Nassim Nicholas Taleb's best-selling book, The Black Swan, is probably loaded with more good advice than any other single source available. Read the book a few times, and you'll have a better understanding of risk and uncertainty than the vast majority of fancy-pants financial experts.

One common theme from the book is focusing on the ability to separate the empirical from the emotional. Sifting out the noise from the numbers -- the significant developments from the total ballyhoo. It's one of the most important lessons to remember.

Especially in a market like this, where fear, uncertainty, and raw emotion are in the driver's seat. More investment opportunities are being created from market temper tantrums than we've seen since the Great Depression. The trick to finding great investments -- and the kind of behavior that's made investors like Warren Buffett madly successful -- lies in shoving aside emotional barricades and focusing on the empirical facts. It's anything but easy, but the results are rarely disappointing.

To find a few stocks whose empirical details far outweigh their emotional fears, I called on the wisdom of our 135,000-member-strong CAPS community. In my opinion, these three stocks have too much fear and too little fact baked into their current prices:


Recent Share Price

Forward P/E Ratio

TTM Return on Equity

CAPS Rating  
(out of 5)

Microsoft (NASDAQ:MSFT)





UnitedHealth (NYSE:UNH)










Source: Motley Fool CAPS, Google Finance, and Yahoo! Finance, as of July 28.
TTM = trailing-12-month. P/E = price-to-earnings.

Here's a closer look at each one.

Was this really necessary?
Microsoft reported earnings last week that drew a fair amount of tears. Revenue missed expectations by a cool billion. Shares tanked nearly 10%. Naturally, the Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) fan clubs squealed with delight.

But, come on, these things happen when you shove a company under the spotlight of 90-day time frames. If the decades-long strength Microsoft has proven can be undermined by 90 days worth of results, reconsidering your investment attitudes may be in order. As CAPS member SeattleRoses writes:

It makes no sense that investors dumped the stocks when [Microsoft] missed earning estimate by just 2 cents per share. The company pretty much controls the PC market. It is true that Mac is gaining on market share, but only on the high-end notebook computer area. [Microsoft] will be offering MS Office and other software on-line via the Internet. It is positioning itself to take control in this area as well.

These companies are not about to die
UnitedHealth, along with competitors like WellPoint (NYSE:WLP) and Aetna (NYSE:AET), trade at embarrassingly low valuations, thanks to the fears the government will start wrecking shop with nationalized health care.

But the worst-case-scenario threats seem to be fading as politicians face reality and legislation waffles. And while no one's trivializing this debate, I think those threats will continue to wane. Never say never, but I'm skeptical Washington truly has what it takes to clothesline an industry that employs so many people and has so much sway over political matters. Sad, but probably true. The health insurance industry isn't going anywhere.

Give these guys a chance
We'll keep this rundown of 3M short and sweet: Ignored is that it's extremely diverse, with its hands in everything from health care to touchscreen monitors. Overlooked is that it's rode out this economy with its head held high and profits flowing. Wonderful is that it's trading at around 15 times earnings and has a dividend yield approaching 3%. As CAPS member flymikefly04 writes:

Still profitable in this down market. They have made wise decisions to set themselves up for future success. The dividend is strong and does not appear in any risk of getting cut.

You take it from here
Have your own take on any of these companies? More than 135,000 investors use CAPS to share ideas and swap opinions. Click here to check it out and speak your mind. It's 100% free to participate.

For related Foolishness:                                                                        

Fool contributor Morgan Housel doesn't owns shares in any of the companies mentioned in this article. Google is a Motley Fool Rule Breakers selection. Apple is a Motley Fool Stock Advisor pick. 3M, Microsoft, and WellPoint are Motley Fool Inside Value selections. The Fool owns shares of UnitedHealth Group, which is an Inside Value recommendation. The Fool has a disclosure policy.