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.

If you held on, today you will likely be stopped out. It is a brutal part of the investment business. Too many great names right now for me to look at Smith and Wesson as a new position. The trend looks broken for now.

This morning’s plunge is a reminder of two other important investment habits you must practice:

1. Booking profits on the way up is not and a tool you must use.
2. Diversification

Stocks have had huge runs in the last few years, especially the stocks we have covered on this blog and Wallstrip. If you avoided this one, good. If not, sorry. Either way, use the Smith and Wesson news to remember that stocks don’t just go up. It sucks, but it’s reality. Don’t be hogs.

Buying the strongest performing stocks and adding great brands on 20-30 percent drops is what we do. It has been a great market so it’s not that we are smart, but we are proving that having a strategy works. Our first week of stocks from last October are up on average nearly 100 percent. They include Apple, RIMM, Chipotle’s, Adobe and Nike. Garmin, Baidu, Crox and Google have not been shabby. Starbucks, International Game Technology, Sony, Electronic Arts and Medtronic are companies that we profiled as brands you can own when prices get whacked. Only Starbucks has disappointed, but I remain long.

If you want to buy value and all-time lows…buy Warren Buffett, Berkshire Hathaway and the clones. They have proved they know what they are doing…you don’t.

Over time, Guns, Booze, Gambling, Internet and Sex will continue their outperformance. It may not be fair and may not seem right, but those that invest in these themes will be continually rewarded. Don’t overthink it.

I also think that a ‘One idea a day’ is plenty for 99 percent of the investing public. Over the course of the first year we have covered nearly 150 stocks and industries. That’s just an afternoon with Cramer I know, but we are not Cramer.

Today we take a second look and update of one of my past faves Smith and Wesson (SWHC) . I exited my position a few months back, but in doing an update you can see why the stock is humming along at all-time highs. It is back on my radar screen. I can’t say I will ever understand the cosmetic and fragrance angle, but gun accessories are white hot. Here is their Google Finance Page once again .

Here is our original show:

Brian has a detailed look at the price action:

We have lot’s of new surprises in the year ahead. Thanks for the support of the show.

I love this episode and love when we nail the stock too:

I was looking back through the archives of shows tonight and I am feeling pretty good. The shows are great and the stocks are doing really well save Smith and Wesson and Electronic Arts. Ouch on both. The big winners are Toyota, Altria, Garmin, Rimm, Crocs and Apple. Since we started the show in mid October, the markets have been real strong – that always helps. That said, I firmly believe that timing the market is not worth the effort and you are always best off buying the strongest stocks and being diversified.

Please remember that money management rules the day and that’s where the links, blogroll and Wallstrip blog come into play.

Portfolio’s need to be pruned.

In that vein, today we revisit Harley-Davidson. It is one of the great American Brands of all time. I have no position in the stock. Here are all my posts on Harley. Not bad :) .

For a fresh look, I asked my friend and Wallstrip regular Brian Shannon for the lowdown on Harley’s technicals. Here it is:

For why Harley does well despite technicals being good or bad – here is The Rad Report’s take:

Some exciting news is that the Wallstrip team is heading to PHOENIX for a week of shows. It’s actually cheaper than me going to New York :). It’s also the only way to get Lindsay in a bikini. NOT.

Thanks for staying involved and spreading the word.

Disclosure – Long Apple, Smith and Wesson, Bidu, Copart, Dolby, Nike, Adobe (Was long CROX and RIMM at the time of the shows and have since sold and disclosed on the blog).

My gun stock is an old fave -Smith and Wesson. It is in a giant pullback on an earning’s miss. I have no idea if they missed (the reports say they did), but the stock got smoked. Numbers look great to me and it is still in a giant uptrend. I will use $8 as a stop for now. I had a big win in this stock earlier in the year, luckily selling near the highs.

Here is one of my fave Wallstrip shows with Lindsay firing guns.

My tobacco buy is MFW – just hitting all-time highs and making a living selling licorice as candy and cigarette filters. Don’t even ask me – go check it out yourself. Here is the lifetime chart. Look’s like they are really benefiting from the Chinese smoking habit and their love of licorice. Go figure :) .

Disclosure – Buying SWHC and MFW tomorrow

Bought it, rode it, sold it.

In hindsight, no defining reason to sell it. The trend is still up, but a double is a double.

I would look to reenter Smith and Wesson above it’s all-time high.

Disclosure – Do not own the stock or a gun. Like to own both :) .