CNBC’s Jim Cramer said Thursday that investors can avoid paying back big gains in high-flying stocks by following one simple rule. “When you get a parabolic move, sell half of it, because you can’t beat a parabolic move,” Kramer said on “Squawk on the Street.” “We don’t know when the rise will stop.” Parabolic movements are rapid and large stock price increases. It often starts with good reason, before the animal spirits of the market take over and push stock prices to overheated levels. The danger is that they can disappear just as quickly, and in some cases even more drastically. Some of the market’s biggest AI infrastructure winners have made big exits this week after making big deals earlier this year. Micron fell 12%, SanDisk fell 22% and Dell fell 7% in what Kramer described as a “rewind” that sent money back to Amazon, Microsoft, Apple and others. All three mega-cap hyperscalers are in the CNBC Investing Club portfolio. Kramer said the recent “unwind” doesn’t change the long-term story for AI, but it does highlight the importance of taking profits after large moves. “One thing you never want to do is turn a profit into a loss,” he stressed. And certainly, Micron, SanDisk, and Dell are still much higher year-to-date. The “Mad Money” host cited Arm Holdings and Corning as examples of stocks that expanded after making significant gains. That’s why Kramer recently relinquished his arm position with the club and sold Corning stock several times in late June at far higher prices than its current stock price. “Stocks that go parabolic in the single market are stocks that have to be cut in half,” Kramer said. Investors waiting for easing will “incur huge losses in three to four days, and no one knows why.”
