Jim Cramer's 'Mad Money' Recap: Don't Fear the Selloff

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NEW YORK ( TheStreet) -- Do not fear the coming selloff, Jim Cramer said on "Mad Money" Tuesday.

Tomorrow's Federal Reserve news will most likely send the markets lower, said Cramer. Investors need to be patient and sit on the sidelines until the chaos subsides.

Cramer said the markets will be running the gauntlet over the coming weeks because as soon as the Fed announcements are out of the way, the wrangling in Washington will begin and thus continue the selloff. The selling won't be over in a day, Cramer warned, which is why he continues to urge investors to raise cash so they can be ready when the time to buy returns.

Why not just sell everything? Because this time the U.S. isn't the only game in town, so what the Fed has to say just isn't as important, according to Cramer. There are other factors, mainly China and Europe, that are helping the global markets along, which makes tomorrow's news just a bump in the road.

That's why Cramer said he'd only commit half of his cash after the market falls between 2% and 3%, then wait a few days longer to see if things get really ugly when Washington gets rolling. Fund managers will be returning to buy on the selloff eventually, he noted.

Meanwhile, companies are taking charge of their own destinies through mergers and acquisitions, as well as with a little help from an uptick in activist investing.

All of these points will lead to a strong fourth quarter, Cramer concluded. Investors just need to wait until stocks have run the gauntlet before getting back to buying.

Executive Decision: Chip Johnson

In the "Executive Decision" segment, Cramer spoke with Chip Johnson, president and CEO of Carrizo Oil & Gas ( CRZO), the oil shale driller that's seen its shares soar by 70% since Cramer last spoke with Johnson in February.

Johnson explained that Carrizo had a strategy of aggressively drilling and establishing itself in many shale regions throughout the country. But now that it has enough wells to hold onto its acreage, the company is scaling back and selling non-core assets in order to fund its continued operations. He characterized the move as better matching capital expenditures to cash flows.

That strategy has worked well, Cramer noted, as Carrizo has now overcome its funding gap and can now fund operations through 2014.

Johnson cited the Niobara shale field in Colorado as one of Carrizo's many untapped assets. He said the region is just getting started but so far has been very profitable. Meanwhile, his company has been selling some of its Barnett shale assets as those wells have been primarily producing dry gas, which is not Carrizo's strong suit.

When asked about the possibility of being acquired, Johnson said that every small producer is being studied by larger companies, but he remains focused on growing and establishing his company's acreage and is not pay attention to possible acquisitions.

Cramer said Carrizo remains a great growth story and he remains a believer in the stock.

More Anointed Stocks

Continuing with his "Anointed Stock" series, Cramer looked at the best-performing biotech stocks of the year with the help of colleague Bob Lang for some technical analysis.

First, Lang looked at Celgene ( CELG), a stock that's been running since mid-August on high volume. Lang felt that with the MACD and Williams' oscillators both showing an embedded overbought condition, this stock would rally hard through the end of the year, after first pulling back to its 50-day moving average of $140.

Next, Lang looked at Regeneron ( REGN), which after rallying from $170 to $300 a share broke out over a double top to continue to new all-time highs. Lang noted the RSI and Williams' oscillators also showed strong overbought conditions, making this stock a buy after it pulls back to its floor of support at $275 a share.

Then there was Gilead Sciences ( GILD), which Lang said had the best trend line of the bunch. Lang felt this stock could be bought even without a pullback.

Lightning Round

In the Lightning Round, Cramer was bullish on ARM Holdings ( ARMH), Intel ( INTC), Zoltek ( ZOLT) and Cisco Systems ( CSCO).

Cramer was bearish on Baidu.com ( BIDU), Coach ( COH) and Arena Pharmaceuticals ( ARNA).

Executive Decision: Jean-Jacques Bienaime

In the "Executive Decision" segment, Cramer spoke with Jean-Jacques Bienaime, CEO of BioMarin Pharmaceuticals ( BMRN), the orphan-drug maker whose four drugs have already racked up over $500 million in sales thanks, in part, to their high price tags of between $95,000 and $350,000 a year. Shares of BioMarin are up 28% since Cramer last featured the company in June.

Bienaime explained that with orphan drug makers it's not about the number of patients who you treat, it's about improving the quality of life for those you do. He said the patient populations they serve run between just 200,000 patients in the U.S. down to just 10,000 patients. But with no other alternative treatments available, insurance companies are willing to pay the drug's big premium since it makes such a huge difference.

Bienaime also touted his company's fifth drug, which is currently in Phase III testing, as a game changer for BioMarin because that drug also could more than double the company's revenue.

When asked about the scores of patients who are literally dying to get into new drug trials and studies, Bienaime said BioMarin works to get effective and safe drugs onto the market as quickly as possible, but it can't always accept new patients into their studies because they require randomized samples and double-blind studies.

Cramer called BioMarin one of the strongest biotech stories out there and one investors need to investigate.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer threw up his hands and said it's time to surrender all hope that Washington will ever understand the potential of oil and natural gas in our country. "How can this be so hard?" he asked.

Nearly all of the objections to natural gas have been met or debunked, Cramer continued. Yet, you'll be hard-pressed to find any elected official who's not on the renewable energy bandwagon touting solar and ethanol rather than stopping oil and gas imports from hostile nations.

Cramer said it's almost as if Congress has declared war on gaining energy independence and is now seeing higher gas prices as an incentive to conserve. Renewable energy, he concluded, is like a religion in Washington that cannot be stopped.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

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

To email Scott about this article, click here: Scott Rutt

Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

At the time of publication, Cramer's Action Alerts PLUS had a position in CSCO.

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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