In finance, a contrarian takes the view that widespread pessimism tends to lead to market rallies and that widespread optimism tends to lead to market slumps. Contrarians are sometimes thought of as perma-bears—market participants who are permanently biased to a bear market view. However, the contrarian is not biased specifically towards a negative view of the price trend in a market. Further, contrary to popular belief, the contrarian is not necessarily limited to taking a contrary position to the prevailing crowd's view. Rather, the contrarian seeks opportunities to profit from situations when the crowd mentality leads to unreasonable valuations for assets, either on the upside or the downside. For example, selling companies that appear to be overvalued due to a flood of excessive hype is a time-honored contrarian strategy. Similarly, investing in companies that have been unduly devalued due to temporary setbacks is a classic contrarian tactic. Value investing thus is often characterized as a subset of contrarian investing. A bear market is a prolonged period of time when prices are falling in a financial market. ... Value investing is a style of investment strategy from the so-called Graham & Dodd School. ...

Note that neither of the above methods necessarily comprises betting against the overall market trend. A contrarian may seek to capitalize on a prevaling bull market by investing in an undervalued asset, for example.

Philosophically, a contrarian is a person who tends to take positions that openly challenge conventional wisdom. In finance, a postion may be: A commitment to buy or sell a given amount of securities or commodities; The amount of securities or commodities held by a person, firm, or institution; or The ownership status of a persons or institutions investments. ...

In Sociology, the term can be understood as an attitude of going against the establishment in terms of the social mores of the time. A social contrarian attempts to show to others, like Socrates through Plato, that there is something inherently wrong with their limited world view.

See also

• Individualism
• Noam Chomsky
• Barry S Sussman

Individualism is a term used to describe a moral, political, or social outlook that stresses human independence and the importance of individual self-reliance and liberty. ... Avram Noam Chomsky, Ph. ... Barry S. Sussman, born 1960 in Englewood , NJ . ...

External Links

• QuiteContrarian.com