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Monday, 27 March 2017

Herding Affirmation Meets Contrarian


Monkey see; monkey do.

We know what it meant (not exactly flattering); but it feels so much more comforting to swim as a school of sardines, to graze together as a herd of zebras, fly as a flock of geese, and hunt together as a pride of lions.

Although we call ourselves DIY "investors", we buy subscriptions to newsletters that tell us what the famous investors or hedge fund managers are doing and jump on the same bandwagon.

The freeloaders just mimic other commercially vested financial bloggers. Free what?


That's very comforting until we stumbled onto Contrarian Investing.

And now we jammed.

Idiot. We have to make a decision on our own for once...





32 comments:

  1. Contrarian Investing is not herd?

    ReplyDelete
  2. Need England tutor to explain. Lol

    ReplyDelete
  3. Ha! Ha!

    Two is company, 3 is crowd.

    This is English right?

    Then it must follow 4 is herd LOL!

    ReplyDelete
    Replies
    1. Like the "mad scientist" born before his time.

      Delete
    2. temperament,

      Imagine the strength of Galileo's convictions and how lonely and trying it must be when challenged by mainstream, "Where got? Everyone can clearly see its the Sun that revolves around Earth! You talking what?"


      That's my biggest fear as an investor. To discover I'm mainstream...


      Delete
  4. Hi SMOL,

    This is close to heart, since I'm a counter trend trader, so technically i'm a contrarian in the TA world. I think there are two sorts of contrarian:

    1) Doing opposite of whatever others are doing - this is superficially contrarian, simply because the action is reactive and it seems like the person is a contrarian. This is a higher level of following the herd, since if you break down what 'following the herd' means, it's just means not thinking for yourself. Being reactive and doing opposite of what others are doing is not thinking for yourself.

    2) Thinking for yourself, and deciding for yourself without seeking validity and approval from others - This is a true contrarian, regardless of the action that follows. You can be walking together with the crowd without following them at all. The thought process is independent and the action that follows is not reactive.


    I think it's easy to superficially look at the actions to see if someone is contrarian, but it's better to judge a contrarian by the independence of the thought process leading to the action.

    ReplyDelete
    Replies
    1. 1) CW,

      The England tutor you requested has replied us. How?



      2) LP,

      A piece of my earthen brick in exchange for your jade.

      Most humbled and grateful for your generosity!






      Delete
    2. Most retail Contrarian Investing is still herd investing as they are likely also to check around before pulling the trigger

      Delete
    3. CW,

      You so nice!

      Still want to call them "Contrarian Investors" ;)


      Delete
  5. Contrarian investor?

    How can really see one? Contrarian can be by thoughts and actions. There can never be 1, in its surface mathematics form, because in whatever market, there are buyers and sellers. Notice the plural. Even when there is a drastic gap down or up. There are more than 1 buyer or seller.

    Contrarian is I walk my path, doesn't matter if I have company, have an army or occasional alone. It's ok. I know where I am going.

    Some might be shouting, let's go, we well get there, some might be shouting be greedy when others are fearful, some might be saying u siao ah

    You only answer is "whatever."

    Conviction is a hallmark of a contrarian

    I am not a contrarian. I am an explorer, u say green over there I go see look look, u say sai over there, I walk a bit slower but also want to see or smell smell LOL

    ReplyDelete
  6. Oops sorry, didn't know I have the same ideas(generally) as LP,

    Dun throw eggs at me, honest, I reply first. Then read ... ok ok I am a follower, worse copier. Hey copying with conviction is also contrarian lor

    ReplyDelete
    Replies
    1. Sillyinvestor,

      No worries lah!

      Most of us understand the two - its just the same wine in different bottles.


      My post is to poke at myself.

      I'm a Trend Follower remember?

      There's a difference between jumping on early onto a trend (less crowded) and selling to those who finally capitulates and jumps on too when he sees everyone and anyone on the same choo choo train ;)

      Same same but different!

      For eg, CW has Keppel.

      A bei kambing blindly following him seduced by the powerpoints of orderbook and increasing dividends over the years would have lost money.

      People bought at $1 plus, you bought at $10 plus.

      Someone is a contrarian; someone is bei kambing ;)

      LOL!





      Delete
    2. Hmm... same wine different bottle? Wonder what kind of bottles he and I are? LOL

      Delete
  7. Smol,

    If we take a step backwards. How many of us can really say we know where we are going?

    Maybe LP and u as both of u has take a path of less traveled. For most of us, it's ok to be a follower initially, just have a explorer mindset

    ReplyDelete
    Replies
    1. Sillyinvestor,

      We are all same same.

      Its just 50 steps laughing at those 100 steps in front ;)

      We won't know who has the last laugh until the fat lady sings!

      LOL!

      Delete
  8. The fat lady sings the same songs, always.

    Never mind what you like to think or call yourself, make money can liu.

    ReplyDelete
    Replies
    1. temperament,

      Don't ask what colour I am; ask whether I can catch mice ;)

      Meow.

      Delete
  9. SMOL,

    Investing or trading is quite similar to how to live a life.
    Most of the time, we are in the middle path. Not taking a position. Until it is swing to either extremes that we sell or buy depending on investment strategy.
    Simple yet difficult to do.

    Just like how we should live a life in the middle. Simple yet difficult to do.

    ReplyDelete
    Replies
    1. Blursotong King,

      不動如山;動如雷霆。


      My corporate life and investing/trading journey were pretty mundane like plain bread.

      By being in the here and now, I've been lucky enough to spot opportunities that were missed by others as they had blinkers on (distracted by goals and over planning).

      Seizing them coupled with occasional sparks of brilliance, I've been quite lucky.


      The big money is made by sitting tight. This is true.

      Most assume this applies to buy and hold.

      Not so.

      It also means we do nothing and sit on the sidelines until an opportunity presents itself.

      Then we pounce!


      Delete
  10. SMOL

    There is nothing wrong with buy and hold if you can get a good entry price like Uncle Wealth8888 and during the periods collect dividends which are now above the purchased price. Some more do trading around the core holdings. Double power!!!

    I notice you omitted your personal life. Must be like a roller coaster rides with lots of excitement and sadness, I guess

    ReplyDelete
    Replies
    1. Blursotong King,

      Yup, nothing with buy and hold, if only they don't turn out to be Creative, NOL, Chartered Semiconductor, Shipping Trusts, fraudulent S-chips; etc ;


      Oh, my personal life is quite mundane too. Although must say Shanghai was like a dream... A fantasy life if you will.

      Experienced a lot of things and got them out of my system.

      Now back to watching paint dry at the ceiling ;)

      Delete
  11. whether contrarian or herding, the most important to me is the result or fruit over long term whether in stocking investing or in life.



    ReplyDelete
    Replies
    1. Hi Rolf!

      Yes, its how we finish that matters ;)

      Delete
  12. Follow ASSI is it herd mentality?

    ReplyDelete
    Replies
    1. arithmos,

      LOL!

      What is your definition of "follow"?

      Delete
  13. He say he has sig investment in CRT, my investment in CRT is significant too, he has Saizen, I had saizen, and so forth

    Living like a squirrel is not my cup of tea though ...

    Man of leisure ... that is the way

    ReplyDelete
    Replies
    1. arithmos,

      Well, he also owned a small speculative position in Marco Polo Marine...

      Did you?

      If yes, well, confirmed you're a blind follower!

      If no, well, at least if he jumps off the bridge, you won't follow!

      LOL!

      Delete

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