Alexg's picture
Contrarian Magic 101

Where to start?

After reading all of the David Dreman books, I fell in love with what is called "Contrarian Investing". Contrarian Investing is tough as one is always going against what is popular at the time. Be early, and you will catch a falling knife (HD @ $40 anyone?). Eventually the stock might recover but time is the enemy so says Warren Buffett. Also an investor who buys HD @ $20 will enjoy a better return than an investor who bought HD @ $40. So after getting burned with some "contrarian plays"  I developed my own system for investing which I properly call "Contrarian Magic". Which is basically Low P/E stocks mixed with magic formula stocks. I then add a secret ingredient. I wont tell you because then I will have to kill you Innocent. The concept is simple but it takes time and patience to follow my system. So to sum up:

Contrarian Investing + Magic Formula Investing + Secret Ingrediant = Outperform The Market


Secret Ingredient

secret ingredient = relative strength

relative strength

whats that? (im serious)

Alexg,What did you do with

Alexg,

What did you do with HD?  Buy it at 40 and sell it at 20?

- Vooch

Vooch

Never did that.... I was simply explaining pitfalls of buying early which can be due to macro conditions