There are probably not as many contrarians as there are investors who think they are contrarians.
Take stock selection for instance. How does the average investor select stocks? Chances are high, that they are selecting stocks that they have read about in the media, or saw a money manager touting them on CNBC, or read an analyst report in Barrons or the like.
These are all examples of sheepish behavior, not contrarianism. Call me cynical, but many media stories I feel are intended to misdirect you. IN any event, by the time you read it, most of the investing world already knew that information and it's in the price. The same could be said of an analyst's report. Indeed, I like buying stocks after they've been downgraded (provided other data is supportive) or selling after they've been upgraded. As for what money managers are suggesting, let me say I'm especially sceptical. Are they really telling me what they are currently accumulating? If so, it would seem a disservice to their clients. More likely, they are telling me of stocks they have a large position in, and would like to trim their holdings. If you'll buy some, you'll help them out. They do believe in these stocks, just not at current price levels, they'd be buyers again at lower levels.
The best bargains may be quiet stocks that aren't attracting any attention. Another may be the stocks that everyone hates, they may well be oversold. If they aren't terminally ill, these stocks can be great investments, but most investors will be scared away.
AI
