How to Make Money by Going Against the Herd

Lessons from famous contrarian investors

Contrarian investing. It’s a term that may stir up images of investors who take unnecessary risks by pumping huge sums into an untested and unproven investment.

Contrarian investors are often mistaken for risk-takers. But that’s not the case. Most people never think about it, but Warren Buffett is also a contrarian investor.

What does contrarian investing even mean? And more importantly, how can you apply its principles to your own investment strategy?

What it means to be a contrarian investor

Put simply, contrarian investors go against current market trends. They might buy when others are selling and sell when others are buying.

A good example is the fourth quarter of 2022, the year of The Great Inflation. As the S&P 500 and Nasdaq 100 were in bear market territory, the sentiment was negative. Everyone seemed to sell.

Most pundits believed that inflation would stay high and that interest rates would also be high for a long time. But from the start of 2023, we started seeing economic and market conditions improve.

The investors who bought stocks in 2022 were contrarians. The investors who sold were…