“A feast for greed”: Kramer warns of excessive risk in the stock market

CNBC host Jim Cramer noted on Monday that he is seeing signs of “excess” in several market segments. He said that the recent sharp rise in the stock market made him a little worried and warned investors not to be too greedy.

“If you're lucky enough to participate in these seemingly excessive markets, I think you should appreciate these gains,” he said. “This means that if you hold certain stocks and have doubled or even tripled your returns in just three weeks, you should consider making an appropriate profit settlement.”

Cramer pointed out that after the “Republican Party wins” election results, stock indexes usually rise because Wall Street looks forward to deregulation and tax cuts. However, he specifically mentioned that many of the strong performers are not well-known stocks or members of the “Magnificent Seven” (Magnificent Seven). He looked at 66 mid-cap stocks that rose more than 50% in November, and emphasized that some had a stronger foundation while others didn't.

He said his concerns might lessen if these gains were concentrated in just one industry. He mentioned a range of sectors, including tech stocks, artificial intelligence-related companies, fintech, space, and new energy industries. Additionally, he mentioned so-called “Trump concept stocks,” which are stocks sought after by Wall Street due to expectations of Trump's post-presidential policies, such as private prison operators and oil service companies.

Despite this, Cramer stressed that he is not advising investors to completely sell popular stocks in their hands, but rather make an appropriate profit, as most of these strong gains are unsustainable.

“Trust me, these gains are extremely rare and tend to subside eventually,” he said. “So grab the gains you already have, appreciate these gains, and make sure not to turn a win into a loss.”