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Strategy

Contrarian

Go against the crowd.

Medium-termActiveAndré Kostolany, David Dreman

Core idea

Contrarians buy when sentiment is extremely negative and grow cautious in euphoric phases. The core idea: market extremes tend to revert over time.

How it works

You watch sentiment indicators, valuations and extreme situations and act deliberately against the prevailing market view.

Pros

  • Chance at attractive entry prices
  • Disciplined thinking against the herd

Cons

  • Timing is very hard
  • A trend can last much longer than expected
  • Psychologically demanding
Known for
André Kostolany, David Dreman

For educational and informational purposes — not investment advice, not a recommendation to follow this strategy.