6 Unbelievably Overvalued Stocks I'm Shorting Now

One of the most overvalued names I have ever followed to my way of thinking is Salesforce.com -- during "cloud computing" is all the rave on Wall Street, the computing craze has but to take off on Main Street and CRM shares are trading in a bubble at present prices. If the 400 plus PE ratio is not enough to convince you, the chart pattern shows that the stock is evidently rolling over here and could as a matter of fact begin a bear market decline which in the end tests and possibly fails the $100 a share mark in the medium term. If the overall market continues to crash, it is nearly a certainty that shorting CRM will outperform shorting an index fund given the stock's lack of revenues and meteoric rise in share price.

(AMZN) -- Amazon is another "cult of equity" name that trades over 100X revenues. The stock has long been prone to bubble runs and bubble bursts over the past fifteen years, and right now looks to be a good time to go short of the name given the fact that revenues are in fact falling and that the company's guidance was quite weak for the rest of the year. Top line growth does not always translate to bottom line growth or stock price gains for internet stocks -- Amazon is overvalued in a big way when compared to Apple, and I view Apple as risky here as then. That is, during Apple could fall some 30% if we embark on a 2008-like bear market for stocks, Amazon could fall for the moment 50% and nevertheless be fairly valued.

Lot like GMCR

(PEET) -- Peet's Coffee is a lot like GMCR but it lacks the market growth and appeal of Green Mountain. During Peet's accounting is not in question, their growth rate and business model does not seem strong enough for a 45 PE ratio -- game changing innovation stocks deserve 1999 multiples only from time to time, nevertheless coffee retailers should almost normally not deserve high multiples to revenues because their growth rates are subject to sudden and rapid change for the worse if a new competitor comes into play. I would not short PEET's at a 25X revenues multiple yet at a price of $60 a share, this short play looks like a sure fire winner.