How Jim Cramer navigates a market selloff

CNBC’s Jim Cramer offered advice on how to deal with declines, using Tuesday’s bearish session as an example. He encouraged investors to use widespread losses as a buying opportunity, noting that indexes managed to rebound on Wednesday.

“If you trust the market, if you don’t believe one stock controls the entire band, if you ignore your fears and consider the opportunities,” he said. “A day like yesterday might be the way to finally get the chance to start diving; not all at once, that’s for fools, but gradually.”

Major indices fell on Tuesday, largely accounting for an 8% decline. palantir and AI stocks come as investors worry about the inflated valuations of many of these tech companies. Palantir’s losses come on the heels of it taking a hit at both the top and bottom lines and providing stronger-than-expected guidance.

On a day like Tuesday, Cramer said it would be prudent to find a stock that reported a good quarter but shares fell due to Palantir’s losses. He suggested choosing a company that investors are familiar with and have done extensive research on.

He named two companies he thought would be good buys due to weakness: Shopify And McDonald’s. Cramer said Shopify is a large company that trades futures. He argued that the decline in stocks on Tuesday was not a problem in the business world but was due to a broad decline, noting that management had said it expected a strong holiday season. Cramer said McDonald’s isn’t bothered by the loss of earnings and that this is a difficult time for the restaurant industry as a whole. Unlike some of its burger chain peers, Cramer said McDonald’s has tremendous scale and power and is pushing to lower prices as consumer spending weakens.

“As we saw today, yesterday was a good time to start buying,” Cramer said. “And even if you missed it, I hope you keep that experience in mind the next time the averages go up.”

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Disclaimer CNBC Investment Club owns shares of Nvidia.