Now I will tell you the three other causes of tops… three things that mean it is time for you to sell while the selling is still good… first, and this is the bane of my existence, and no doubt yours… accounting irregularities… I say this in Jim Cramer’s Real Money: Sane Investing In An Insane World and know I am saying it again… accounting irregularities equal sell… no matter what… no exceptions… I don’t care what you think of a company… I do not care how well it has worked for you in the past… when you see a company messing around with its financial… the holy grail of what we do… you know it is in trouble… it is not just that lying about the numbers is illegal… it is that the only companies that screw with their numbers are the ones that can’t make them… not every company with an accounting scandal is an Enron waiting to happen… although, I will note that if you had sold Enron when the first news of their accounting fraud broke, you could have made it out of the stock with some of your money intact… rather than with nothing… first accounting irregularities broke at around $40... the last ones broke at zero… when you see accounting irregularities, I am going to say it again, you have to sell… sometimes you will be wrong but far more often you will be right… I know that a lot of people feel like that rule kept me out of making x or y… no that is the wrong way to look at it… that rule will prevent you from having a black hole in your portfolio… and no, an options backdating problem is not an accounting problem… it is a compensation problem… let’s understand an accounting problem means that the numbers are phony… but companies that backdate options for their officers don’t do it because business is bad, like companies that lie about their financials… they do it because business is good and getting better… those executives would rather take stock than cash because of the future… if anything an options backdating problem can be a reason to buy a stock, not sell… and we have proved time and again on this show that that is exactly what you should have done.

The next way that you can see a top coming a mile away… over expansion… on Mad Money we like growth… we recognize that growth is like crack to Wall Street… people can’t get enough of it… the Street tends to love acquisitions and rapid expansion… and those are the easiest ways to make growth happen… sometimes an acquisition is great but sometimes it is a problem… a sign of over expansion, a sign of growing too fast, it can’t be managed… growth that can’t be contained and can’t be controlled… that is just out of control… a sign that you should get out… the same with franitic store openings or office expansions, it is hard to execute these things properly and if a company can’t pull it off… your stock will end up peaking rather than going higher… I always, always watch for a company that is growing so fast that it takes your breath away… the code for over expansion on the street, we call it integration problems… when you hear management say those two not so magic words, integration problems, top coming… when you read them, when you hear them… it is time for you to run, don’t walk, for this… sell, sell, sell.

It is easy to spot over expansion in retail too… we like retailers that grow their store cam… but when you see them put up a massive number of stores relative to their base all at once… shoot first, ask questions later… that is a retailer that is asking for trouble… it is a sign of weakness not strength… masking something… just watch those same store sale numbers to see how much the existing business gets hurt by over expansion… you will know that the top is coming.. I happen to really like to look same store sales numbers of older sales to see if that is a problem… the other trouble that retailers have with over expansion is saturation… when you see a retailer already has stores in all 50 states… I am calling a top right there… running out of room to grow… no growth means that the stock is about to take a long maybe permanent slide down… remember Wal-Mart.

The last sign of an impending top is government action… the government at the Federal or state level can do more to hurt a company than any competitor… how do you spot this kind of top… check out the front pages of The New York Times, the front pages The Wall Street Journal… the USA Today, I have seen a bunch there… and Washington Post… I start my day with them electronically inserting my stocks names in their search engines to see what articles come up… please don’t just stick to the business section, because it never pays enough attention to Washington.

The bottom line…