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reddingrunner (95.69)

We all agree: The consensus is usually wrong.

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January 19, 2014 – Comments (5) | RELATED TICKERS: BRK-B

Everyone knows now that what everyone knows about what the market is going to do is usually wrong.

What do you do with that?

If everyone believes that the opposite of what everyone believes is what is most likely to occur, what do you believe?

How can one be a contrarian when contrarianism is cool?

My take: Events are in control.  The thing no one knows is what big events (black swans, etc) will occur (or what feared events WON'T occur) until they do.  When they do (or don't) the market will react.  

Play the probabilities and hedge your convictions in case something happens (or doesn't happen) contrary to your expectations.  

Besides general diversification, I like BRK.B a lot right now.  I want low volatility with a chance to capture some upside if that's the way things play out.

How 'bout you? 

5 Comments – Post Your Own

#1) On January 19, 2014 at 3:53 PM, mikey22222 (< 20) wrote:

I am a contrarian by nature.  What I have learned is that there are degrees of what "everyone thinks"  A contrarian can get run over by a strong trend.  It is better observing and going with momentum than fighting it.  Even better would be not to worry about what everyone thinks.  Just think for yourself and when you believe the crowd is to big find another strong but less followed trend.

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#2) On January 19, 2014 at 3:58 PM, mikey22222 (< 20) wrote:

PS Just between you and me BRK.B is about as consensus as it gets.

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#3) On January 20, 2014 at 3:36 AM, awallejr (76.71) wrote:

I challenge what most people consider "contrarian."  It doesn't mean just do the opposite,  A true contrarian looks at beat up stocks and sifts the chaff from the grain.  Look at the lows and choose accordingly, not because they are low but because the baby was thrown out with the bath water.

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#4) On January 20, 2014 at 6:34 PM, Mary953 (79.05) wrote:

Everyone knows now that what everyone knows about what the market is going to do is usually wrong.

+1 just for that.   

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#5) On January 22, 2014 at 11:24 AM, reddingrunner (95.69) wrote:

good points.  i like berkshire now for the safety, not because it is contrarian.  in a time when i can't even quite figure out how to be a contrarian, i want safety.

my more contrarian investments at the moment would probably be NUS and EMCG. 

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