contrarian investing
Beware When Shorting Stocks
Over the course of the longest bull market in history contrarian investors have again and again predicted doom and gloom and been burned again and again. As noted in the movie “The Big Short,” there are times when shorting a stock can be immensely profitable. But, choosing what to short and timing of when to do it are keys to making money with this approach. Unfortunately for contrarian investors, in the last year the “most shorted stocks” went up as a group more than twenty percent! So, you should beware of shorting stocks. […]
When Do Contrarian Investments Work?
A recent article in US News and World Report looked at eight
potentially profitable contrarian investments. That got us to thinking. When do
contrarian investments work and when are they just value traps? In a recent
article we asked, are there any cheap investments left? In it we visited the
same issue from a slightly different viewpoint. Here are the contrarian
investments suggested Bank of America and reported by US News and a few
thoughts about each one as well as contrarian investing in general.
Contrarian Investments to Check Out
In their article, US News
writes about stocks that are “due to bounce.” They offer stocks that are down
at […]
How Do You Pick an Investment to Short?
The popular movie, The Big Short, dramatized how hedge fund manager Michael Burry made a profit of $2.69 billion by anticipating the collapse of the US housing market in 2007. Burry created a credit default swap market when he realized that the vast number of high risk subprime loans made the housing market unstable. There is a lot of detail in the movie but the point which interests us here is how do you pick an investment to short? This thought came to mind as we consider and re-consider the aging bull market, the risk of a trade war with […]
Make Money Investing
The first order of business if you want to make money investing is fundamental analysis of the investment opportunity. In the years after the 1929 stock market crash that ushered in the Great Depression investors learned the concepts of intrinsic value and margin of safety. No longer was investing in the stock market akin to […]