I wasn’t always a momentum investor. Like many of you, I began my career as a contrarian investor. After all, some of history’s most successful investors have been contrarians. Baron Rothschild, Warren Buffett, George Soros — all made their fortunes in part by betting against prevailing market opinion. Baron Rothschild, often considered to be the father of contrarian investing, was a London-based financier in the 18th century. You probably know him from his most famous piece of investing advice: “Buy when there’s blood in the streets.” #-ad_banner-#Although these days the quote simply means buy when others are… Read More
I wasn’t always a momentum investor. Like many of you, I began my career as a contrarian investor. After all, some of history’s most successful investors have been contrarians. Baron Rothschild, Warren Buffett, George Soros — all made their fortunes in part by betting against prevailing market opinion. Baron Rothschild, often considered to be the father of contrarian investing, was a London-based financier in the 18th century. You probably know him from his most famous piece of investing advice: “Buy when there’s blood in the streets.” #-ad_banner-#Although these days the quote simply means buy when others are fearful, it was more literal when he said it. Rothschild invested in beaten-down British bonds while Britain, and most of Europe, were at war with the French. It was risky. If the British had been defeated, which was a real possibility, the bonds would have been worthless. But Rothschild ended up making a small fortune once the British defeated Napoleon’s army in the Battle of Waterloo. Centuries later, contrarian investors are still finding success. George Soros is best-known for making one of the boldest trades in history, contrarian or otherwise. He infamously sold short about $10 billion in British pounds… Read More