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 intraday price of any time in the past 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).

Over on Motley Fool CAPS, thousands of investors just like you are watching these same companies and voting on whether they'll keep rising or stumble and fall. Usually, the ratings 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?

You could heed them. You could ignore them. You could take the stock tickers and construct anagrams from 'em. For my money, though, the best course of action is to use the "52-week highs" list as just a starting point for further research. After all, stocks can go up for many reasons, and it's up to you to decide how worthy those reasons are. But thanks to Motley Fool CAPS, now you don't have to make the decision alone.

With that said, let's meet today's list of contenders, drawn from the latest "52-week highs" list at MSN Money. What does our panel of more than 20,000 stock gurus (and counting) have to say about them?

Where's the love?
One thing these stocks have in common: They're all REITs. Apparently, Vornado's (NYSE:VNO) recent topping of Blackstone's bid to buy out Equity Office Properties (NYSE:EOP) has many investors thinking this sector is ripe for a surge. As a result, these stocks have another thing in common: They're all hitting their 52-week highs. But these stocks don't enjoy anywhere near universal acclaim among the 20,000+ investors on CAPS. To the contrary, only one stock gets an above average rating (Federal REIT); meanwhile, AvalonBay actually receives our lowest rating: one star. Why? Opinions are mixed:

• CAPS all star pbgibbons argues that AvalonBay "will benefit from slow down or reversal of residential real estate market, and will do well independent of that possibility [sic]."
• Another CAPS superstar, se7ensparks, agrees, predicting that: "There will likely be more demand for rentals, rents will rise, and these REITs will benefit."
• In contrast, EScroogeJr, an all-star in the top 2% of CAPS players, just plain dislikes AvalonBay's numbers, observing that: "Any individual buying a rental property can easily achieve much higher ROA and ROE than these 'real estate specialists.'"

Time to chime in
CAPS opinions vary on AvalonBay, with 38% of investors rating the stock an underperformer. Is the large minority right in this case, or should we yield to the democratic majority and give AvalonBay a second (or third?) star?

It's not a rhetorical question. At Motley Fool CAPS, your vote really does count. We're building a community-based, collective intelligence machine, with the hope that the more people that weigh in on a company, the better our understanding of its value will become. You can do your part by logging on now (yes, it's entirely free of charge), and telling us what you think.

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 30 out of more than 20,000 raters. The Fool has a disclosure policy.