A Contrarian Christmas List

"We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." -- Warren Buffett

Out of the quadrillions of quotations quarried from that most loquacious of quotationists, this one holds a special place in the hearts of Foolish investors. Are you looking to "buy low" so as to later "sell high?" If so, your best chance of getting that initial, low entry price comes when panicked sellers are unloading their shares at whatever price is on offer.

In today's column, we search the ranks of Wall Street's motivated sellers, and note which stocks they're most frantic to unload. Therein may lie the makings of a contrarian's Christmas list (to themselves, at least). But don't just take my word for it. Before you decide to go in through Wall Street's out door, check your thinking against the collective intelligence of Motley Fool CAPS investors.

Today's contenders include:

The problem with pessimism
The problem with going against the grain on Wall Street is that when professional traders get pessimistic, their grim outlook can become a self-fulfilling prophecy -- at least in the short term. The more desperate institutions become to abandon a stock, the lower the price they'll accept to get rid of it. And as their "ask" prices drop, the "bid" prices of buyers will fall in tandem, creating the very price decline they feared in the first place.

Until the selling stops.

Swimming upstream
When it will stop is anybody's guess. But until it does, savvy investors have a chance to "get greedy," and snap up some bargains from these fearful sellers (if bargains they truly be). Which of the above seven stocks fits the bill? In today's list, we see a couple instances in which Main Street agrees with Wall Street, two more where they think the professionals are overreacting -- but three cases where CAPS players say the professionals are just flat-out wrong.

It's rare to see CAPS bestowing four and five stars on Wall Street's pariahs. Then again, it's not often a company as esteemed as Value Line finds itself on a list like this.

Reviewing the company's CAPS page, we see that Value Line receives unanimous "outperform" ratings from the 11 investors who have evaluated it. But only one Fool has written up a "pitch" on the company. Says sandvig, rated in the top 1% of CAPS players:

"They publish a very high quality product. They have a very loyal customer base. Their P/E ratio is modest, their return on equity is outstanding (42%), and they have no debt. I don't see much downside. I consider this a classic, 'buy and hold.'"

But what do you think? If sandvig's right, can you tell us why Value Line will outperform? Or, conversely, why Wall Street is making the right call here? Whichever way you lean on the issue, at CAPS, you've got a chance to make yourself heard, and help your fellow investors in the process.

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Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 67 out of nearly 19,000 raters.