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|Do you like contrarian investing?
By The-Adviser.com -
|New York - Yes.
Contrarian investing is driven by the belief that stocks and markets are driven by
intangible emotions which cause stocks to differ from their intrinsic value. It is a
disciplined investment approach that helps investors avoid emotional traps. This strategy
seeks to profit by purchasing stocks that are out-of-favor or relatives values as compared
to other stocks and it avoids high-flying stocks that have been pushed up by market
Two standard contrarian valuation models are as follows:
Regardless of which models you choose, you need to ensure that you believe that these companies will continue to grow and prosper and that any problems or issues being faced are temporary.
Although any stock, including small-cap stocks, can be purchased using a contrarian method, we prefer large and medium sized companies because we perceive there is less overall risk. Large companies generally have managerial and financial resources to combat an industry or particular problem as compared to smaller companies
Contrarian investing is a disciplined investment approach that helps investors avoid emotional traps.
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