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Why I’m a Contrarian?

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1Why I’m a Contrarian? Empty Why I’m a Contrarian? Mon May 14, 2012 6:08 pm



I’m a contrarian. That means I’m not a mainstream kind of guy — not by any stretch of the imagination. A contrarian is someone who doesn’t always accept the “acceptable” view of things – especially when it comes to money.

The reason I’m a contrarian is simple: statistically speaking, most people have to be wrong about almost everything — philosophy, religion, politics, economics, finance, etc. It’s just a basic part of the law of non-contradiction – most people disagree with most other people about things that are mutually exclusive.

I’ll explain why and how all this works in this article – and how this means you can make money by leaving the mainstream and joining the contrarian investment crowd.

Almost Everyone is Wrong About Almost Everything

Let’s start with a topic that most people have strong opinions regarding: religion. No religion is believed by a majority of history’s people. In other words, if Islam is correct, then most of the world is wrong. If Christianity is correct, then most of the world is still wrong. The same goes for any religion — regardless of who is right, most are wrong.

Take finance, for example. Financially speaking, most people are clueless. In terms of investing, almost every investor individually doesn’t make as much money as the market does naturally. In terms of financial planning, few people are truly succesful — even financial planners are often up to their eyeballs in debt, and are worried about something happening that would leave them homeless.

Take economics, for example. In terms of economics, the experts were all piling their money into a housing bubble. They were almost all completely wrong. If you were a contrarian when it came to the housing bubble, you could have made hundreds of millions — but most were just sheep, and lost their shirts.

Of course, these are just examples. The real evidence for a contrarian philosophy is by just observing the personal lives of most people. Almost everyone is deeply messed up on some level. People are liars, cheaters, adultery is rampant, irrationality is as common as dirt — the common man has major issues.

What does this mean? It means that when a collection of messed up people seems to believe something is true, you shouldn’t automatically follow their intellectual path like a sheep. Widespread belief isn’t necessarily an indicator of the legitimacy of a belief system.

A Quick Look at History

If we lived in the early 1800s, then believing that slavery was wrong would put you in a contrarian camp.

If we lived in the early 1600s, then believing that a democratic republic was an okay system of government would have put you in a contrarian camp.

If you lived in the early 8th century, then believing that serfs had property rights would have put you in a contrarian camp.

In the end, almost every major social movement in history that is now considered correct was once contrarian. The story of civilization isn’t over yet, folks, and there’s no telling how many widespread systems and beliefs exist that are completely unfactual, unfounded and maybe even morally wrong.

How Contrarians are Perceived

Some see this as a pessimistic view of life. I’m not quite sure why that has to be so — just because most people are wrong doesn’t mean one can’t figure out the truth. You just have to be open to the road less traveled.

Still, people who prefer traditional and comfortable belief systems are likely to scoff at a contrarian, dismiss the contrarian as some sort of pessimistic and depressed “radical” fringe, and proudly strut back to their popular beliefs.

But this is absurd.

Contrarians aren’t pessimists — contrarians are optimistic realists. Rather than looking at a common lifestyle, and concluding “this is as good as it gets”, we contrarians are able to look over the general population and say, “It gets better than this.” Far from pessimistic, we’re as optimistic as it gets.

While the traditionalist is usually the one who says, “it’ll never work”, the contrarian is the one who says, “Maybe you’re right — give it a try.” Contrarian individualists are behind every great invention and social advancement in the history of man.

The airplain? Invented by contrarians.

The automobile? Pushed forward by contrarians.

The civil rights movement? Led by contrarians.

The American Revolution? Sparked by contrarians.

In the end, a contrarian is an intellectual individualist. The contrarian has looked over the collective and popular views of the way things are done, and is unsatisfied. “It can be better”, the contrarian believes — and he sets out to make it so.

But perhaps more importantly than the perception of others is one’s own perception. The contrarian is an intellectual individualist – someone who isn’t afraid to ignore the whims of the crowd. The contrarian is afforded the luxury so few others even know exists – the luxury of mental independence. Frank Sinatra sang of this luxury in his epic cover of “My Way”, singing:

“What has a man, what has he got? If not himself, he has naught.”

The contrarian philosophy is the philosophy of being able to say: “This is what I believe. I believe it is true, not because of comfort, culture or popularity – I believe something only if I have honestly analyzed the facts and have concluded that it is the truth. And the only standard for my beliefs is that truth.”

How to Become a Contrarian

Of course, not all contrarians are right. Most contrarians are probably wrong about almost everything – just like everyone else. Becoming successful isn’t just about randomly disagreeing with others; to be as successful contrarion, you have to be consistently right, even when most people are wrong.

This requires you consistently achieve several standards:

Critical Thinking. Learning to think in a logical manner has NOTHING to do with having high intelligence or having a college degree. Sometimes the most intelligent and well educated individuals are also the most irrational – one just has to check out the last few presidents to see bright and shining examples of this. To learn critical thinking, brush up on philosophical epestimology, common logical fallacies, and maybe even take a course on logic.

Intellectual Integrity. We live in a postmodern age where very few individuals have the guts to follow through with their beliefs. Intellectual cowardice is probably one of the most heart-breaking and widespread human flaws – even the founding fathers didn’t have the intellectual guts to recognize that “all men are created equal” applied to, well, all men – including those considered slaves at the time. Learn to follow through with your beliefs and you’ll quickly find inconsistencies that are popular and easily avoidable.

Consistent Curiosity. Of course, if you aren’t asking questions, you’ll probably never see the right opportunities to leave the mainstream and go “rogue” – this means you need to be constantly curious.

Education. Having a well-rounded education is extremely important to figuring out what to do next regarding your money. But what is a well-rounded education? It’s one that provides you with a solid understanding of economics, finance, investing, business, accounting, politics, epestimology, history, world cultures, and world religions. Every one of these topics will come into play in your wealth management journey and can completely alter your financial plan. Most “politically correct” views of money are based, at least in part, on ignorance that could be prevented with a proper education.

What This Means For Us

Being open to regjecting mainstream ideas has huge, huge, huge financial implications. Having the courage to laugh at pop financial advisors, like Suze Orman, changes the entire financial planning ball game.

Getting Out of Debt. Most financial advisors encourage debt. Student loans, a mortgage, small business loans — all of these are typically seen as good things. This contrarian humbily disagrees.

Choosing to be Jobless. Almost everyone thinks only in terms of getting a job — especially people in the younger generations. Not going to college and skipping straight to starting a business is seen as too risky, extremely scary, and is rarely ever encouraged. I think that’s heart breaking — being a business owner is something everyone should try.

Investing for Profits. Being a contrarian in the investing field offers the potential for great profits — as long as you’re right. If you figure out a market/business that’s going to explode while most people don’t think so, you can get in cheap, and get out with huge profits.

Not Going Down With the Ship. The general population very rarely believes a recession is coming. Most people never saw the great depression coming. Most people didn’t see our current recession coming. Most people get blindsided. By entertaining contrarian views, it’s possible to find a safe haven for your capital before it’s too late.

Last Thoughts and Conclusions

Becoming a contrarian isn’t about randomly disagreeing with others – it’s about independence, individualism, and honestly analyzing every possibility, regardless of how politically correct the proposition is. Contrarianism is about seeking the truth over popularity.

Never confuse a “contrarian” with someone who is just hard to get along with. The best and richest contrarians I know are also congenial, easy going, and friendly.

To learn more about the philosophy of contrarianism, just read this website. Better yet, just ask the question “why” every time you hear a bit of cliche financial advice about college, retirement, investing or economics. Questioning tradition is the first step.

2Why I’m a Contrarian? Empty Re: Why I’m a Contrarian? Tue May 15, 2012 2:59 pm


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

Becoming a contrarian isn’t about randomly disagreeing with others – it’s about independence, individualism, and honestly analyzing every possibility, regardless of how politically correct the proposition is. Contrarianism is about seeking the truth over popularity.

Good one to read.
Thanks for sharing.

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