It's not a normal market

Investors should be cautious as more and more stocks are valued based on measures other than the revenue or earnings figures their underlying companies produce each quarter, CNBC's Jim Cramer warned on Monday.

Too many stocks are trading on "unconventional valuation calculations" that make the market more difficult to ascertain, something the "Mad Money" host said recalls an infamous period about two decades ago.

"You have to be skeptical of markets, entire markets, where more and more shares are valued at anything other than earnings. This is what happened during the dot-com crash ̵[ads1]1; you had many companies that traded eyeballs and clicks on the page , "he said. "The more shares that trade in weird calculations, the more likely the market is to be overvalued."

During the dot-com bubble, in the mid-1990s to the early 2000s, highly speculative Internet stocks were the hottest assets on Wall Gate. The tech-heavy Nasdaq finally collapsed, throwing nearly 80% of its value over seven months in 2000.

The Wall Street trade was virtually flat during Monday's session. The Dow Jones Industrial Average advanced below 15 points to just shy of 26,950 points, while both the S&P 500 and the Nasdaq Composite did not slip 0.1%. Cramer said, pointing to companies like Netflix, Facebook and Alphabet to support his cause.

Shares of Netflix were down nearly 1.8% a day after the streaming platform took home four awards on the 71st Emmys, short of HBO's Nine and Amazon's seven statues. Cramer framed the stock price decline in response to Netflix's viewing of the event Sunday. The company would probably have seen a large subscription increase if it had won more awards against its two rivals.

"There was nothing that made people say this: & # 39; You know what, wow … see all these awards? I miss too much content. I have to sign up. And it's therefore the stock was hit today, "the host argued.

When it comes to Facebook and Alphabet, Cramer said stocks in the internet giants would be higher if they were judged on earnings. Instead, their shares have been trading based on news updates about antitrust investigations in the companies. Shares of Facebook fell 1.6% Monday after a Wall Street Journal report said competitor Snap has been working with the Federal Trade Commission to address the social media behemoth's hardball tactics.

Google parent Alphabet, which faces federal and state investigations, managed to get 0.39% because there was no negative news coming out about the company.

Cramer also noted that other stocks, such as Johnson & Johnson, McKesson and Boeing, primarily deal with bad advertising, not with results.

"I have another dozen examples in my head. Dozens of examples of stocks that simply no longer deal with revenue or sales," he said. "When there were only a few of those names, it was good. But these days there are so many of them that it has become much more difficult to analyze what's happening in the broader market."

The host advised that it is safe to own just one or two shares of companies that are rated by "weird calculations" because they take a lot of patience. He also suggested buying other names that have high dividend yields and to be skeptical of a market that is largely not based on earnings.

"You can only go up for as long as based on anything other than earnings before we have to accept valuations. This is not a normal market, so we need to be careful."

Disclosure : Cramer's charitable trust owns shares in Facebook, Alphabet and Johnson & Johnson.