Anti-Anti-Contrarian

James Altucher coins a new word: Antidisestablishmentcontrarianism.

Don’t try to disassemble it with the prefixes and suffixes. I’ll tell you what it means because I coined it. It means the people against the people against the markets. In other words, I hate people who consider themselves contrarian investors.
Think about it. You hate them, too. They are on television, in newspapers and finance websites, they call you up with their smug advice. “I make my money going against the crowds,” they say. As if they are above the mindless masses, the one-eyed cyclopses running amok in mad mobs all over Wall Street. To be a contrarian investor, you have to assume people are stupid. You also have to assume that the masses, in general, lose money. Furthermore, you have to assume that you have the ability to rise up above this state of retardation and be a beacon of intelligence that knows more than everyone else.
The thing about contrarian investors, though, is that they are insecure. They want to point out that they are contrarian.
The reality is the masses are usually right. Let’s say you were a contrarian on internet stocks. Well the masses were buying internet stocks in 1995. If you were a contrarian, you would’ve been wiped out five times over or more every time you dived in. Heck, even if you were a so-called contrarian in January 2000, you probably would’ve been wiped out by February when most internet high-flyers had their last surge. No problem, contrarian pundits now say, “I was a little early then. No big deal. Just like I am now.”

I wholeheartedly agree. I can’t stand to hear contrarians congratulate themselves for their “bravery.” The more I look at momentum stocks, the more it appears that running with the crowd is a better strategy.
We need a better word, though. Momentumtarians?

Posted by on December 22nd, 2007 at 11:54 am


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