I distinctly remember the article in CNNMoney.com which profiled the meteoric rise of Crocs (CROX) from a small shoe company — crediting an innovative distribution model and Hollywood celebrity endorsements. Yet, what is trendy yesterday is crap today. They are down from an October 2007 high of 75.21 to Wednesday’s current low of 9.70.
Seeking Alpha gives two other “hot brand” stocks that rallied tremendously only to peak and never recover. Below are examples such as Krispy Kreme Doughnuts (KKD) and Hot Topic (HOTT).
Their lesson at the end of the day is there are huge profits to be gained on the upside of a super-hot consumer product or trend but be ready to exit if the trend starts to get ugly.
