After CEO Jensen Huang resigned Thursday, Jim Cramer offered advice to Nvidia investors who had built up big gains in the stock. "The No. 1 principle behind the Club since we started is capital preservation," Jim said on the Morning Meeting. "Don't let a gain turn into a loss. Make sure that you are balanced in terms of taking profits." Jim said many members followed his recommendations and bought Nvidia shares long before the company's market cap approached $6 trillion last month, back when Huang had yet to become a rock-star CEO. In some cases, he added, they have become millionaires from their Nvidia positions. Addressing those investors with sizable profits on paper, Jim said: "You should take something off the capital, because you have to preserve capital. That does not mean that I think Nvidia is worthless, or that I think it's worth $200 or that I think it's worth $100. ... The Club is about discipline. It's about rules. It's about the way you invest." Despite a leadership shakeup that would've been unthinkable a few weeks ago, Jim…
Sitting on big gains in Nvidia? Jim Cramer's advice on what to do next
In short
Jensen Huang stepped down as chief executive following reports of an extramarital affair with a subordinate executive. Longtime Chief Financial Officer Colette Kress has assumed the role of interim CEO, drawing comparisons from Cramer to Apple's transition from Steve Jobs to Tim Cook. With shares trading near $163 intraday after recovering from morning lows, Cramer highlighted the rebound as an ideal moment to trim holdings.
Key points
- Investors holding substantial profits are advised to trim their positions to preserve cap…: Investors holding substantial profits are advised to trim their positions to preserve capital rather than risking paper gains.
- The company possesses a deep bench of engineering talent capable of maintaining stability…: The company possesses a deep bench of engineering talent capable of maintaining stability through major executive turnover.
- Disciplined investing requires taking profits off the table periodically even when mainta…: Disciplined investing requires taking profits off the table periodically even when maintaining long-term confidence in a business.