On the 20th anniversary of Google‘s market debut, CNBC’s Jim Cramer looked back on the stock’s impressive climb and advised investors to stick with good companies for the long term, even if it means shouldering some short term losses.
He first addressed Monday’s Wall Street action, noting the market’s eight-day winning streak. These kinds of gains can create a “fraught situation,” he said, and will likely be followed by declines. When the market seems overbought, investors don’t want to own too much stock, but at the same time, they don’t want to lose long-term winners, he said.
Google stock has seen a more than 7,700% gain since its IPO, and Cramer said many did not capture the gain in its entirety.
“Why? Because they rang the register too often on the way up,” he continued. “When you’re dealing with truly great companies, not the indices, but the companies themselves I sing the praises of, the real risk is that you panic and get shaken out. I challenge you to be able to handle it.”
Even though Cramer’s Charitable Trust has owned Google shares for at least a decade, Cramer said he doesn’t like everything about the company. He said he’s not pleased with Google’s antitrust lawsuit, and he wondered whether its search business could be seriously challenged by new artificial intelligence bots. However, Cramer emphasized that Google has garnered huge gains for the trust. He suggested it will continue to stay in the portfolio because the company has “been able to reinvent itself repeatedly,” pointing to the fast growth of its cloud business.
Along with Google, other Big Tech names — such as Amazon, Apple, Microsoft and Nvidia — are subject to a “tug-of-war” dynamic, according to Cramer. He said some on Wall Street refuse to “take the pain” when it comes to these stocks, selling them off and then buying again.
“The tech titans, the hyper scalers, the colossus portion of the market, yes, the mega stocks—they just bite you every time you sell,” he said. “But the short term says sell. To me, that means it’s time to get into the bunker and accept the acceptable losses that you can’t avoid. These stocks are just too good to let go.”
Google did not immediately respond to request for comment.
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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Alphabet, Amazon, Apple, Microsoft and Nvidia.
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