Contrarian
Categories: Econ, Financial Theory
Here’s a thought experiment. Everyone thinks the market is going up…but you think the market is going down. When the bulk of the market thinks that it’s time to purchase gold or invest in the Japanese yen, you’re talking about selling gold and picking up Venezuelan currency (or what’s left of it).
If that sounds like you and your opinions, you might be a “contrarian.”
A contrarian is anyone who claims they're following the opposite of mainstream thought...even if they're repeating the same talking points of previous people who claimed to be contrarians.
The market is littered with success stories of contrarians who made a fortune betting against the market consensus. Jim Rogers and George Soros broke the British Pound in 1992. David Einhorn and Michael Burry made a fortune betting against the housing market in 2008. But for every one of these success stories, there are countless untold tales of investors who bet big against the consensus and haven’t been heard from since their untimely bet.
