Editor's note: This article has been corrected to reflect a more accurate short ratio.

If I may start by giving out the Headline of the Week award, I believe it should go to our friends at TheStreet.com (NASDAQ:TSCM), who penned this subtle beauty: "Martha Stewart to Judge Greedy Hustlers."

In case you're just getting out of the cave, Martha's got herself a show as the next Trump, starring in an Apprentice knockoff. This seems an odd move for a woman who made her fortune by refusing to take orders from moldy old New York moneybags like The Donald. But hey, Martha does know where to get a buck. I'm not sure shareholders in her firm, Martha Stewart Living Omnimedia (NYSE:MSO), are going to be so lucky.

The stock's been on an upward trajectory for weeks, hitting yet another 52-week high today. This despite the firm's continued failure to become profitable. Sales have been on the skids since 2002, and they were flat the two years before that. Earnings? Well, Martha, Inc. hasn't seen those since 2002 either.

The way people are snapping up the stock, you'd think that major profits were right around the corner. You'd be the only one thinking that, however. There's no one in the Martha-watching biz who thinks the firm will turn a profit in '05, and the sunniest prediction I can find for '06 is $0.20 per share. That puts the firm at a two-year forward price-to-earnings ratio of 179. That makes Google (NASDAQ:GOOG) look like a blue-light bargain.

Let's get really crazy: Since 1997, the high point for sales was $295 million. The best net margins ever achieved were 7.5%. So, if the firm miraculously equaled its best sales year and its best margin performance -- and remember, there's no way this is happening any time soon -- you'd be looking at a take-home of $22.1 million for shareholders, or $0.45 per share. In that case, you'd still be trading this thing at a P/E of 80.

Who would pay that kind of premium for a company that's seen revenues crawl upward at a 10% annualized rate over the past seven years?

The answer may be: mostly, people who have to. With somewhere around 50% of the float sold short -- the exact number is up in the air -- the continual run-ups have the look of a long, slow short squeeze. The stock may continue to go up for no reason.

One thing's for sure, those who know better are taking their money now. Insiders have been bailing out like crazy, dropping 10% of the company's outstanding shares in the last six months. Martha herself dumped several hundred thousand stubs back in December and has also transferred her majority stake to daughter Alexa. If third-grade math doesn't convince you where the smart money is with this one, then just follow Martha's lead out of the stock.

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Seth Jayson is continually amazed at the way investors confuse "lucky" with "smart." At the time of publication, he had no positions in any firm mentioned. View his stock holdings and Fool profile here. Fool rules are here.