On Sept. 23, Jim Cramer urged investors to trim winning positions when position size, valuation or market momentum makes risk excessive, warning paper gains can disappear. He said this is not a prediction of an imminent crash or a call to abandon winners.
The Nasdaq Composite more than doubled from March 2020 to November 2021, then fell roughly 36% from its peak to its October 2022 low, the article says. Cramer calls owning Meta, Amazon, Netflix and Alphabet “faux diversification,” arguing that their exposure to technology spending, advertising, consumer demand and interest rates overlaps.
The article cites ARK Innovation ETF as an example: it gained 153% in 2020, then fell 23% in 2021 and 67% in 2022 as rates rose and its concentrated holdings declined together. Cramer advises researching companies and building positions gradually, distinguishing a market-driven dip from a weakening business. The article also notes Zoom fell from about $588 in October 2020 to the mid-$70s less than two years later as pandemic demand faded and Microsoft, Google and Cisco intensified competition.
