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 that institutions become desperate 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 that 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.

CAPS players appear to think "they be" for a few of our stocks in today's list, where AMEX-listed NovaGold garners four stars, and both Amcol and International Assets Holding (IAH) win five. Despite having two stocks with top billing today, it's no contest deciding which one to profile -- nearly 10 times more investors have submitted ratings on IAH than on Amcol, making it the favorite by far.

Reviewing the company's CAPS page, we see that 357 of the 369 investors who have rated the company think it's a winner, including 136 out of 141 All-Star raters. Here's what a few of these star players have to say about IAH.

• CAPS player pennysplants sees "long-term upside" here and likes IAH's "good management.
  
  
• And dhd1491 agrees, calling management "exceptionally bright" and observing that "GAAP accounting restrictions make IAAC's earnings appear smaller than they really are." So, what should you do? "Listen to their conference calls for explanation."
  
  
• Expressing a personal note, bassy31 offers his frustration: "It's absolutely killing me that this is my best CAPS pick at the moment -- I'm not allowed to own it in real life because of my spouse's job! Sheesh."

Help wanted
But should you rush in where bassy31 is forbidden to tread? On the one hand, our players are right to point out the earnings issue. With a trailing P/E in the triple digits and a forward P/E of "N/A," because no analysts have gone on record predicting the company's future "E," IAH looks priced to the heavens. On the other hand, there's got to be a reason that Tom Gardner and the crew at Motley Fool Hidden Gems named this stock a "Tiny Gem." (Take a free trial of the service to learn what that reason is.)

Help a Fool out, will ya? Come on over to Motley Fool CAPS, and tell us whether IAH's valuation gives you the willies, or whether Wall Street's wizards have misread this story.

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 285th out of more than 28,000 raters. The Motley Fool has a disclosure policy.