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Jim Cramer launched his "Mad Money" TV show Tuesday with a lesson on how to spot a bottom in a stock and how to make money off of it.

After all, "spotting a great bottom might be the single best way for a home gamer like you to outperform the big institutional players," he told viewers.

Cramer used the action in

Abercrombie & Fitch

(ANF) - Get Report

over the last year as a case study.

Back on his

July 7 "Mad Money" show, Cramer told viewers Abercrombie & Fitch was a $55 stock that eventually would be an $88 stock. Now it's up to $68.95. In July Abercrombie & Fitch had the perfect bottom, Cramer said, and if people caught its bottom, they could have made some mad money.

For the first half of 2006, there were no changes in Abercrombie & Fitch's earnings forecast, so there was no real reason for it to move either way. But after "all the smooth sailing in the first half, "everything that could go wrong went wrong," Cramer said.

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Oil went up to $75, investors gave up on retailers and Abercrombie & Fitch reported "confusing and not-so-satisfying" same-store sales results in June, he said.

However, the company said it would report a good quarter in August. "There was no reason to panic and sell the stock, but panic

people did" as analysts "knocked it down with their downgrades," Cramer said.

On Aug. 15, the teen retailer

reported a great quarter just as it said it would back in June, and now it's up. The lesson to be learned is that people should pay close attention to analysts as their comments, upgrades and downgrades can affect stock prices, but folks shouldn't just blindly follow what analysts advise.

"Bottoms are created by too much negativity," Cramer said, adding that when there is this type of "bear raid," people should do their own homework on the company and stock.

If people did their own homework and looked at the company's numbers, they would have seen that Abercrombie & Fitch would have made its quarter like it said it would, Cramer said.

"The Street did the wrong homework and listened to the analysts," Cramer said. "When you see a stock hit with multiple downgrades and it plummets -- that's when you should swing into action and see if it deserves to be down or if it's just because of the analysts."

There was not a single reason to be as negative as the analysts were on Abercrombie & Fitch, he said.

"Analysts are almost always wrong, but money managers listen to them," Cramer said.

For the future, he recommended waiting till analysts have finished downgrading this type of a stock, and then buying it as it will have bottomed.

And "do your own homework," he stressed. "It's always the best way to invest."

Strong Outlook Brews at Starbucks

On recent a "Mad Money" show, Cramer said

Starbucks

(SBUX) - Get Report

,

Hansen Natural

(HANS)

and

Whole Foods

(WFMI)

had all lost their momentum.

He also said that the one that was most likely to rebound from its poor quarter was Starbucks, and now Cramer believes it's a buy.

When Starbucks missed its same-store sales number in July, the company said it was because of a banana frappuccino that took too long to make, which consequently caused long lines at its stores. Then it beat its estimates in August, he said.

"If Starbucks misses its same-store sales again, it could go down, but I believe they will beat those numbers," Cramer said.

Starbucks' same-store sales in July were "abnormal," he said.

The long lines that the company said it had doesn't make Cramer believe Starbucks has a problem with saturation, a lot of people think it does. In fact, once it beats its same-store numbers, it should send the stock a lot higher, he said.

"How can you be saturated when you have lines that are too long?" he said.

One of the main reasons Cramer believes market players should buy Starbucks is because it has longer-term growth that is "fabulous." In addition to the fact that the company is adding six Starbucks stores a day in the U.S., its China business is "fantastic," he said.

Plus, Starbucks is like a

Barnes & Noble

(BKS) - Get Report

, in the sense that people go there to hang out and meet people, while sipping on coffee. Now, it is planning on selling books and CDs at its stores.

"Starbucks is the perfect channel to move this type of merchandise," Cramer said.

Am I Diversified?

In the "Am I Diversified?" segment of the show, Cramer's first caller owned the following five stocks:

Although the portfolio was diversified, Cramer advised the caller to swap out of Brookfield and get into

Equity Office Properties

(EOP)

, which, he said, has a higher dividend and better management. Additionally, he called Leucadia a "mystery" and suggested selling it and getting into some health care instead.

His second caller owned the following five stocks in her portfolio:

Cramer said there was a problem with owning Wal-Mart and Lowe's, as both have been trading together. Instead, he suggested tossing Wal-Mart and buying a tech stock, such as

Cisco

(CSCO) - Get Report

or

Oracle

(ORCL) - Get Report

.

Mad Mail & Sudden Death

In his "Mad Mail" segment, Cramer told a viewer he still believes

Broadcom

(BRCM)

is a buy, even though it is having a weak quarter and is experiencing "options issues."

Responding to his next emailer, Cramer said during the "Lightning Round" when he types in his computer, he is looking for a stock's current price and to see if there's any recent news, including news after bell, on the company.

When a viewer asked about

Exelon

(EXC) - Get Report

, Cramer said he wishes the

merger with

PSE&G

(EXC) - Get Report

had gotten approval. But he still believes Exelon is a well-run company and that it "will persevere."

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

Lowe's

(LOW) - Get Report

. He was bearish on

Trinity Industries

(TRN) - Get Report

and

Home Depot

(HD) - Get Report

.

Lightning Round

Cramer was bullish on

Halliburton

(HAL) - Get Report

,

Sirius Satellite Radio

(SIRI) - Get Report

,

New Century Financial

(NEW) - Get Report

,

Yahoo!

(YHOO)

,

Oracle

(ORCL) - Get Report

and

International Game Technology

(IGT) - Get Report

.

Cramer was bearish on

Smith & Wesson

(SWHC)

,

Symbol Technologies

(SBL)

,

Knightsbridge Tankers

(VLCCF)

and

FortuNet

(FNET)

.

For more of Cramer's insights during the 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 Halliburton, International Game Technology, Sears Holdigns, United Technologies and Yahoo!.

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."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. 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.