The VALUE in Contrarian Investing

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I am a contrarian.  The term contrarian means: opposing or rejecting popular opinion; going against current practice.  If any of you have followed me on any social platform, or know me in real life, I tend to consistently promote the opposite of what is conventionally accepted.  To a certain extent this has served me well in life but it has also served me well as an investor.

Grant Cardone, Manny Khoshbin and many others are the same way and almost any other truly successful person is a contrarian.  This is because success is the goal and success is an aberration.  Meaning, to be successful you have to stand out from the crowd.  If you have what everyone else has, you are the rule, you are average and it is impossible to be successful if you operate in average. “Success and average have absolutely nothing to do with each other.” Eric Thomas.

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So, as it pertains to investing, I tend to buy the stocks that people hate.  This strategy tends to work well for me and I have only lost once on this (see Twitter).

I was not always a contrarian though.  When I first started investing I would light up when I saw a chart go green and run for a large gain, hoping it would run higher.  To me, green meant GO and I would immediately throw money into that company.  What happened, is the company would then pull back and I would lose because I fell into the trap of buying high and selling low.

After doing some soul searching, I flipped the strategy.  When I saw a company getting hammered, I would throw all my money into it.  Then as it turned around and came back to normal, even if it did not run all the way back to where it had fallen from, I would make money.  I do this all the time now.  The best way to do this is to buy a dip, ride the rally, sell the rally and then buy another company that has been hammered.  I successfully executed this strategy recently by flipping back and forth between Wells Fargo, Visa and Under Armour and dug myself out of the hole Twitter put me in.

Another way contrarianism has benefited me was when I pulled away from the crowd in life and focused on running my own race.  Most people are following the trends and once something becomes popular there is typically no money to be made.  The money is made in buying before its hot.  You may look foolish but its better than consistently taking L’s following the crowd.  I strongly stand by contrarianism.  It has proven to work well for me in all areas and aspects.  It takes guts to go against the crowd but the winnings outweigh the criticism and jokes.  Join the Todd Capital Investment Club TODAY by emailing capitaltodd@gmail.com

Be great!

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