Dueling Fools: Chipotle Bear Rebuttal

I certainly admire Jason's immediate acknowledgment of Chipotle's (NYSE: CMG  ) (NYSE: CMG-B  ) valuation and his love for the greatness of this company. The two of us no doubt share those thoughts.

But his argument of why Chipotle still remains a bullish stock doesn't hold too much weight in my book. If anything, I'm reminded of the age-old saying, "I've already made up my mind, don't confuse me with the facts."

Acknowledging that a company's shares are indeed overvalued yet feeling the need to jump aboard before the train takes off is the epitome of following the crowd to what is popular -- one of the most common investment mistakes that has given way to nearly every speculative bubble in history, from the dot-com blowup to the current real estate shake-out. Another common trait speculative bubbles share? They end in calamity every single time. No exceptions.

Chipotle is an excellently managed company, but as Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) Chairman Warren Buffett has succinctly stated, "We look for good companies at a good price." Investing in Chipotle at these levels only fulfills the first half of this timeless investment advice. For those who did get in at those lower levels back in the day, more power to 'em. That's where the Buffett-esque "buy-and-hold-forever" mantra takes form -- when good companies can be purchased at a price that gives a decent probability of success when many different outcomes are considered.

Purchasing companies beloved in the past, like Yahoo! (Nasdaq: YHOO  ) , Dell (Nasdaq: DELL  ) , and Microsoft (Nasdaq: MSFT  ) , would have you in the red these days if you'd bought them at their once-lofty valuations.

While I sincerely doubt Chipotle will suffer a complete crash and burn, you'd be hard-pressed to squeeze much more juice out of the shares at these prices. Patience, people. The big gains are awarded to those who see opportunity where others see fear.

Don't forget to read the rest of the Duel and vote for a winner.