This is not a normal market

CNBC's Jim Cramer warned on Monday that investors should be cautious, as more and more stocks are valued on the basis of measures other than the earnings or profits generated each quarter by their underlying companies.

Too many stocks are trading on "nontraditional valuation measures" that make the market more difficult to determine, which the host of "Mad Money" said, recalls an infamous period there there are twenty years or so.

"You have to be skeptical about markets, entire markets, where more and more stocks are valued on other than profits." That's what happened during the Internet crash – you had tons of companies negotiating eyes and page clicks, "he said. "The more securities traded on strange indicators, the more likely the market will be overvalued."

During the dot-com bubble, from the mid-1990s to the early 2000s, highly speculative Internet stocks were Wall Street's most popular assets. The Nasdaq, heavy in technology, finally collapsed, losing nearly 80% of its value in seven months in 2000.

Wall Street trading was practically flat during Monday's trading session. The Dow Jones Industrial Average rose less than 15 points to 26,950 points, while the S & P 500 and Nasdaq Composite both fell 0.1%. There are too many "disparate metrics" to follow, Cramer said, highlighting companies such as Netflix, Facebook and Alphabet to back up his record.

Netflix shares were down nearly 1.8% a day after the streaming platform won four awards at 71st Emmys, falling short of the nine HBO statuses and seven statuses of Amazon. Cramer explained the decline in the stock price in response to Netflix 's results at Sunday' s event. The company would probably have seen a sharp increase in subscriptions if it had won more prizes against its two rivals.

"There's nothing that made people say," You know what, wow … see all these rewards? I miss too much content. I have to register. "And that's why actions have been affected today," said the host.

As for Facebook and Alphabet, Cramer said the shares of the internet giants would be higher if they were judged by profits. Instead, their shares were traded on the basis of new updates from antitrust investigations on companies. Facebook's shares fell 1.6% on Monday after a Wall Street Journal report said its competitor Snap was working with the Federal Trade Commission to tackle the uncompromising tactics of the giant's social media.

Google's parent, Alphabet, which faces federal and national investigations, has managed to gain 0.39% because no new negative has been published about the company.

Cramer also noted that other actions, such as Johnson & Johnson, McKesson and Boeing, are trading primarily on bad publicity and not on results.

"I still have a dozen examples in mind – a dozen examples of stocks that simply do not trade in profits or sales," he said. "When there were only a few names, everything was fine, but these days, there are so many that it has become much more difficult to analyze what is happening on the market." in general."

The facilitator indicated that it was prudent to have only one or two stocks of companies judged by "odd measures" because they required a lot of patience. He also suggested buying other names with a high dividend yield and being skeptical of a market that is not largely earnings-based.

"You can only go up so long based on something other than profits before you have to accept that valuations have collapsed." In other words, it's not a normal market, so you have to pay attention."

Disclosure: The Cramer Charitable Trust owns shares of Facebook, Alphabet and Johnson & Johnson.