In particular, Cramer said high-flying tech stocks in particular cannot be owned forever. Technology changes too rapidly and what's red hot this year likely won't be next year. Likewise with cyclical stocks, said Cramer -- just because the economy is great today doesn't mean it will stay that way tomorrow.
"Tech stocks are not the same as staple stocks," Cramer explained. There are tech cycles and there are economic cycles but there aren't cycles for Cheerios or Hershey bars. Learn from the dot.com bust of 2001, Cramer reminded viewers. Investors need to be ready to sell when the time comes.
When it comes to high-flying stocks, Cramer concluded, "take profits on the way up, get out on the way down and be ready to jump ship when the time comes."
--Written by Scott Rutt in Washington, D.C.To contact the writer of this article, click here: Scott Rutt. To follow the writer on Twitter, go to http://twitter.com/scottrutt. To submit a news tip, send an email to: firstname.lastname@example.org. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV