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. Like baseball's greatest place hitter, "Wee Willie" Keeler, contrarians "hit 'em where they ain't."

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, but being a top-rated CAPS player means they're right far more often than not, and when they mark a stock to outperform, perhaps we ought to take notice.

Here are some recent picks from five Foolish CAPS skeptics:

Company

CAPS Rating (out of 5) 

Skeptic

Player Rating

Enersis (NYSE:ENI)

*****

TheGreatSatan

99.99

Morgan Stanley (NYSE:MS)

**

madnessmmmrs

99.95

Navios Maritime (NYSE:NM)

*****

mavericktrading

99.54

Toyota (NYSE:TM)

****

HonestK

96.39

BP (NYSE:BP)

****

Abitarecatania

90.13

The stocks above are not automatic buys. Just as a list of the players' worst stocks would not be a list of stocks to short, this list of favorites requires a little more thinking and drilling down into the financial statements than that. But it's a place to start.

Morgan Stanley Cup
Last week, the global financial institution of Morgan Stanley took a check into the boards that would have made any NHL player cringe. It was forced to write down $9.4 billion in assets -- bringing its total in subprime mortgage charges to almost $11 billion -- and had to sell a chunk of itself to a Chinese investment fund to keep the money flowing.

It wasn't alone in needing foreign investments to bolster domestic finances. Both Citigroup (NYSE:C) and UBS (NYSE:UBS) have had to court foreign money to infuse their operations with much-needed cash.

But that hasn't stopped CAPS All-Stars from backing Morgan Stanley. Top-rated player martynanasi, with a 99.18 player rating, believes that barring an economic collapse that plunges the country into a recession, the investment house should prosper:

They seem to have weather the storm fairly well. A little unsure but from the earning report today they are having reduced writedowns on sub-prime issues. They are trading at very ... extremely cheap levels at 1x bookvalue. Earnings going forward could be stagnant if we hit a recession and stagflation. Global wealth business is strong and should cushion any short fall in CDO markets. I think ... barring an unexpected economic mishap this stock should provide some [decent] returns going forward. They also have been very upfront about existing liabilities on sub-prime front which gives me more faith in them then [let's] say GS where they aren't saying a peep.

pinti is another CAPS All-Star who thinks the subprime mortgage mess has knocked these financial companies down further than is warranted, though there could be some additional surprises:

Believe the market has over reacted to the sub prime problems and left solid firms at discounted prices such as Morgan Stanley, Bank of America, Wachovia and IXG Ishares Global Banking ETF which gives you instant diversification for those of you who want general exposure to the banking sector all classed as long term 'Buys'.

Be cautious of 4th quarter sub prime write offs, these could hurt some of the larger banks and leave short term prospects unattractive, however for the longer term investor this could further add value ...  

We can look at where people's love/hate relationship with stock-price movements have knocked their prices far away from what the underlying businesses are really worth. And the farther away they're knocked, the better your chances to profit -- in the real world, with real money -- when things return to normal.

Yet it was just such writedowns that had bears like top-rated hey4ndr3w warning that the fourth quarter could produce some significant downside:

Annual audit during Q4 will show that third quarter write-downs associated with mortgage-backed derivatives were not sufficient. Earnings for the period may have to be restated, and lower guidance for '08 may be issued.

Seeing past the obvious
The debate between the bulls and bears is indeed intense, yet contrarians try to see past the headlines. They know that just beyond 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.

For every post you make to CAPS or any Foolish discussion board in the month of December, The Motley Fool will donate $0.02 to charity. So give us your 2 cents and we'll pay it forward!

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