"The bigger they are, the harder they fall." It's the worst nightmare of every investor in today's market -- buying a hot stock just before it takes a nosedive.

Every day, Nasdaq.com publishes a list of stocks whose shares have just hit new 52-week highs. And every day, investors read the list and tremble -- some with greed, others with terror. These top stocks usually enjoy favorable ratings on our Motley Fool CAPS investing community, since everyone loves a winner. But what should you do when some of CAPS' smartest investors pan one of these hot stocks?

For starters, consider using the 52-week-high list as a starting point for further research. Stocks can rise for many reasons, but a little help from Motley Fool CAPS can make it easier to figure out how worthy those reasons are. Let's see what the 82,000 stock gurus in CAPS have to say about the list's latest contenders:

One Year Ago Today

Currently Fetching

CAPS Rating

Nextest Systems (Nasdaq: NEXT)




Neutral Tandem (Nasdaq: TNDM)



XenoPort (Nasdaq: XNPT)




Vanguard Short-Term Bond ETF  (AMEX: BSV)



China Holdings Acquisition  (AMEX: HOL)


Not rated

*Trading for less than one year.
Five stars = highest possible CAPS rating; one star = lowest. Companies are selected from the "NASDAQ 52 Week High" list published on Nasdaq.com on the Saturday following close of trading last week. Year-ago and current pricing (close 1/18/08) provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

A bear-y bad week
On the NYSE, 308 listings celebrated the close of trading last week by hitting 52-week lows. And if you think that's bad, get this: Not a single NYSE stock reached a new 52-week high. Not one.

Build-a-bear, anyone?
In hopes of finding something (anything) to write about this week, I therefore turned to the Nasdaq and AMEX -- only to find both barrels nearly empty. Scraping the barrel floors, I came up with the five "winners" you see above -- what an eclectic bunch they are! So what do we have here?

  • One formerly independent company about to disappear into Teradyne's (NYSE: TER) maw (Nextest).
  • A recently IPO and telecom switcher sporting a triple-digit price-to-earnings ratio, but rapidly growing free cash flow (Neutral Tandem).
  • A profitable biotech that, like Neutral Tandem, generates free cash flow in excess of its reported GAAP profits (XenoPort).
  • A bond index masquerading as a stock, which has turned in solid performance these past few months, even as the stock markets burst into flames. According to Morningstar (Nasdaq: MORN), the Vanguard Short-Term Bond exchange-traded fund was a top performer in its category in the third quarter of last year, and it's still on the rise.
  • And a shell company looking to buy itself a good Chinese company on the cheap (China Holdings).

I don't know about you, but when I look at this wild bunch, the only comment that comes to mind is, "Wow." It seems that when the markets go haywire, the weird shall inherit the earth.

With all of the pain going on in the market today, I'm loath to disparage these lucky few "stocks" that have somehow managed to avoid the pain. But hey, if you're in the mood to pick on 'em, feel free. By now, you know the drill: Log on to CAPS, enter the ticker in our search box, and tell us why their success will be short-lived. If you're in a more charitable mood, jot down a few words of encouragement to the investors who've found a way to dodge the downturn.

Me, I'm just hoping next week will bring a rebound, and a new batch of thicker-skinned candidates, whose bubbles present more of a challenge to pop.

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 No. 756 out of 82,000 players. The Fool has a disclosure policy.