Contrarian Shopping 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 investor's shopping list. 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, buyers' "bid" prices will fall in tandem, creating the very price decline they feared in the first place.

Until the selling stops.

In through the out door
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).

This week, CAPS players seem to think "they be not." Not one of the seven stocks on today's list enjoys an above-average rating. The closest we get is little Cerus, a biotech working in the fields of blood safety and immunotherapy. Here's what Fools have to say about Cerus:

The case for Cerus
First off, let me be clear: There's no bull case being made on CAPS. With just three "stars" to its name, the most you can say for Cerus is that it's not intensely disliked in CAPS-land. That said, it does have some fans. Notably:

• EriKarju brings us up to speed on the company, noting that its "Intercept blood safety system for blood platelets has been approved for sale in France and Germany and the same system is in late clinical stage in US. ... Cerus also has some interesting but very early work going on cancer vaccines - too early to place any value on that."
  
  
• fullwealth observes that Cerus is "growing sales in international markets."
  
  
• Cerus's highest-ranked pitcher, mansloth, "would strongly caution against picking this for yourself" yet believes that Cerus's "strategy with CRS-100 [a treatment for cancer that has metastasized to the liver] is likely to go all the way. Their blood safety system should provide modest revenues in the short term, but I'm banking that they will get a partner for CRS-100 in the next 2-4 years and eventually develop more Listeria-based therapies."

Time to chime in
Hmm: "Too early to value." "Strongly caution against picking" -- hardly glowing endorsements. I think you can see why Cerus is garnering only three stars at this stage.

Is it worth your investment? I could no more tell you that than explain what a "Listeria-based therapy" is. Fortunately, at Motley Fool CAPS, not everyone needs to know everything about every company in the universe. We're all in this together, trying to beat the Street as a community. To that end, if you know something about Cerus that could help your fellow investors decide for or against an investment in the company, we're all ears. Come on over to Motley Fool CAPS and lend us the benefit of your Foolishness.

Motley Fool CAPS: It's fun, it's free, and it just might make you famous.

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 No. 1,581 out of nearly 29,000 raters. The Fool has a disclosure policy.