It's going to get much worse in retail, and that's exactly why people should be buying these stocks, Jim Cramer said on TheStreet.com TV's Wall Street Confidential Web video Tuesday.

The fundamentals of the retailers are "awful," and the same-store sales numbers will be "miserable" Thursday when they report, he said. There's no reason to own these stocks, and "that has historically been exactly when you buy."

Cramer: Retail Rocks in Tough Times

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The stocks have had a "remarkable decline" in anticipation of the National Retail Federation saying it will be a bad holiday season and that's why they went down, Cramer explained.

When people see a group go down, they should ask themselves whether or not everybody sold them. "Stocks discount

what happens in the future," he said. "This group has been saying for months that things are quite awful. Tell me something new."

This is what should happen: "We should have a cathartic down leg if the same-store sales are as bad as I think, but it's entirely possible that that's when the hedge funds that have been very short this group cover," Cramer said. What people have to do, he said, is pick their favorites.

Cramer said he likes

Target

(TGT) - Get Report

because of the fact they could be selling their credit card division.

J.C. Penney

(JCP) - Get Report

has gotten very cheap, he added. And

Kohl's

(KSS) - Get Report

and

Lowe's

(LOW) - Get Report

have historically been very good retailers.

"You cannot buy these when retail is good," Cramer stressed.

"Every once in a while there will be a multiyear or multiquarter move in a group," he said. The retailers are setting that up for a period that he said he believes should be from the end of the first quarter to the end of the fourth quarter of next year.

"You can make a decision to time that right and wait until tax-loss selling at the end of the year," Cramer said. Or people can make a decision that things are so bad that they have to buy them sooner, which is what he is saying.

"It is so counterintuitive sometimes to be right," he went on. "But all of my career, the biggest money I've made is when I was counterintuitive. Retail is awful, the numbers will be awful and you need to buy."

Things at the retailers are horrible, but this is different from the stocks, Cramer said. The stocks reflected that things are going to be horrible and they will be probably through Christmas, but it may not matter.

People may find that all of the sellers have gotten out of the stocks, but the fundamentals are not the worst, he said. "They are going to get more negative, but you may not be able to wait for the fundamentals to turn in order to make money in the stock."

What Cramer said he's saying is that market players should put half their positions on now, and as the fundamentals at the retailers deteriorate (and the stocks might not go down anymore), they should buy the rest.

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