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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 ?
"Pero alam mo, iyong mga contrarian naman ay sila din iyong mga tumatakbo na pagka-senador; halos marami sa kanila ay tumatakbong senador sa oposisyon [But you know, these contrarians are also running for senator.
"To each fake campaign of the 'compulsive contrarians' over a period of time, ultimately the truth has prevailed.
Every stakeholder in the market was in agreement with the Government position but the Contrarians deflected the credit and liquidity issue to the issue of autonomy.
To be the smart money, Hsu said, "Be the contrarian! Hold onto managers people are firing, and redeem from managers people love" to gain that 2% return gap that Research Affiliates' research shows fundamental indexing can deliver.
In 2004, a contrarian investor might have invested in a precious metals mutual fund.
The trend of contrarian news certainly started on May 10 when Zachs Investment Research sent out a bulletin saying that A.H.
The solar sunspot cycle was a popular choice for solar-driven global warming among many climate change contrarians over a decade ago.
They occupied a middle moral ground between the clerical political economists and the contrarians. They agreed with the academics on the utilitarian beneficence of antebellum capitalism.
Yet Hitchens's subject is also larger than both himself and Orwell; at the center of the book is Hitchens's discussion of his intellectual vocation as the eternal drag, the naysayer, the critic - in short, the contrarian. Why Orwell Matters is something of a Letters to a Young Contrarian, Part Two -- a guide to what it means to be a permanent dissenter as seen through the prism of George Orwell's life.
So what kind of strategies do the contrarian investors adopt and how successful are they?
If so, you may be a contrarian investor, points out Joseph P.
New Delhi [India], Jan 17 ( ANI ): Union Finance Minister Arun Jaitley on Thursday took a dig at the Opposition saying that a new class of Compulsive Contrarians, including the Left and dynastic politicians, has emerged to create perpetual propaganda against the Prime Minister Narendra Modi-led government at the Centre.