Most stocks trends end because of SCENARIO TWO I outline in this May 2007 post on Crocs (CROX). It’s one of my favorites.

When you buy common stocks, based on your, mine or Cramer’s research or missives, we won’t be there to hold your hand when the stock immediately turns south. It’s why I try and temper my excitement for stocks on this blog, especially in horrid markets like this. I love stocks and can’t help talking about them, but keep more and more of it to Twitter.

The title of this blog is not buy, buy more and never sell. ‘Getting Off’ is the most important part of any investing strategy.

In one of our first Wallstrip’s (November, 2006), I was cycnical of Whole Foods (WFMI) (than in the 40′s). I tried to explain early on in our show about Hot stocks in Hot trends, that Trends End! I thought Whole Foods, despite being a great company, was dealing with a broken stock.

Who cared what the reasons were. The average investor will never know the reasons until it’s too late and the Company is ‘LOOKING FOR A FRESH IMAGE ‘ . OY! It’s just not that complicated if you heed to PRICE!

My friend Fred wrote something the other day:

Web services are like cars or soft drinks. There’s room for many of them to coexist peacefully. You might like to drive a Honda, drink Coke, and use AIM to talk to your friends. I might like to drive a Chevy, drink Pepsi, and use Twitter to talk to my friends.

Yes, like cars and soft drinks, web services compete with each other for customers/users. But there are almost a billion internet users globally these days. And you can build a very nice business serving millions or ideally tens of millions of users.

So I’d like to suggest that we stop focusing on who is going to kill whom and instead think about market share, business model, sustainability, and profitability which are the measures that people in most businesses tend to focus on.

He’s right, especially when you are looking to back start-ups. Unfortunately, for the average common stock investor, this thinking will get you broke and fast. Again, there are just too many hands in the pot ahead of you…the lowly ‘common’ shareholder.

So wise up, take some responsibility and learn to SELL. It’s not a game and no matter how small you think your portfolio is, it’s not and should never be looked at as your gambling money. You will have more fun and have way more ‘Happy Endings’ gambling in Vegas!

PS – I was in a Circle K buying some ‘Tiger’ Gatorade and escaping the 115 degree heat for a minute and I saw a spinning rack full of CROCS (CROX) knock-offs for $4.99. This was an in your face, ‘f%#ck you your are dead and won’t bother even suing me’, knockoff. I pulled up a chart remembering the last time I looked it was $10 a few months back (down from $90). Let’s just call $10…’the glory days’ :) .

The freaking story always ends the same way. It’s why you sell on the way up in a disciplined fashion and forget about catching tops. I remember selling in the 40′s and 50′s and selling the last piece was lazy. That in hindsight looks fine.

In May, I outlined how it would end because it’s always the same .

Crocs management had some power to manage this ending in a better way They behaved the same as management at all highflying stocks, they believed their own shit. The few that might have had religion and preached a diversification strategy would be SCOFFED at Board Meetings.

Here is what they should do in rapid succession:

1. Split 8 for 1 . That will confuse and frighten short-sellers.

2. Give away Crocs at airports all over the world. $20 million worth of Crocs in a weekend bonanza. Just hand them out as people approach the X-Ray machines. Instant customers. Instant.

3. Announce a share buyback.

4. Fire their Bankers for no reason. Just say the whores wanted us to dilute you, our wonderful common shareholders in a big public display. Use a Pinata that looks like the Goldman Sachs logo as you ring the opening Bell.

Here is What will likely Happen:

1. Goldman and other Bankers will convince management to do a massive secondary offering.

2. They will use that money to help you buy a bunch of useless companies

3. You will lose focus and Crocs Underwear will be a flop. Men with amazingly sweaty balls will sue you.

Stock will roundtrip.

Can’t say when

Now we know when. It will get worse before it gets better if it gets better at all. Great product for sure but the thrill is gone.

I long sold this trendy biiitch. Still love the products. Until tonight my sells looked stupid, now just less so. The lesson is that trends end.

Expectations get too high, stocks get too loved, investors become complacent…now that CROX has a severely halted trend, the stock will act much differently. The shorts will become emboldened, especially those that just did so the last few weeks. A much bigger tug of war between the lovers and haters will take place. Here is the Whole Foods piece I did last year on Wallstrip that walks you through what happens when stock trends end. TIME is what the stock will really need now.

The end of Brian’s video tonight is a great walk-through of what can go wrong:

Wellcare (WCG) is an awesome example of why you must sell when given a chance. If you do this long enough, you just have stocks like these. Based on the tremendous runs in leading stocks, I expect much more of these scenarios over the next few years.

No strategy is perfect. Don’t fall in love with broken trends. They can end with a bang or a whimper but will eat your capital and spit you out if you get lazy or complacent.

Last night he just killed it and his CROX reference got me laughing and thinking…maybe the CROX trend is just too well known. It’s definately in the public consciousness if he can make so many people laugh while making fun of it.

Anyways…definately later than earlier in this trend and risk is higher now.

It’s about 90 second in:

New Rule: Stop wearing plastic shoes. It was only a year ago when only preschoolers and mental patients wore these. But, now grownups all over America have gone “Croc” crazy. The latest step in our unending quest to dress as casually as humanly possible. “You know, I used to wear flip-flops, but they’re a little dressy.” “I want clothing I can hose down.” Admit it, we’re a nation of slobs who won’t be happy until we can go to the mall in a diaper.

Genius stuff.

Disclosure – Long some shares in kids account

If I were a contrarian, I would be shorting the crap out of this stub.

Than again, if I trusted our viewers I would be long. I know many of them, they are the last people I would take advice from on a stock or money :) .

Instead I lament a trend I got off too early. Serenity now!

It’s fun to catch a trend like CROX. It can happen to you too.

BUT, today we are asking for price predictions and want yours. Go watch today’s CROX show and give us your price projection for 30 days out in the comments. Lindsay is dying to crank out a custom pair just for you if you are the closest on September 21, 2007 – 30 days out.

Keep the foot comments to yourself.

My children and I each bought two new pairs today and the stock is uo about 20 more percent as we speak.

I have only converted one friend to covering – the smart Andy Swan (about 20 points ago now). Andy is a good friend and would not nag me if the stock would have tanked after forcing him to cover. But, he’s also the first guy to thank me.

That’s why I blog.

Here come the emails again and the haters. I actually like the haters, but will continue to delete their sophmoric comments.

Disclosure – My kids own the stock. Always will. Me – I sold too early.

Now that the dust has settled on the swoooon of the last 10 days, my portfolio is little changed on the year (up a few percent). I was hit, but not that bad.

I was stopped out of nothing despite the massive selloff. Taking profits in CROX, RIMM and AAPL the last few months actually saved me NOTHING. They are all higher than where I sold them DESPITE the correction.

I do think CROX is done.

I added Starbucks, Electronic Arts, International Game Technology and a few gold stocks. I did not add more BIDU (It’s on my CODE RED list). I love the BIDU model, but hate China as an investment vehicle. Too loved anyway.

I totally missed some fast market dips in the Malaysia ETF (EWM) and Webex (WEBX), two stock and areas I like.

All I really notice is that the stocks that sucked before – HOMEBUILDERS – suck worse. That is something I have been saying.

The market is hard for sure. If you did not know that two weeks ago, you know now. It is just not that complicated.

If you were heavy on margin, you should not be. If you owned crap stocks before the swoon, they will be crappier. If you own the strongest stocks like I do, they were whacked and you should be on guard. If you did not add some of the best brands and growth stocks like I mentioned and added, you should not be investing by yourself.

He has a good post on the three stocks trying to game the top .

I sold my CROX based on a bunch of factors different than Andy and same for RIMM. Apple, as I mentioned last week, I am selling down but will hold a position until they have clearly done going up. None of these three stocks are CLEARLY done going up.

I have already said that I had booked a long term RIMM trade at $130 and I sold my last piece of CROX in the high 40′s.

I do not own Loral and should have bought the day of our show. It was a great all-time high set up. So was Green Mountain Coffee (I don’t own). If I owned both I would be selling 1/3 to 1/2 my position and my stops would be higher now as well.

I will try and give more updates. In the meantime, there is a widget on the Wallstrip page that keeps track of the stock prices from the day the show aired.