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Fear sells. These days it seems fear based sales generation rules mass media and niche marketing. In newsletter marketing, investment advisory services, mainstream media news, politics, and in the investment world in general, creating a fear to sell into has become all the rage.

Fear tactics are constantly used by salesmen and advertisers to motivate and manipulate people into making decisions. When we make value investments, it is the fear of market participants that creates bargain buying opportunities -- we want to buy stocks that are truly hated, unloved, and feared to make the big bucks. We have to buy LDK Solar (NYSE:LDK) when it is down 50% in a month and looks like another CCME, and we have to look at companies like Hastings Entertainment (NASDAQ:HAST) that trade for 38% of tangible book value and 3.5X free cash flow because they are not only out of favor, but also desperately feared as long term investment ideas.

Contrarian value investing is not about buying bad businesses. Going against the grain to find out of favor stocks is about recognizing the hype and propaganda out there and discovering what is objectively driving trends in the marketplace. In other words, are the fears warranted? Whether or not the fears are warranted is the biggest question Ben Graham "Cigar Butt" type value investors have to answer when buying shares of stocks trading at 5X earnings, or 40% of tangible book value. At those prices, the end of the line is already priced into the stock and any deviation from the worst case scenario will lead to a surge in share price.

Here are 11 stocks that are delivering an incredible cash flow yield that investors can buy and hold:

FCX -- Freeport McMoran is a feared stock. For whatever reason, people view the commodity sector as being in a speculative bubble and think that FCX shares are overvalued even though the company trades for just 8X forward earnings and has exhibited incredible growth. Copper price volatility is an issue for the business, but the fact remains that FCX has more than enough copper, gold, and silver in the ground from a margin of safety perspective to make the shares a good investment at current prices.

FCX is undervalued on cash flows and undervalued on a net asset value basis which gives us a wide margin of safety as value investors. Shares of FCX are cheap, but since we are steadfastly conservative investors, we could look to sell the January 2012 $50 puts instead of buying shares directly. Selling these puts is like putting in a limit order for FCX at $44.50 per share, and it's a limit order that pays dividends while we wait for cheaper prices. While it's true that we will miss out on some upside most likely, we are comfortable earning a reasonable rate of return on our investment while we wait for cheaper prices.

VALE -- Vale is another feared mining stock. The crash in 2008 has clearly created many bitter shareholders who are happy to simply get their money back and get out of the stock altogether. Fear exists in that investors are worried the company will become nationalized, that China's demand for iron ore will slow, or that the business will crumble when the "bubble" pops for commodities and gold and silver. It seems interesting to me that no one really fears holding paper currencies which are declining in value relative to hard assets due to large deficits and derivative contracts that have been absorbed by sovereign governments around the world after the banking crisis.

My view is that VALE is too feared as an investment idea and that investors should short put options or sell covered calls in the name as the forward P/E of just 5X is simply too cheap to ignore right now and the real fear should be in currencies and in internet bubble 2.0 -- not in the metals.

SIVR -- Silver has skyrocketed in recent years mainly because people are realizing that paper currencies have value only to the extent that investors and citizens arbitrarily place an exchange rate on these mediums of trade. Hundreds of nations have seen their currencies implode in years past and silver has always been a good hedge against a collapse of paper currency in the past. Recently, people have been writing hundreds of missives about silver being in a bubble.

The fear that surrounds the silver market is likely not warranted and the longer term uptrend might likely stay in place longer than many investors believe even after QE ends. SIVR call options seem like a good way to play the metal as the risk is limited and the upside remains. Yes, investors will have to pay a premium to own the calls, so look to buy a deep in the money strike price call option on SIVR instead of buying out of, or at the money calls to hedge your currency risk.

HAST -- Hastings Entertainment is my favorite stock right now. I know that seems nuts given the fear that surrounds brick and mortar retailers and packaged media in general, but the financial statements provide investors with a strong margin of safety. Additionally, 33% or more of Americans do not have high speed internet access, so the market for print books, Blu Ray DVD rentals, and other store bought entertainment items may take much longer to die out than many investors believe. HAST shares are trading at just 38% of tangible book value and for 4X free cash flows. The business has a strong core brand in their niche small to medium size markets and with competition falling by the wayside, this diversified retailer stands to gain market share.

I think Hastings has taken great steps to insulate their business from technological obsolescence in building drive-through coffee and pastry shops, selling clothing and musical instruments, offering a thrift model with "buy sell rent trade" and selling new and used video games and video game hardware. HAST sells Apple (NASDAQ:AAPL) products and other electronics as well, and the stores are usually quite busy. That said, industry fears are driving the stock price in the short term, so investors have to have a longer term horizon to make money investing in this company which has bought back a ton of stock and paid down a good portion of their debt in recent years.

KO -- Coca Cola is really not as complicated or feared as many stocks on this list, but the brand is so strong that owning the stock at 18X free cash flow makes sense to me. The stock is Warren Buffett's biggest holding, and the company has proven to be the leader of the soft drink space by leaps and bounds. While the name is not a deep value or completely hated and feared name in its industry, the stock is a good value over the long term. Investors looking to play a little defense here can either sell calls against their position or buy leap in the money calls and sell front month at the money calls for a calendar spread approach.

MCD -- McDonald's is a cheap enough name at under 15X forward earnings and the company really has an amazing brand that no other fast food chain can really keep up with as far as marketing is concerned. MCD stock is not dirt cheap, but consumers will likely choose MCD for years to come which gives the stock a wide moat that any blue chip investor will respect. The stock has had a decent run lately, but investors can likely make some money buying the January 2012 $70 calls and selling the July $82.50 calls for a conservative calendar spread position in the name.

COP -- Conoco falls into the "too cheap to ignore" pile of stock picks here at 8X forward earnings. Investors are scared the company will blow up again as it did in 2008 when Buffett famously called it one of his biggest investing mistakes. COP shares are pretty inexpensive and the stock has not shot up beyond expectations at all even after oil prices have rallied substantially and the overall stock market has been bid straight up in the past year. I like selling the January $72.50 put options here for a solid 1% per month type of return potential on your longer term limit order to buy the stock at $66 or so.

TOT -- Total is even cheaper than COP and I think the name has been totally ignored due to the fears surrounding the European debt crisis. At 8X earnings, however, this fear is unwarranted and investors can snap up shares far below my estimate of intrinsic value. TOT is a good business with solid cash flows and a strong moat which is why I view the name as a whole lot better than most other investment choices out there for a longer term holding. That said, if things change rapidly, investors have to do their homework to decide if the patient is terminally ill or just suffering from a short term symptom of Mr. Market's fear and greed psychological disorder.

RIO -- Rio Tinto seems too cheap to me here at 7X forward earnings. Like FCX and VALE, everyone seems to feel that commodities are the bubble and not the paper currency market. Personally, I feel that logic is backwards given the increase in the money supply and the unprecedented stimulus in the system. Buying hard assets as an investment is simply not a "speculation" as much as it is a conservative hedge against inflationary pressures.

HPQ -- I can't really think of a more feared stock or of a more hated company than HP right now. After the departure of Mark Hurd, this stock has been on an one way ticket to misery. Investors are scared, but I think the fear is misplaced -- I would be scared of the stocks that everyone loves right now, and not of the stocks that everyone hates. HPQ trades for just 6.7X forward earnings and for 9X trailing earnings, which makes it a pretty reasonable value at current levels.

JASO -- Chinese solar stocks are among the most feared investment ideas in the word currently, and I can't blame investors for being scared of China after all of the recent accounting scams being uncovered and the trading halts in stocks like OTCPK:CCME, HQS, etc...etc. JASO is one of the largest players in its market however, so there is really no question that the company is a real and legitimate enterprise. Given that the stock is not some scam, a 3X P/E ratio seems a little too low in my view and if you can believe the books, a 20% discount to book value is also enticing for investors who "buy fear and sell greed."

In conclusion, value investors can make a fortune when buying dollars for fifty cents simply by understanding the two main concepts behind investment success -- buying fear and selling greed. Value investors are buying pieces of a business and looking to pay the best price possible to own a piece of a given company. Right now, there is a lot of fear in the AAII sentiment survey, however, the economic recovery is actually quite tepid for Main Street so some of this fear is well placed. That said, many times investors who are scared will sell everything at once, regardless of valuation.

Disclosure: I am long VALE, RIO, COP, TOT, HAST, KO, SIVR, JASO, FCX.