Too often investors end up selling a stock at the wrong time because they never anticipated selling it in the first place, Cramer explained. Similar to the "Bristol-Myers theorem," if investors don't know what they own and why they own it, it's easy to panic at the first sign of trouble.
In particular, Cramer said that high-flying tech stocks especially cannot be owned forever, as 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, it doesn't mean the she will be true tomorrow.
"Tech stocks are not the same as staple stocks," Cramer explained. There are tech cycles and there are economic cycles, he said, 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. Follow TheStreet on Twitter and become a fan on Facebook. To submit a news tip, send an email to: firstname.lastname@example.org.