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The way I see it, the idea of being a “contrarian investor” has gotten all twisted around by the mainstream media.
It’s not as simple as just taking what’s currently popular and joining the other side of the debate.
There are times when the crowd is right. And other times when the majority is wrong.
So true contrarians consider all possibilities, examine the facts independently, and then draw their own conclusions.
If your findings happen to go against the consensus, fine. You STILL act in accordance with your own research and wait for the rest of the crowd to catch on … all the while knowing you stand to make even better profits by getting there first!
In short, being a contrarian is all about conviction and confidence in your own due diligence. It’s thinking for yourself.
I have to tell you, most of the people I know who fit the bill are professionals working in relative obscurity: Guys who manage private money or simply invest their own personal fortunes.
Heck, even the few famous contrarians out there — guys like John Paulson — are mostly celebrated only after their huge bets pay off!
As you might know, Paulson is the hedge fund manager who made billions betting against the U.S. housing bubble as well as American banks throughout the financial crisis of 2008.
For more on the history of Paulson and his bets, I suggest you read Michael Lewis’ book, The Big Short.
At this point, I’d just point out that Paulson has now reportedly been loading up on bank stocks!
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| Tom Essaye |
Tom is currently the director of research at Weiss.
He’s a former NYSE floor trader. He has multiple degrees in finance. And he used to manage millions for private investors at his old hedge fund.
Tom thinks like a true contrarian, and that’s why I love talking about the markets with him.
In fact, Tom recently introduced me to a very interesting niche investment vehicle that I can only describe as THE most contrarian idea I’ve heard for the coming year.
I won’t keep you in suspense: They’re a handful of off-the-radar investments that only came about because of the government’s bank bailouts!
I mean, is there any more universally-hated thing in the United States right now than American financial institutions and the bailout money they received?
Heck, the Occupy Wall Street crowd would picket our houses if they heard us talking about these investments!
But I would find that kind of opposition comforting; especially since Tom and I have been doing some serious research to support our investment case on these special “government bailout contracts.”
And regardless of what the crowd might say, we’re convinced that investing in these unique vehicles right now could soon pay huge rewards.
But I also want to remind you that – even outside of this particular example of contrarian investing – you should ALWAYS put profit potential far ahead of what other people think!
Best wishes,
Nilus
P.S. Perhaps the coolest part is that these “government bailout contracts” are not stocks, bonds, preferreds, options, or any of the other categories of investments most people are familiar with.
However, because these investments do NOT produce income, I don’t envision them ever getting added to either of my Income Superstars portfolios. Nor do I plan on mentioning them again in my regular columns here.
So, again, reading this report we just posted may very well be your only opportunity to learn more about them.
