Beat the Crowd

Most investors are wrong most of the time. To be a true contrarian investor, you know you won’t be right all the time. You know the market is The Great Humiliator and you expect to be wrong 30-40% of the time. The difference though is that a contrarian will be right more often than wrong. The real contrarian knows markets look 3 to 40 months out and look hardest at the next 12 to 18 months. They know every earnings report, corporate action, GDP release, etc. is baked in nanoseconds after its released. They know it’s not a matter of whether things like Obamacare are good or bad, because anything so widely discussed is already priced in. They know infinite, unforeseeable technological changes will collide to address whichever long-term thing everyone fears. So, they look at today’s fundamental reality, and they try to game how it will impact corporate earnings looking forward. They look at sentiment and try to game whether it’s too high or too low given where earnings will be. This is Beating the Crowd.