CNBC's Jim Cramer said Tuesday that some of the stock gains in the market are "insane," with investors recently buying certain names from Tesla to Royal Caribbean seemingly without regard for fundamentals or the state of the coronavirus pandemic and holding onto them.
"Where are the profit-takers" after these dizzying moves higher? the "Mad Money" host asked.
Cramer called the current environment "the most speculative market I've ever seen," hitting on a recent theme in which he's been dumbfounded by the kinds of moves in so-called Robinhood stocks, names being gobbled up on the online trading platform favored by younger investors.
"You can't lose in that market," he said, adding "it's like a slot machine" that always pays out. "I've not seen this in my career," stressed Cramer, who came to Wall Street in the mid-1980s after joining Goldman Sachs and later became a hedge fund manager before becoming a financial journalist.
Cramer questioned how this type of buying can continue, pointing out that in the past such speculation has been met with a big sell-off. However, he said that such a downturn has not happened yet despite coronavirus cases in the U.S. and around the world hitting record after record, which could threaten the nascent economic recovery from the depths of the pandemic in the spring.
In the case of Tesla, Cramer called it a technology company not just an automaker. He said that Tesla's more than 500% gain this year alone could not be justified any other way.
Cramer has been a fan of Tesla for a while, even buying one of the electric vehicles. "These are ridiculous" moves, he said but added it's not 1999, referring to the dot-com bubble that later burst. "Investors just like Tesla," he contended. The strong move in its shares Tuesday pushed the company above a $500 billion stock market value.
The Dow Jones Industrial Average opened about 300 points higher Tuesday, with the Trump administration approving Joe Biden's transition and the president-elect set to pick former Federal Reserve Chair Janet Yellen as Treasury secretary. Gains accelerated — and late morning, the Dow hit 30,000 for the first time ever.
Tuesday's trading featured so-called reopening stocks like airlines and cruise lines getting another boost. Tech stocks — seen as beneficiaries of the pandemic stay-at-home economy, which would abate in a post-vaccine world — were relatively steady after a rough Monday that put a cap on the Nasdaq's gains.
On Monday, the Dow soared 327 points after AstraZeneca and Oxford said their Covid-19 vaccine was up to 90% effective, in a third straight Monday of encouraging late-stage trial data.