When it comes to investing in the stock market, it pays to be skeptical. Not only should you not believe everything the analysts tell you, but you often have to discount what the companies are telling you, too.

Going against the crowd can pay off handsomely. Some of the market's legendary investors have been contrarians: Benjamin Graham, Warren Buffett, John Neff, and Marty Whitman, just to name a few. Like baseball's greatest place hitter, "Wee Willie" Keeler, contrarians "hit 'em where they ain't."

When the crowd abhors a stock, a contrarian wants to look more closely at it. Similarly, when the masses crowd into shares of a company, the skeptical thinker believes it's time to move on.

A new breed of contrarian
Today, I'm looking at a new breed of contrarian, the Motley Fool CAPS "skeptic." Skeptics don't think like most investors. They're willing to see the downside potential of a stock, as well as the upside. CAPS skeptics have rated more stocks as underperforming the market than outperforming it. They're contrarian in that they find more downside potential than upside. However, I've also noted that quite a few "official Fools" qualify as skeptics, so I thought I'd do things a bit differently this week and see what they're recommending.

Here are some recent picks from five Foolish CAPS skeptics:


CAPS Rating


Player Rating

First Solar (NASDAQ:FSLR)




Sotheby's (NYSE:BID)




Quality Systems (NASDAQ:QSII)




UltraShort Real Estate ProShares (AMEX:SRS)




Ford (NYSE:F)




The stocks above are not automatic buys. Just because these guys work for The Motley Fool doesn't mean they're guaranteed to be right, just as a list of their worst stocks would not be a list of stocks to short. This list of favorites still requires a little more thinking and drilling down into the financial statements before taking action, but it's a place to start.

Art for art's sake
A single seemingly botched auction of Van Goghs, Picassos, Renoirs, and Gauguins was enough to send investors screaming for the exits, thinking the credit crunch sky was falling on the art houses. As the only publicly traded auction house, Sotheby's bore the brunt of this appearance of one of the four horsemen of the Apocalypse. It seems a bit premature to say the art world is collapsing, particularly because in August there was a similar decline in Sotheby's share price over fears the market was softening.

TMFBent, who's highlighted for picking First Solar this week, notes simply that the market's reaction is an "incredible overreaction to a single, botched auction."

Another CAPS All-Star, sandvig, in a bit of Gatsby-like reflection, notes that the rich are different.

Ars longa, vita brevis - Art is long, but life is short.

There are not many businesses that have a moat like Sotheby's.

If there is an economic downturn, it may affect their business, but I am not sure what drives one to buy or sell a Van Gogh. "Honey, I got a raise. Let's go bid on that $49 million painting that would look nice in the living room."

Sotheby's customers are filthy stinking rich. They can ride out the tough times and so can Sotheby's. Over the long haul, they will outperform the market.

Looking past the obvious
Contrarians try to see past the headlines. They know that just beyond the wrack and ruin of the storm clouds lies a shimmering morning. Conversely, the sun can't shine forever, though the crowds may think the green grass and blue skies go on and on. In the meantime, drop by CAPS and tell us which stocks are your favorite contrarian picks.

Quality Systems is a recommendation of Motley Fool Stock Advisor. There's no need to be skeptical about the 30-day trial -- it's risk-free!

Fool contributor Rich Duprey owns shares in Ford but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.