Who is a contrarian investor
Generally speaking, a contrarian investor trades against prevailing market sentiments. When the market buys, the contrarian sells, and vice-versa. Contrarian investors look for opportunities to buy in a bear market and sell in a bull market.
Berkshire Hathaway Chair and Chief Executive Officer (CEO) Warren Buffett is a famous contrarian investor.
Contrarian investors believe that people who say the market is going up do so only when they are fully invested and have no further purchasing power. At this point, the market is at a peak. So, when people predict a downturn, they have already sold out, and the market can only go up at this point.
By going against the grain, contrarian investors may reap big gains if they have the time and patience to wait out their predictions. For example, one popular contrarian strategy is investing in stocks during a bear market or when stock prices fall.
Invest with Warren Buffet
Contrarian investors like Warren Buffet often target distressed stocks and then sell them once the share price has recovered, and other investors also begin targeting the company.
Contrarian investing is built around the idea that the herd instinct that can take control of market direction doesn’t make for a good investing strategy.
Buffett counseled investors to buy American stocks at the height of the 2008 financial crisis when markets were tumbling amidst a wave of bankruptcy filings. As an example, he purchased equities for American companies, including investment bank Goldman Sachs Group, Inc.
Ten years later, his advice proved to be correct. From 2008 to 2018, Goldman’s stock jumped by approximately 239%.
Portfolio includes:
- 15 carefully selected companies to invest in
- Investment strategy
- Rebalancing strategy
- Exit strategy
- Risk factor
- How long should you hold the position to realize maximum gain
- How to buy stocks for investment
- How to open a brokerage account
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