Investment Special: Contrarianism pays
When pessimism prevails, it’s probably time to buyIf one thing puzzles private investors more than anything else, it is the extraordinary capacity of the stock market to move in ways that appear to follow no discernible logic. ‘Profits Up, Shares Tumble’, or even ‘World War Declared, Stocks Rise’: such headlines understandably confuse the uninitiated. But in reality there’s nothing strange about this pattern of behaviour, and understanding it explains why being a contrarian — going against the thrust of expert professional opinion — is so often the key to the greatest investment success.