Products That Rocked The Stock Market

Ever since I was a little kid I paid attention to the stock market. My early memories are of breakfast before elementary school and the radio in the background giving the daily stock report. My mom and dad got interested in the market when my mom was left a small amount of money and wanted to learn all she could about protecting and growing her little nest egg. Over the years she did quite well, and although I did not study the market as she did, just by being around her I learned a lot. As Charlie Whittingham, a famous horse trainer used to say when people asked about his son, "I taught him everything he knows, but not everything I know". I love that quote. That's what my mom did for me, and for that matter, my son David.

David has been a stock broker for 11 years now. He got into the business partially because of his curiosity over what my mom and dad were always talking about. He studied finance in college, and after a brief stint in the restaurant business went to work for Morgan Stanley. Today, he works with a J.P. Morgan affiliate, finding ways to protect and grow portfolios in these challenging times.

I recently read an article that got me thinking. New products come on the market all the time. How do we as investors decide which ones are THE ones to buy? Which ones will have staying power and outperform the market? Here's how a few recent hot products have done.

1. Kindle. Kindle is the fastest selling e-reader on Amazon. It was originally released in November, 2007. Amazon stock fell 55 points as the economy worsened during one of the worst years in market history. Currently, shares have rebounded and now trade nearly 40% above where they were when Kindle made it's debut. This would have been a good stock to buy, if you could survive the bumpy road.

2. Krispy Kreme Doughnuts. KKD was founded in 1937, but only in the 1990's did it embrace a strategy of expanding outside the southeastern U.S. They went public in April, 2000. Initially shares spiked to $49.37 in August, 2003. The stock succumbed to gravity in 2004 and has traded mostly in the single digits since. One share now costs about $3.75. This would not have been a good long term buy.

3. Crocs. The shoes look ugly to many, but they're made of a special material that renders them odor-resistant and makes them especially comfortable. Some market investors hoped Crocs would become the next Nike, but the Crocs craze and the company faced competition from copycat brands. The company was found in 1999 and went public in 2006. Initially the stock rose 423% in the first 20 months after the company's initial offering, peaking at $74.75 in October, 2007. The stock fell to barely about $1 in March 2009 before beginning to rebound. Crocs shares have nearly doubled in value in 2010. Again, for long term investors, this was not a good buy. If you're great at timing the market, you would have cashed out big time.

4. IPod. This product by Apple has significantly impacted the tech and electronic market. Apple was first released in October, 2001. In it's first year, Apple shares fell 18% amid a tough enviornment. In October 2002, one share of Apple cost about $8. It's worth about 60 times that amount today. I think that qualifies as good investment.

Often new ideas, new companies come along that catch America's fancy. As an investor we have to decide whether these are fads or whether they will stick around. So to be a good investor you not only have to be a financial analyst, but you need to spot trends and decide what will last and what will be gone tomorrow. Tough decisions, especially in hard times, but when you pick a stock that does well, it sure is exciting.