'There's a lot of stupid money' — Jim Cramer implores new investors to take profits

Published Thu, Sep 3 20204:56 PM EDT

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

(This story is for CNBC Pro subscribers only.) CNBC's Jim Cramer pleaded with new investors to take profits after Wall Street's sell-off Thursday , with the Dow Jones Industrial Average sinking more than 800 points, or 2.8%. "I think there's a lot of stupid money, and the stupid money has made fortunes. God love them. It's fantastic. But they have to take something off the table so they're not going to be poor again. They didn't do it in 2000," Cramer said on "Closing Bell." The Nasdaq Composite — which entered the session after its first-ever close above 12,000 — dropped 5% on Thursday while the S & P 500 gave up 3.5%. Technology stocks, which comprise the majority of Nasdaq offerings, have led the market higher since its late March coronavirus-lows. But on Thursday, the S & P 500 tech sector posted its biggest one-day loss since March, closing lower by 5.83% and ending a 10-day win streak. The coronavirus pandemic helped create a wave of new investors who started buying stocks for the first time, seeing the massive sell-off that occurred in late February into March as a great buying opportunity. And so far, it has been, with stocks mounting a robust recovery after their pandemic-era bottom on March 23. The rally has undoubtedly created millionaires, Cramer said. "I've never seen so much money made so easily in my life." But he stressed Thursday that investors have only profited after they have sold some of the stocks in their portfolios; until then, the gains are only on paper. Crame r issued similar advice in late June . On Thursday, in particular, Cramer called out investors who have bought stocks on margin, meaning they've borrowed money from a brokerage firm to make an investment. "I'm imploring the younger people who are watching to understand that you can't keep borrowing money and say you're a millionaire. Become a millionaire," he said. "I am asking you please to take something off the table so you don't say, 'You know what, what was I thinking?'" Cramer, host of "Mad Money," said this was a mistake made by money retail investors who snatched up stocks during the dot-com boom of the 1990s and then lost their gains when the bubble burst in March 2000. And although the current market landscape is not perfectly comparable to nearly that situation 20 years ago, Cramer stressed, "We can't have these people lose what they have."

Jim Cramer

Scott Mlyn | CNBC

(This story is for CNBC Pro subscribers only.)

CNBC's Jim Cramer pleaded with new investors to take profits after Wall Street's sell-off Thursday, with the Dow Jones Industrial Average sinking more than 800 points, or 2.8%.

"I think there's a lot of stupid money, and the stupid money has made fortunes. God love them. It's fantastic. But they have to take something off the table so they're not going to be poor again. They didn't do it in 2000," Cramer said on "Closing Bell."