stock, which some are bearish on and some are bullish on, has a 28% short position, he said.

"Somebody is going to be right about Crocs and that 'somebody' should make a lot of money," Cramer said.

The stock's pros include the fact that Crocs is "clearly a strong growing brand." Not only does it have a deal with

Disney

(DIS) - Get Report

to sell shoes with Disney characters on them, but it has also made a deal with 70 colleges to make shoes in their school colors, Cramer said.

"Disney would never do this if they didn't have faith in the product," he said.

In addition, Crocs blew away their last quarter's numbers.

"They wanted $56.6 million in sales and got $85.6 million," Cramer said. "I believe they can repeat the numbers."

The reason behind the fact that 28% of the stock is being shorted is that there are knockoffs that are getting better and better, he said. And when investors see that kind of potential competition, it makes sense they are skeptical.

However, people want brand names, Cramer said, and Crocs has built up a strong enough brand.

He gave Crocs a "restrained buy" and said that if the stock misses its next quarter, it "will self-destruct in 30 seconds."

Sell Block

In Cramer's "Sell Block" segment, he evaluated recent mistakes relating to

Valero

(VLO) - Get Report

and

Wendy's

(WEN) - Get Report

.

On his July 27 "Mad Money" show, Cramer told viewers to consider buying Valero, the best of breed in the oil-refining game because he thought it would report a blowout quarter.

Although he was correct in that the company reported an upside surprise, Valero's stock barely moved, he said.

"I forgot the most important fact out there: This is about stocks -- not earnings -- and looking right," Cramer said.

The fact is the company had topped and should have been sold, he said. At this point, Cramer urged people to sell Valero even though it's down because oil has peaked, and the stock has a chance of falling down five more points.

On his August 18 show, Cramer predicted that Wendy's would have bad same-store sales, but he was "wrong to rant against Wendy's," he said.

In Cramer's "Mad Mail" segment, a viewer asked him to finish his sentence regarding

BellSouth

(BLS)

from a recent lightning round, which was interrupted due to the buzzer.

Cramer said he was simply stating that

AT&T

(T) - Get Report

is the best of breed, and it is buying BellSouth. If people buy BellSouth, they will also get AT&T, said Cramer.

When the next viewer asked Cramer his thoughts on

MasterCard

(MA) - Get Report

, he said the stock has not stopped, is a winner and is going to $65. At market close on Thursday, MasterCard was at $60.12.

In the "Sudden Death" round, Cramer was bullish on

Quest Diagnostics

(DGX) - Get Report

and

Hewlett-Packard

(HPQ) - Get Report

.

He was bearish on

Dell

(DELL) - Get Report

and

Marchex

(MCHX) - Get Report

.

Lightning Round

Cramer was bullish on

DealerTrack

(TRAK)

,

Reynolds & Reynolds

(REY)

,

Yamana Gold

(AUY) - Get Report

,

Vaalco Energy

(EGY) - Get Report

,

Intel

(INTC) - Get Report

,

Crystallex

(KRY)

,

American International Group

(AIG) - Get Report

,

Comcast

(CMCSA) - Get Report

,

GameStop

(GME) - Get Report

,

SanDisk

(SNDK)

,

UnitedHealth

(UNH) - Get Report

,

Corning

(GLW) - Get Report

,

Qualcomm

(QCOM) - Get Report

,

EuroZinc Mining

(EZM) - Get Report

and

Monsanto

(MON)

.

Cramer was bearish on

Silver Wheaton

(SLW)

,

St. Paul Travelers

(STA)

,

Sprint Nextel

(S) - Get Report

,

Verizon

(VZ) - Get Report

Montpelier

(MRH)

,

Frontier Oil

(FTO)

,

Sony

(SNE) - Get Report

,

Northern Orion Resources

(NTO)

and

Potash

(POT)

.

For more of Cramer's insights during the most recent Lightning Round, click here.

Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by

clicking here

.

At the time of publication, Cramer was long Qualcomm, UnitedHealth Group and AIG.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on Mad Money are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

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Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.