Jim Cramer told his "Mad Money" viewers Thursday night that smart investors were buying stocks -- not selling them -- after the terrorist bombings in London. "We aren't mercenaries, we are realists," he said. "When it appears terrorism won't affect stocks, we buy," Cramer said. And that's exactly what happened Thursday. After early-morning selling, the stock market turned around and finished positive on the day. Cramer said today's early-morning selloff gave investors a chance to buy defensive stocks and techs. And when the banks reversed in the afternoon and headed higher, Cramer said that was the time to sell. "No one ever made a dime by panicking," Cramer said. He said the market is more affected by business cycles than terrorism. "Our hearts are not black," Cramer said, saying he was a realist. Cramer told a caller that travel and leisure stocks are the weak links after terrorist events. If you have gains, or even losses in some of these names, it is time to ring the register, he said. Cramer said the run in the oil stocks meant it was time to take profits on some. Why not sell all of the oil stocks? Because the mutual funds are going to come in and drive the stocks even higher, he said. In his pick of the week, Cramer tapped Medco ( MHS), which got hammered on news that UnitedHealth Group ( UNH) bought PacifiCare ( PHS). But that reaction was misguided, Cramer said. Medco does a lot of fulfillment work for UnitedHealth and that's where PacifiCare does a lot of business as well, so the thinking is that Medco will eventually start losing business. Wrong, said Cramer. He would be a buyer of Medco here. Cramer has been negative on the banks lately. Guest Tom Brown of Bankstocks.com said he would be a buyer of Commerce Bank ( CBH) and a seller of Bank of America ( BAC).
As for Bank of America's purchase of MBNA ( KRB), Brown said that Bank of America bought one of the weaker credit card companies in the space. But Cramer said: "The banks were a much loved group, but no more." It's time to sell, he said. As for the security stocks that rallied on the London bombings, Cramer said he would be selling the entire group. Short term, the stocks do well, but long term they are losers. Cramer said he would sell stocks like Ipix ( IPIX), Digital Recorders ( TBUS) and Magal Security Systems ( MAGS - Get Report).