Mad Money w/ Jim Cramer 7/23/26

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**Jim Cramer** (0:57)
My mission is simple, to make you money.

**Jim Cramer** (1:01)
I'm here to level the playing field for all investors.

**Jim Cramer** (1:04)
There's always a bull market somewhere, and I promise to help you find it. Mad Money starts now.
Hey, I'm Cramer.

**Jim Cramer** (1:14)
Welcome to Mad Money. Welcome to Cramerica. I'll be willing to make friends. I'm just trying to make a little money. My job is not just to entertain, but to teach. And I'm telling you, I'm going to do a lot of teaching tonight. So call me at 1-800-743-CBC or tweet me at Jim Cramer. Tough days do not last forever.
But when they come along, you need to know how to respond. You need a game plan ready so you can figure out what kind of sell-off we're dealing with, and then react appropriately. Because the early days of the decline are never easy to navigate. You need all the help you can get. To borrow a line from Tolstoy's Fantastic Anna Karenina, all happy rallies are alike. Each sell-off is unhappy in its own way.
It's true, bull markets and stocks hire, and everyone thinks they're genius participating because it seems so darn easy. Same every time, but big declines, much harder. They could be the start of a bear market, or maybe something worse. Or they might actually be just a buyable glitch.
That's why tonight we're turning to history to illustrate some of the common qualities of sell-offs, so you know what to do the next time the market has an inevitable moment of weakness. Now, really, there have only been two truly horrifying sell-offs since I started investing over four decades ago. The one-day crash of 1987 and the rolling crash of 2007 to 2009 That was the financial crisis. Do you know what? Even the COVID crash when the S&P lost 35% of its value in just over a month, that wasn't nearly as bad as these two, especially when you remember that the market started rebounding almost immediately. So let's deal with the two big ones head on, because they make for great examples. 1987 and the financial crisis are actually polar opposites, although the percentages of the clients are really pretty similar.
On October 19th, 1987, also known as Black Monday, the Dow Jones Industrial Average fell 508 points, or more than 22% in a single session.
I was trading that day, and even the previous week had been one of the worst weeks in market history. Black Monday hit fast and hit hard. It felt there were no buyers to be found from Dow 2,246, where the crash started, to Dow 1,738, where at last it ended that day. It kept tumbling right into the close. I remember thinking, saved by the bell! Except it felt like there wasn't that much money left to be saved. But most people don't remember that the week before was horrendous, too. The Dow had already plunged from 2,482 to 2,246. That's only a 10% decline. That harsh pullback encouraged bargain hunters and trippin souls who thought they could flip from Monday morning into some strength. You bought Friday, flipped it on Monday, except the strength never showed up, and they got badly burned.
In fact, the week just continued to the next day. That day became known as Terrible Tuesday, where the Dow kind of just broke down entirely. The market simply stopped functioning. But you know what? I was there, and I was actually able to calculate that bottom. The bottom turned out to be about Dow 1,400. That was down another 122 points, or about 7% from where we closed on Black Monday at the end of the day. It was all just, I pieced them together one by one. And people didn't think it ever went down below Dow 1600, but they were wrong. Then Fed Chairman Alan Greenspan stopped the decline in his tracks when he said he'd provide all the liquidity necessary to stabilize the market. Now I still remember that green line when it came over your screen. He enlisted multiple firms around Wall Street to help put in the bottom. And the market staged a remarkable two day rally that took the Dow up more than 400 points from its lows. It seemed pretty unbelievable at the time. The effects of the crash lasted for just three months when we had a retest at Held. But do you know that it took until mid-1989 for the averages to return to where they were trading before this big breakdown? The bear market that began in October of 2007 was a totally different animal. Dow fell from 14,198, so it was at 14,000, remember the other one was at 14,000. And it didn't bottom until March 6th of 2009 when it landed at a staggering 6,407.