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David Einhorn has earned fame and wealth in part by acting as an investment sleuth. He seeks out companies with something to hide and begins an exhaustive forensic accounting analysis of a given company's books. Einhorn famously nailed several shorts including Green Mountain Coffee Roasters (NASDAQ:GMCR), as well as Allied Capital, Lehman Brothers, St. Joe's (NYSE:JOE), etc...

Einhorn is a seasoned veteran, an avid poker player, and one of the best value investors around. Many investors are unaware that they can invest in his offshore reinsurance company and essentially allocate money to his hedge fund strategies via a long position in Greenlight Reinsurance (NASDAQ:GLRE) without the fees. I like the fact that Einhorn offers something for the little guy without the 2&20 price-tag, but make no mistake Greenlight is not provincial or lacking in value investment prowess.

For our readers, Chipotle Mexican Grill (NYSE:CMG) has been a tough stock to short over the years. We have felt that high valuations here were unwarranted for the past three years, but nothing could stop CMG's parabolic rise until now. Indeed, Einhorn's dire predictions of doom have crippled the stock prices of several large corporations, and his "biggest" short Allied Capital actually went bust.

Chipotle Mexican Grill has been one of the best performing stocks in the world over the past few years. To be sure, CMG offers some high-quality Tex Mex and shareholders have been rewarded with a three bagger in a swift period of time. While we will have to dig into CMG's financials to see what is really going on, insider selling here is a clear red flag for long-term shareholders.

While Chipotle always looked overvalued to the skeptics (including yours truly at times), insiders have never sold shares in droves the way they are today. The momentum traders have also likely left the building as the stock dropped from $442 to $300 this summer.

We think a 38X multiple is still too high for this company even though top line growth continues at a blistering pace. For shorter-term traders, consider using the $300 mark as your barometer -- if the stock breaks below $300 we think a small tester short position is warranted and should be covered with a tight stop loss order at $300 to mitigate risk. Even though round numbers are strictly psychological, investors tend to get emotional around these price points and will often set stop loss orders just below a round number like $100, $200, or $300, which gives the short seller a slight advantage when entering or exiting trades.

Chart forChipotle Mexican Grill, Inc.

Source: Chipotle: Is The Great Burrito Bubble Finally About To Pop?