«
»

Contrarian Investing

Email this post Print this post
By Barry Ritholtz - July 6th, 2010, 10:30AM

Fantastic investor letter from the Lex team at the FT on contrarian investing against the expert consensus:

“Dear Investor,

It has been a profitable first half for Contrarian Partners. Our core investment strategy remains unchanged: to mine the research produced by investment banks every six months to establish consensus trading strategies. Then trade against them . . .

In general, though, the advice was reassuringly poor. The markets continue to reward us for listening to the experts – then doing the opposite.”

Go read the full letter — its great stuff . . .

>

Source:
Contrarian investing
FT.com, July 5 2010 http://www.ft.com/cms/s/3/d5976b8e-883e-11df-a4e7-00144feabdc0.html

PERMALINK
Category: Contrary Indicators, Psychology/Sentiment, Really, really bad calls.

Comments

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

7 Responses to “Contrarian Investing”

  1. VennData Says:
    July 6th, 2010 at 11:21 am

    Oh no… my secret’s out.

  2. My Type of Fund « Dynamic Hedge Says:
    July 6th, 2010 at 11:33 am

    [...] Source: The Big Picture via FT.com // Share| Uncategorized    For-Profit Education Run Down » [...]

  3. Mark E Hoffer Says:
    July 6th, 2010 at 11:48 am

    I’m surprised I didn’t hear this from Katie (as in, Couric)…as if…
    http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Katie+Couric+disinfo+mouthpiece+spewing+prolefeed

    though, given http://www.roguegovernment.com/Goldman_Admits_It_Had_Bigger_Role_In_AIG_Deals/21863/0/8/8/Y/M.html
    “…Source: McClatchy

    WASHINGTON — Reversing its oft-repeated position that it was acting only on behalf of its clients in its exotic dealings with the American International Group, Goldman Sachs now says that it also used its own money to make secret wagers against the U.S. housing market.

    A senior Goldman executive disclosed the “bilateral” wagers on subprime mortgages in an interview with McClatchy, marking the first time that the Wall Street titan has conceded that its dealings with troubled insurer AIG went far beyond acting as an “intermediary” responding to its clients’ demands.

    The official, who Goldman made available to McClatchy on the condition he remain anonymous, declined to reveal how much money Goldman reaped from its trades with AIG.

    However, the wagers were part of a package of deals that had a face value of $3 billion, and in a recent settlement, AIG agreed to pay Goldman between $1.5 billion and $2 billion. AIG’s losses on those deals, for which Goldman is thought to have paid less than $10 million, were ultimately borne by taxpayers as part of the government’s bailout of the insurer….”

    and.. http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Wall+Street+trades+against+its+Clients

    past that, good on “Contrarian Partners”, and FT’s Lex, for reporting such..

  4. rob Says:
    July 6th, 2010 at 11:50 am

    First there BRIC, then the PIIGS, now investors have a new focus (and acronym) to invest in. With focus on California, Michigan, Illinois, and New York and potential for strapped funds, contrarians can now plow their money into CMIN. The spreads are eye popping. So run out today to get you a big wad of CMIN and get what’s coming to you.

  5. Marcus Aurelius Says:
    July 6th, 2010 at 11:52 am

    What gives? I can’t post a comment, and I didn’t even drop the F-bomb.

    ~~~

    BR: We got buried in spam comments, and Ihave the shields on full.

    Over thre past 24 hours, the Askimet filter nuked 1,000s of spam comments, captured about 600 in the “maybe” filter, of which about 45 were legit.

    This was one of those . . .

  6. ftstrader Says:
    July 6th, 2010 at 2:54 pm

    This is news? I have been trading against the consensus for years/decades, even. It works beautifully trading the indexes, especially when consensus is so one-sided. Recent example: the Euro/Dollar, when it traded under 1.20 last month, the technicals were all lined up and the bulls were nowhere in sight. Our decision? BUY. We have seen a 750 pip rally since. Same with Gold – every opinion I have seen in the past few months have been uniformly bullish – some rabidly so. At $1250 area last month, the technicals were telling me one story – the top is in. We’ve had a $60 drop (so far). I love this sport – trading against the consensus.

  7. dead hobo Says:
    July 6th, 2010 at 4:43 pm

    The Secrets Of Contrarian Investing.

    1) Everyone Who Makes A Cover Of A Major Magazine Is Wrong. Do the opposite of what they say. Especially if they were once boutique but are now catfish common.

    2) If a magazine claims something is true on the cover, bet against it because only idiots who live to follow the crowd write cover stories.

    3) Regarding point 1: If some shlub you never heard of makes a cover of a magazine using some new theory, buy everything they’re selling. Then sell it all because only idiots bought when you did. You’ll make a mint.

    4) Barron’s covers all 360 degrees every quarter or so. They’re always right in retrospect and can prove it in print. Beware. Buy what they’re selling, then sell it to the idiots who bought when you did.

    5) When a crusty old fuck says something notable on an obscure web page, consider it golden. If that same crusty old fuck says it on Yahoo Ticker, do the opposite.

    6) Everyone you read is wrong. Do the opposite and you will become rich beyond avarice. Especially if they sat it in a highly public and popular venue. Don’t be afraid to use leverage.

    7) Believe everyone you disagree with, but do the opposite.

60 queries. 0.300 seconds.