For example, what does it mean when a stock or sector is described as "cyclical" or "secular"?
Secular companies, on the other hand, are ones that can thrive regardless of the economy's health.
During a recession, people must continue to eat and brush their teeth with the products of secular companies, he explained.
That said, investors should aim to own both cyclical and secular stocks, he added.
"Now you always want some cyclical stocks and some secular stocks in your portfolio, because you can never be completely sure where the economy's headed.
Persons:
CNBC's Jim Cramer, Cramer