thebage

Was Peter Lynch Wrong? Crocs and Other Trendy Companies

Of course Lynch would also consider the advantage or the moat. A trend is not enough of a reason to own a company. The problem with Crox is that building a pair of rubber shoes for .50 cents and selling them for $30 is all trend and not a defendable moat. It is too easy and too profitable for someone else to build the same pair or shoes for .50 cents and sell them for $9.99 at Target!

Google, Apple and RIMM are more than trend because the R&D and costs required to get in that space are enormous. Not to mention the talented execs.