Contrarian
Contrarian strategies are strategies that go against the crowd (they do the opposite of whats popular at the time)
Experts
Adam Rodman
Adam Rozencwajg
Andy Krieger
Bill Ackman
Dan Fuss
David Dreman
Gary Brode
Hugh Hendry
Jason Trennert
Jim Rogers
John Paulson
John Templeton
Liz Simmie
Marc Faber
Mark Hake
Murray Stahl
Nick Giambruno
Peter Doyle
Richard Lawrence Jr.
Rick Rule
Roy Sebag
Simon Mikhailovich
Steven Romick
Tian Yang
Contrarian Strategies Common With Resource Investing
- Wide commodity price swings and cycles contribute to this
- The world requires commodities - companies and industries are unlikely to disappear
- If prices are low and companies are hurting, prices will eventually right themselves
- The companies can't all go bankrupt or the world still stop functioning
Contrarian strategies are easy in hindsight, but hard to implement
- Physiologically humans are include to follow the herd (it's in our DNA)
- Going against the herd makes us feel uncomfortable (even if its logical)
- It's hard to be a contrarian in practice when things are going the opposite direction
- Often the herd makes contrarians feel like they will miss out or get crushed
Contrarians Look For Companies & Industries That:
- the herd finds boring or fallen out of favor
- the heard hates (better than boring)
- have been forgotten
- that are needed by the world/economy and likely won't disappear (natural resources)
Contrarians Looks at Leading Indicators to help understand when a market turns
- When an industry is out of favor or depressed, generally only the strongest companies & management teams survive
- Investing at this time ensures you'll invest in a good company / management team (there are few/no bad ones)
- On the other hand, investing when an industry is hot and popular gives you less favorable odds of investing in a good firm or team
- When industries are hot, lots of companies start operating in the industry
- With lots of peopel operating and a strong industry tailwing, it's hard to tell who are the best companies nad managemnet teams
- Your odds of picking a good one are lower than when an industry is depresses and only the strong remain
Contrarian Jokes
- Everyone tries to be a contrarian when it's popular