Get Ready for the Fall

"The bigger they are, the harder they fall." This old saying sums up the worst nightmare of every homeowner, every gold buyer, and every investor in today's market: Dare ye buy at the top?

Every day, MSN Money publishes a list of the market's top stocks -- the companies whose shares have just hit their highest price of any time in the last 52 weeks. Every day, investors read this list and tremble -- some with greed (big Mo', baby!), and others in pure, unmitigated, acrophobic terror (whatever you do, don't look down).

Meanwhile, every day on Motley Fool CAPS, thousands of investors just like you look at these same companies and vote their gut on whether they'll keep rising, or tumble and fall. As a general rule, the ratings tend to wax optimistic as stocks hit new highs -- because everyone loves a winner. But what do you make of it when some of the smartest investors out there are panning a hot stock?

Then, dear Fool, it's time to get nervous.

With that said, let's meet today's list of contenders, drawn from the "new 52-week highs" list at MSN Money. What does our panel of 14,000 stock gurus (and counting) have to say about them?

Where's the love?
Unsurprisingly, Fools aren't exactly hating on today's hot stocks. To the contrary, better than half the stocks on the above list receive average ratings (three stars) or better. It may surprise, you, though, to see Baidu branded with the dreaded one-star rating. After all, the stock's up 40% over the last three months alone. How bad can it be?

Skepticism and optimism
Our "unofficial" experts explain:

• LukeSkiwalker , ranking in the 92nd percentile of our lay stock analysts, sounds the valuation alarm, writing: "Warning, warning, we're sitting on a triple digit P/E.... the analyst projection on growth of 50% just isn't good enough to hold at this level. When the music stops don't be left holding the bags. The plummet back to earth is just around the corner."

• And se7ensparks, who sits in the rarefied elite of the top 2% of CAPS players, opines thusly: "If you're going to compete with Google (NASDAQ:GOOG) and Yahoo (NASDAQ:YHOO), you better have a superior product. Baidu does not, and it owes much of its success to the Chinese government's censorship and the government causing problems for the competition. Ultimately, however, capitalism will prevail over corruption and BIDU will succumb to competition."

• But my favorite anti-Baidu mini-rant has to come from our own TMFDoraemon, who encourages us to pick the metric of our choice before pointing out: "You can pick price to earnings, price to free cash flow, or even price to sales and you can't find a way to make the valuation on this business make any sense."

I'd also like to highlight one comment from a CAPS user who, although not an all-star (or, should I say, "not yet an all-star") seems to have a little something extra to contribute. jordanbh writes "I'm a linguist, and I've used both engines. Google outperforms Baidu, even in Mandarin Language searches, zhen qi guai!"

Are they right? Are they wrong? Tell us what you think at Motley Fool CAPS, where Wall Street meets Main Street, and the best arguments -- not the biggest investment banking fees -- carry the day.

Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 190 out of more than 14,000. Baidu is a Motley Fool Rule Breakers pick. The Fool's disclosure policy is walkin' on sunshine.