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Cramer's 'Mad Money' Recap: Making Sense of the Selloff (Final)

Cramer linked today's market plunge to the proliferation of global futures markets and ETFs as well as a wild selloff by hedge funds.
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) -- "There's money to be made in this panic," a calm and subdued Jim Cramer told the viewers of his "Mad Money" TV show Thursday.

He reminded viewers that no one ever made a dime while panicking, and that just because everything is down, it doesn't mean it should be.

Cramer acknowledged that big down days like today scare a lot of people, but he challenged them to ask themselves, "Did we deserve to go down today?" He said just as oil shouldn't have traded at $147 a barrel in 2008, only to trade at $38 a barrel just days later, not all stocks today deserved the beating they received.

Cramer explained today's brutal market action by telling viewers that thanks to the proliferation of global futures markets and ETFs, stocks are now lumped into baskets, and often trade together even though they shouldn't.

He said long gone are the days of fundamental securities analysis, which valued companies individually based on their own merits. Instead, today's markets simply trade the


ETF, and every stock in the average takes the hit.

Cramer also explained that this trend is exasperated by large hedge funds, which trade ETFs and futures for the liquidity they offer. And with so many fund managers thinking the same, Cramer said the herd mentality of selling everything and stockpiling cash is palpable.

What's the only option for investors once the herd gets moving? "Let it play out," said Cramer.

He told viewers to remain vigilant and look for bargains. Cramer said companies like


(MO) - Get Free Report



(V) - Get Free Report



(CSCO) - Get Free Report

, three stocks which he owns for his charitable trust,

Action Alerts PLUS, didn't deserve the carnage they received today, and that makes them cheap once the panic has passed.

A Recovery Play

Investors who owned shares of Botox maker


(AGN) - Get Free Report

actually made money today, Cramer said.

He spoke with chairman and CEO David Pyott to find out how the company is able to keep roaring higher against seemingly unsurmountable odds.

Pyott said that Allergan has weathered the storm very well, thanks in part to strong sales in its eye care business, which accounts for 47% of sales. He said the company has also seen a 18% increase in its dermal filler products.

Pyott said when it comes to the company's eye care segment, investors and analysts need to take a step back and look at the real value of what that business delivers.

Investors should also consider the company's new eyelash product, LATISSE, which has already generated $74 million in sales and is "another category builder" for the company, said Pyott.

When asked about some of the challenges facing the company, such as increased competition and proposed taxes on Botox, Pyott responded by saying that Allergan has successfully competed against its rivals for years, and the competition only has low double-digit market share.

He said the proposed tax on Botox was defeated thanks to a last minute, grass roots effort that swelled from their doctor and patient community.

Cramer called Allergan the best medical aesthetics company in the business and said the company is a great recovery play.

Riding the Tech Boom

Cramer interviewed Richard Hill, chairman and CEO of semiconductor equipment maker



, a company at the heart of a new boom in technology.

Hill explained that inside every factory that makes chips, you'll find equipment that cleans and etches the wafers, and that's what Novellus makes. He said no factory can make chips without the equipment that they provide.

Hill painted a very bullish picture for his industry, saying that he hasn't seen opportunities this good since the 1990s, when semiconductors were being driving by the Internet, Y2K and the proliferation of personal computers. Today, he said, the market drivers are emerging markets, anti-terrorism and gadget loving consumers.

Hill dismissed arguments that a slowdown in China will hamper growth. He said while China is working to slow a bubble in their housing market, the Chinese consumers have not stopped loving their electronics.

After reporting a 6 cents a share earnings beat and offering bullish guidance, Cramer said Novellus is an integral part of his Mobile Internet Tsunami and he'd be a buyer.

Green Initiative

Cramer sat down with Larry O'Donnell, president and CEO of

Waste Management

(WM) - Get Free Report

, an unlikely company that's leading the way in green initiatives.

Cramer explained that by harnessing the power of natural decomposition at 110 of its landfills, Waste Management is now powering oner 400,000 homes in the U.S. The company also has over 400 collection trucks that are running on clean burning natural gas.

O'Donnell said his company has learned that everything they collect has value, whether it be from recycling or energy. He said they're dedicated to making the most out of what they collect. He also said the company's natural gas vehicles work great, save money and run clean.

When asked about his appearance on the premier episode of CBS' new show "Undercover Boss," O'Donnell said he learned a great about his workforce. On the show, O'Donnell posed as a low level employee at his own company.

O'Donnell said he learned that Waste Management has an incredible workforce, which is why he's not surprised their great ideas have helped the company save $120 million by running more efficiently.

Lightning Round

Cramer was bullish on


(MCD) - Get Free Report



(C) - Get Free Report


Procter & Gamble

(PG) - Get Free Report



(WIN) - Get Free Report


He was bearish on

Burger King



Micros Systems



Allied Irish Banks



Campbell Soup

(CPB) - Get Free Report


Frontier Communications

(FTR) - Get Free Report


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

To watch replays of Cramer's video segments, visit the Mad Moneypage on CNBC


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

clicking here.

For more of Cramer's insights during the Lightning Round, clickhere


At the time of publication, Cramer was long Altria, Visa and Cisco.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of 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, 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 is related to the specific opinions expressed by him on "Mad Money."

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