contrarian investment theory investment & finance definition
A trading theory that recommends making investments contrary to the apparent direction of the market or commonly accepted wisdom.
Contrarian
One who goes counter to the herd on Wall Street. A contrarian seeks out-of-favor sectors, may sell when others buy, etc.
Investing terms and definitions starting with
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Contrarian Investing
Following a strategy of consistently going against the current views of the market is called contrarian investing.
Contrarians Scoop Up Carnival Corp. Call Options ( CCL, XLF, IRM & WAC)
Andrew Wilkinson
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Definition
Contrarian
An investor who takes an opposite viewpoint from the majority. For example, a contrarian investor might buy when others are selling, or sell when others are buying, or even buy stocks that are not in favor by investors.
Contrarian Stock Market Investing Guide Part II
Greg Silberman CFA, CA(SA)
Profession: Portfolio Manager and Research Analyst
Company: Ritterband Investment Management LLC
e-Mail: greg@goldandoilstocks.com
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Contrarian Scalping Templete
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Contrarian
Definition:
An Investment style that leads one to Buy assets that have performed poorly and Sell assets that have performed well. There are two possible reasons this Strategy might work.
Contrarian Trading - liquidation long position when most traders are buying, and liquidation short position when most traders are selling.
The Art of Contrarian Trading: Volume, Consolidation, Distribution, Headlines
The Art of Contrarian Trading: Volume, Consolidation, Distribution, Headlines ...
Fade Stocks - Contrarian Investment Strategy
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Fading the Market ...
Issues in Using Contrarian Indicators
(1) Why, if this is true, is is that contrarian investors are so few in number or market power that the overreaction to new information is allowed to continue for so long?
contrarian " the fish who swims against the school; the sheep who separates himself from the flock. In Contra's case, we buy shares in listed companies who have experienced major financial difficulties but appear ready to right themselves ...
contrarian strategy - an investing strategy that appears to go against the mood of the market, buying heavily during sluggish, pessimistic markets and selling during periods of market optimism.
Contrarian Investing
As mentioned in the beginning of this article, the price momentum model tells investors they should buy past winners and sell past losers.
contrarian investing: Buying securities when others are pessimistic and then selling them when others are optimistic.
covering: Buying a security previously sold short.
current return: See yield.
Contrarian
An investor who purposely goes against the status quo.
Convertible Bond ...
Contrarian An investor who decides which securities to buy and sell by going against the crowd.
Contrarian Approach: Trading against the majority view of the marketplace. A contrarian is said to fade the trend.
Convergence: The movement of the price of a futures contract toward the price of the underlying cash commodity.
Contrarian
An investor who marches to a different drummer is sometimes described as a contrarian.
A contrarian contrarian strategy
This time I compared the post-recession returns of the aforementioned 278 large caps to the performance of 1,740 smaller companies.
The Contrarian Investor's Thirteen
by Benj Gallander
Benj Gallander is a Canadian investor with some useful ideas. Of note are his method of setting target sell prices based on an analysis of a company's 10 year share price spread.
[edit] Contrarian investing
Main article: Contrarian investing
Contrarian investing is a market timing strategy used in all trading time-frames.
Contra/contrarian fund - A fund with an investing strategy that seeks the stock of out-of-favour companies, with good fundamentals such as low debt or good potential earnings, with the belief that the stock will increase in value.
Contrarian funds are not a very good idea if it looks like the market is going to stay on one trend for a long period of time.
Contrarian investing strategy attempts to profit by investing in a manner that differs from the conventional wisdom, when the consensus opinion appears to be wrong.
CONTRARIAN
Describes an investor that believes and does the exact opposite of what the majority of investors are doing at any given moment.
Contrarian: similar to value investor. Looks for stocks with prices beaten down out of proportion to fundamentals.
Convertible Bond: a bond that can be exchanged for shares of stock.
"Contrarian" investors use sentiment indicators to determine what the majority of investors expect prices to do; they then do the opposite.
2 Contrarian Investing Indicators That Say 'Time to Buy'
A couple of remarkably accurate contrarian indicators have just rung the bell. Here's why you should buy now before the herd catches on...
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Contrarian Strategic Analysis: Contrarian strategy is the practice of looking for stocks that have been effected by an over-reaction to recent company announcements. This often happens when a company delivers bad news.
For contrarians, comparing VIX action with that of the market can yield good clues on future direction or duration of a move. The further VIX increases in value, the more panic there is in the market.
A contrarian investment strategy used to trade against the prevailing trend. "Fading the market" is typically very high risk, requiring the trader to have a high risk tolerance.
Dreman Contrarian
Screening lets us apply quantitative criteria to the broad universe of stocks in order to narrow the list down to a few companies. It allows us to focus our attention on a smaller but more promising group of stocks.
There are contrarian viewpoints, however, that suggest that strong negative ticks indicate oversold conditions and are therefore positive.
In addition, technical analysts often use running averages of the closing tick to gauge market conditions.
A somewhat contrarian outlook compared with what the charts are currently showing (see S&P 500 below) ...
The principles of Contrarian Investing hold that when the vast majority of people agree on anything, they are generally wrong. Otherwise no market would function because there is simply no minority with money enough to make a majority rich.
Also called contrarians because they see value where many other market participants do not.
taking a contrarian view that public short sellers are most often wrong, and in that sense the Total Short Ratio basicallly shows investor expectations.
That is the fundamental principle underlying contrarian trading/investing strategies.
Is the investment strategy a "contrarian" or "momentum" strategy? In a contrarian strategy, where investors are investing against the prevailing tide (buying when others are selling or selling when others are buying), ...
A continued period of lax monetary policy (low rates) would imply that the forex market will develop risk bubbles, that is, currencies of nations with weak fundamentals will appreciate way beyond their equilibrium value, which is a contrarian ...
The TRIN was developed as a contrarian indicator with the intent of pinpointing the critical levels at which a market becomes "overbought" or "oversold".
Humphrey Neill, the celebrated sage of Saxton's River, Vermont, has inspired generations of contrarians. His advice to investors: Beware of the crowd, don't be swept up by euphoria or down by despair. When everyone thinks alike, watch out.
Finally, the system faces the same fundamental issue incurred by all value or contrarian based strategies, namely, that 'undervaluation' is largely an opinion rather than a fact.
It is this market psychology that forms the basis of contrarian investing-selling when the masses are buying and buying when they are selling.
Ask TheStreet: Contrarian Cues
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Extreme values of this indicator can be a very useful tool for contrarian investors to foretell periods of exhaustion.
Of course the opposite is true for contrarian traders and investors who haven't gone short already. A break down below the 2 year trendline would simply add more fuel to the bear's case that a more lengthy decline is in store.
Still it's important to remember that the PVI is not a contrarian indicator. Even though the PVI should demonstrate what the not-so-smart-money is doing, it is however moving in the same direction as prices are.
But market contrarians pay their bills doing the exact opposite. They wait for a move to fail, and then sell the breakout or buy the breakdown. These mind-bending tactics don't end there.
The theory of value investing, which is sometimes also referred to as contrarian, was championed by Benjamin Graham. In his book, The Intelligent Investor, Graham covers the subject and working methods in some depth.
The PVI displays what the not-so-smart-money is doing. The PVI is not a contrarian indicator, it still trends in the same direction as prices.
Negative Volume Index
The NVI displays what the smart money is doing.
Related: Delivery month contrarians also called value managers, those who assemble portfolios with relatively lower betas, lower price-book and P/E ratios and higher dividend yields, seeing value where others do not.
The large white day can really scare the shorts and many contrarians will site this as bearish. If indeed the downtrend is strong, the one white day should not ruin the pattern. Hence, if the next day is down, the downtrend should continue.
It's not that I'm a contrarian because I also know how to follow a trend, but there is a huge difference between following a trend and not being aware of the risks.
Most trading systems are either trend following systems or mean reverting systems, which are also called contrarian systems. However, you can combine elements of both into one system. ...
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5, a very high Arms Index reading, a trader could take a contrarian stance and buy at the 1.5 level. Of course it would be advisable to see a reverse or bottoming of the Arms Index before taking such action.
Some stocks are contrarian, such as gold stocks. Often, when the general market dives, the US dollar follows suit, and traders buy precious metals for security. Other than that, most stocks will follow big market moves, either up to down.
Marketplace technical indicators attempt to determine the future performance of a security by closely searching at the forces that compel marketplace behavior. Breadth of the market, market volume, odd-lot trading-contrarian, ...
 See also: Trading, Chart, Indicator, Trend, Indicators
  
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