Enter multiple symbols separated by commas

Don't Run From Terrifying Events, Profit From Them

From European debt concerns to Egyptian unrest, Cramer said it seems the markets are threatened by a different disaster every other week.

"We now live in a world where the media is in total hurricane disaster mode every single day," Cramer said Monday. "They take every geopolitical issue, every weather issue, every story of crime and punishment and they fan the flames of panic, portraying them all as equally huge disasters. Every negative story is exaggerated to make it seem as though it's the end of the world."


So what can be done?


Step 1: Put it in perspective. The news story may be terrifying in and of itself, but investors should question how it affects their numbers. He noticed, for example, that Bristol Myers would rarely be affected by the latest disaster. Rarely would a news event affect this company's numbers.




Step 3: Identify beneficiaries of the event.

"If part of the problem in Egypt is the inability to feed people and our government wants to look good and get friendly with whoever comes in or stays in, then you have to reach for the fertilizers and the farm equipment stocks," Cramer explained, adding that Deere and Potash are choice names. "Or take the defense stocks; big potential beneficiaries of instability in the Middle East."

Step 4: Ask yourself whether the event could have a positive outcome. Michael Cembalest, chief investment officer at JPMorgan, pointed out that Egypt's economy is poorly run. The situation in Egypt, Cramer said, looks similar to what happened in Indonesia in 1965. The government was overthrown and Suharto took power. In the end, Cramer said it resulted in "fantastic" economic growth for Indonesia. Cramer doesn't know if Egypt will turn out that way, but the markets did go higher on Monday. His point is to avoid becoming overly negative.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com


Cramer's New Book