Apologies to investors that thought they were suddenly a stock picking genius overnight, but Jim Cramer says there's a stronger force at work.
Stocks have been going up because of the positive backdrop created by President-elect Donald Trump, Cramer said. Trump is the most pro-business President-elect he has seen in ages. The results of his victory are unfolding in the market every day.
"It's not that we have all become a bunch of genius stock pickers overnight. It is that we are in the right place at the right time, the stock market in this post-election era of good feelings," the "Mad Money" host said.
Cramer compared the stock market to a game of leapfrog. When one stock moves up, it causes others in the sector to be revalued higher, almost instantly.
An example of this was Southwest Airlines. When CEO Gary Kelly appeared on "Mad Money" on Dec. 7, the stock was selling at just 12 times next year's earnings estimates. It was widely regarded as the best run large-cap airline in the U.S., which means it can trade at a premium to the rest of the group.
"But we are in a moment where many of the big institutional investors driving this market don't seem to be that bright, to put it diplomatically," Cramer said.
Disk drive and flash memory maker Western Digital has been red-hot since the company preannounced better-than-expected earnings last week. The company historically has traded in tandem with Seagate, but Western Digital has since transformed itself thanks to its acquisition of Sandisk that allowed it to expand beyond the PC and into more of an internet of things play.
Meanwhile, Cramer says many investors aren't even aware of Western Digital's transformation. So when they see the stock fly, they buy Seagate.
The moves of the market are fueled by three items on Trump's agenda: lower corporate taxes, deregulation and the ability to repatriate overseas capital. Wall Street clearly believes these initiatives will reignite the kind of growth that existed before the Great Recession.
Investors only play games like leapfrog when there is a very positive backdrop, Cramer said.
"You don't have to get involved in kids' games like leapfrog. Just own the stocks of great companies that are undervalued and let them go higher until they get so expensive that they need to be sold," Cramer said.