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An investment style that leads one to buy assets that have performed poorly and sell assets that have performed well. There are two possible reasons this strategy might work. The first is a mean-reversion argument; that is, if the asset has deviated from its usual level, it should eventually return to that usual level. The second reason has to do with overreaction. Investors might have overreacted to bad news sending the asset price lower than it should be.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


An investor who buys securities that others are selling and sells those that others are buying. A contrarian operates on the premise that most other investors are wrong most of the time since they tend to overreact to both good news and bad news. As a result, a contrarian assumes that either prices will revert to the mean and he/she will make a small profit, or that investors are entirely wrong and the market is moving in another direction, in which case the contrarian will realize a larger profit. See also: Crowd.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


An investor who decides which securities to buy and sell by going against the crowd. For example, a contrarian would tend to purchase the stock of steel companies when steel stock prices are depressed and most investment counselors are advising against them. Contrarians operate on the premise that when stocks are very popular they are overbought and when they are very unpopular they are oversold.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


An investor who marches to a different drummer is sometimes described as a contrarian. In other words, if most investors are buying large-cap growth stocks, a contrarian is concentrating on building a portfolio of small-cap value stocks.

This approach is based, in part, on the idea that if everybody expects something to happen, it probably won't.

In addition, the contrarian believes that if other investors are fully committed to a certain type of investment, they're not likely to have cash available if a better one comes along. But the contrarian would.

Contrarian mutual funds use this approach as their investment strategy, concentrating on building a portfolio of out-of-favor, and therefore often undervalued, investments.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Thus, we proposed to also include complementary drivers that could explain contrarianism in future research, like trust in government, religion, or political-economic path dependencies.
Climate change contrarianism has been essential in the United States in blocking measures to reduce global warming emissions and protect the interests of the elites in relation to the most polluting industries (McCright & Dunlap, 2010).
Thiel's contrarianism is notorious, and he appears to delight in saying or doing the unexpected, even at the risk of ridicule.
It's not the way that painting works.' Instead he elected to take the opposite approach from that expected of him (a symptom, I suspect, of a more general contrarianism), and produce a work from the 'lowest rung on the painterly hierarchy, a still life'.
The two legacies from his dad, Bryan Curtis wrote in Grantland last year, could well be "a measure of his dad's idealism, his contrarianism, his stubbornness.
(It's a good history, though.) All readers will gain from examining the useful and clear distinctions that Jamieson draws regarding climate skepticism, contrarianism, and denialism.
In addition to obtaining the fellowship at Peterhouse, of which Butterfield was then Master, he published two books, The Nature and Limits of Political Science and Mill and Liberalism, both of which, with typical contrarianism, he later disavowed.
Contrarianism. Currently, the internationalization of markets leads toward economic uncertainty (Pyhrr, Roulac, & Borne, 1999).
Solomon, in his pitiful attempts at contrarianism, does nothing but echo ruling-class opinions.
--Twitter user Jonah Goldberg (@jonahNRO) in response to "The Death of Contrarianism" (May)
Although commitment to the nonintervention principle is often characterized as pretext or mere contrarianism, (285) it has deep roots.
Millenial contrarianism: The five-factor approach to personality description 5 years later.