"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, WSJ.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. On our Motley Fool CAPS investing community, these top stocks usually enjoy favorable ratings, 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 more than 125,000 stock gurus (and counting) in CAPS have to say about the list's latest contenders:

 

1 Year Ago

Recent Price

CAPS Rating (out of 5):

American Science & Engineering 

(NASDAQ:ASEI)

$50.37

$80.77

****

AeroVironment (NASDAQ:AVAV)

$23.30

$39.37

***

StemCells  (NASDAQ:STEM)

$1.12

$2.53

***

Geron (NASDAQ:GERN)

$4.53

$7.09

**

Companies are selected from the "New Highs & Lows" lists published on WSJ.com on the Saturday following close of trading last week. Year-ago and current pricing provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

Old friends
Once again and true to form, we find our list of Wall Street's highfliers headlined by a pair of familiar names: Motley Fool Rule Breakers recommendations American Science & Engineering and AeroVironment. But it's the new names on the list that interest us this week.

Why? Because in "Get Ready for the Fall," we're not looking for highfliers per se, but rather expensive stocks that investors think are too expensive -- and doomed to fall back to earth. In this regard, our choice this week is clear: Only Geron Corporation sports the twin attributes of a 52-week-high stock price combined with extreme pessimism from CAPS investors about its prospects. Let's find out why:

The bear case against Geron
Leading off our coterie of bears is pick1998, who noted that Geron is “over hyped for stem cell curing power and telemorase potential. High valuation, but early clinical development. High cash burn, which is dangerous in 2009 or so.”

Heedless of its cash burn, Geron embarked upon a giddy rise, leaping 36% Friday on a report that the FDA has cleared the company's GRNOPC1 "hESC-based therapeutic candidate" for use in a human clinical trial to treat patients with acute spinal cord injuries.

Good news? It sounds like great news -- except for a couple of things. First and foremost, we're talking about a Phase I clinical trial here, folks. No guarantee that it will work. Second -- and kindly don't blame the messenger here -- but CAPS All-Star jstegma expresses extreme skepticism as to the validity of Geron's new treatment. You can read it yourself here. More telling still, the pessimism seems more pronounced among the very best investors -- our CAPS All-Stars. 

Foolish takeaway
Whatever our opinion of Geron, I doubt there's a Fool in Fooldom who's rooting against patients suffering from spinal injuries -- but that doesn't mean you should buy the stock. Remember: We're not talking about an established biotech such as Amgen (NASDAQ:AMGN), Gilead Sciences (NASDAQ:GILD), or Genentech (NYSE:DNA) here, but a start-up R&D shop.

With negligible sales to its credit, Geron trades for an amazing 79 times its annual revenue. The stock is the furthest thing from profitable, and burning cash at the rate of more than $36 million per year -- a rate we can only expect to rise as GRNOPC1 trials commence. Whether the treatment ever proves successful -- not to mention successful enough to justify the investment -- remains very much in doubt.

But hey, feel free to disagree. If you believe GRNOPC1 is a game-changer for Geron, click on over to CAPS and tell us why.

Fool contributor Rich Smith owns shares of both American Science & Engineering and AeroVironment -- which are also both Motley Fool Rule Breakers selections. You can find Rich on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 1,224 out of more than 125,000 members. The Fool has a disclosure policy.