• Home
  • Courses
    • Share Market
      • One To One Mentorship
      • Chartered Stock Trading Expert
      • Technical Analysis Course
      • Advance Derivatives Course
      • Fundamental Analysis Course
      • Options Trading Course
      • Stock Market Astrology
      • Algo Trading Course
      • Diploma in Stock Trading
      • Commodity Trading Course
      • Currency Trading Course
      • Arbitrage Trading Course
    • Career Oriented
      • Chartered Financial Market Expert- FMX
      • NISM Certifications Training
      • Mutual Fund Certification
      • Certified Financial Planner – CFP
      • Diploma in Banking & Finance
    • Wealth Management
      • BASIC
  • Online Courses
    • Technical Analysis Course Full
    • Professional Trading Setups
    • Candlestick Bible Course
  • About Us
    • Know Your Mentors
    • Group Company
  • Investors Education
    • SEBI / NISM Free Educational Material
    • Financial Abundance
    • Free Financial Literacy Seminar
    • Important Links
  • Trading School
    • Live Stock Selection Sheet
    • Options Trading School
    • Trading Tools Kit
  • Training Partner
    • Training Partner Form
    • Franchise
  • Placement
  • Contact
  • Blog
  • +91 8920620024
  • (+91) 8168573253
  • (+91) 9310231337
  • [email protected]
  • Online Class
Facebook Twitter Linkedin Instagram Youtube
Free Demo
ISFM
  • Home
  • Courses
    • Share Market
      • One To One Mentorship
      • Chartered Stock Trading Expert
      • Technical Analysis Course
      • Advance Derivatives Course
      • Fundamental Analysis Course
      • Options Trading Course
      • Stock Market Astrology
      • Algo Trading Course
      • Diploma in Stock Trading
      • Commodity Trading Course
      • Currency Trading Course
      • Arbitrage Trading Course
    • Career Oriented
      • Chartered Financial Market Expert- FMX
      • NISM Certifications Training
      • Mutual Fund Certification
      • Certified Financial Planner – CFP
      • Diploma in Banking & Finance
    • Wealth Management
      • BASIC
  • Online Courses
    • Technical Analysis Course Full
    • Professional Trading Setups
    • Candlestick Bible Course
  • About Us
    • Know Your Mentors
    • Group Company
  • Investors Education
    • SEBI / NISM Free Educational Material
    • Financial Abundance
    • Free Financial Literacy Seminar
    • Important Links
  • Trading School
    • Live Stock Selection Sheet
    • Options Trading School
    • Trading Tools Kit
  • Training Partner
    • Training Partner Form
    • Franchise
  • Placement
  • Contact
  • Blog

    Blog

    • Home
    • Blog
    • Blog
    • What is contrarian investing not for weak heart people

    What is contrarian investing not for weak heart people

    • Posted by Mr. Sushil Alewa
    • Categories Blog, Stock Market
    • Date October 20, 2022
    • Comments 0 comment

    Contrarian investing is as old phenomenon as  investing itself. It is one of the most revered investing philosophies and somewhat over laps with the value investing philosophy.

    Contrarian investors, like value investors, attempt to identify investing opportunities that are not on the investment radar of majority of investors. The contrarian investors are always looking for financially solid companies that are temporarily out of favour in the market and are priced low when compared to their earnings. Contrarian investor is an independent thinker and chooses not to follow the crowd. A true contrarian defines value differently and believes that the real “value” is at the extreme – low P/E, low P/B, low P/CFand high dividend yields. A contrarian investor has to show patience as his contrarian bet may take ages to fructify. It is observed that value stocks remain undervalued for extended periods oftime and this is because the market maynot recognize the intrinsic value of the undervalued securities for years together. When a contrarian investor takes a bet on a value stock that is out of favour in the market it is almost impossible to predict when the stock or the sector will start recovering and catch investors’ attention. It is safe to say that any contrarian investors need to have an  investment horizon of more than three years at least.

    What are the key benefits of contrarian investing ?

    The key benefits of contrarian investingare buying stocks whose risk is low, sinceit is already perceived by the crowd as underperformer. The crash of 2008 is a classic example. when majority were selling shares from their portfolios and fleeing to the perceived safety of cash, while for contrarian investors, it created incredible buying opportunities. Now, with the internet age where market news moves in sub-seconds, any big newsflash that traders think will help in moving the stock has already been factored. The market has repriced before it gets past the specialist wires.

    What are the risks in contrarian investing?

    The risk of contrarian investing is loss of capital. However, as we said, to safeguard that, investors need to apply stock screening model and not just buy any random down-on-luck stocks or penny stocks. We have seen many stocks that failed to provide any returns even after market reaching all-time high. Some of the stocks that can be identified for contrarian investing are identifying companies with solid brands and good cash flows that are suffering a temporary economic setback and would benefitfrom a recapitalization and management change.

    Why contrarian investor earn better returns?

    The stock market has a way of consistently overvaluing prospects of highly regarded companies and just as consistently undervaluing those that appear to have lacklustreoutlook.History indicates that in a great majority of cases, there has been a resurgence of earning power, followed by renewed enthusiasm and higher market prices for such out-of-favour stocks.

    CONCLUSION :-

    Contrarian investing is not for a part-timer, nor is it for an investor who understands equity markets superficially. Any investor who can diagnose the market trends, can think independently and is willing to wait for years together to see his or her investment grow can dabble with contrarian investing style.

    To go against the crowd can be rewarding once the outcome is positive. If the markets do not behave the way contrarian investor anticipated, the amount of loss can be huge. Hence, contrarian investing is not for the light-hearted investor. For retail investors, seeking an expert’s advice is highly recommended before adopting the contrarian investing style. One of the smarter moves could be choosing to invest in mutual fund that adopts contrarian investing philosophy. If one takes a portfolio approach, not more than 10 to 15 per cent of one’s portfolio should be dedicated to the contrarian investing philosophy at the best.

    Mr. Sushil Alewa

    Mr. Sushil Alewa (SEBI Registered Research Analyst, MBA, CFP ) having 12 year work experience in Trading, Training, and consultancy in the area of Securities / Financial Market mainly Investment management
    industry, Technical Analysis of Stock Market.
    He is Empanelled as 'Certified Trainer of Financial Education with SEBI & IICA - MCA (Securities & Exchange Board of India), the regulating authority, Govt. of India for the securities market; Involved in conducting workshops on 'Financial Literacy to various groups such as students, company executives, middle-income groups etc. Have individually conducted more than 1600+ Investor Awareness workshops on financial literacy in the last 10 years, with reputed Universities, management colleges, corporate houses and top schools.

    Previous post

    How to complaint a Stock Broker in Stock Market?
    October 20, 2022

    Next post

    How to be Mutual Fund Agent? Why to be a Mutual Fund Agent?
    October 20, 2022

    You may also like

    Mohnish Pabrai net worth 2024,
    Mohnish Pabrai Net Worth 2024: A Deep Dive into His Investment Journey & Wealth
    11 April, 2025
    Ramdeo Agarwal net worth
    Ramdeo Agarwal Net Worth: Career, Investments, Books & Philanthropy
    10 April, 2025
    rakesh jhunjhunwala net worth 2024
    Rakesh Jhunjhunwala Net Worth 2024: India’s Big Bull and His Lasting Legacy
    10 April, 2025

    Leave A Reply Cancel reply

    Your email address will not be published. Required fields are marked *

    Popular Courses

    Diploma in Stock Trading

    Diploma in Stock Trading

    ₹60,000.00 ₹40,000.00
    Chartered Stock Trading Expert

    Chartered Stock Trading Expert

    ₹60,000.00 ₹50,000.00
    Chartered Financial Market Expert- FMX

    Chartered Financial Market Expert- FMX

    ₹80,000.00 ₹60,000.00

    Latest Posts

    impact of Union Budget on the Stock Market
    Impact of the Union Budget 2024 on the Stock Market: Key Highlights
    23Jul2024
    impact of Union Budget on the Stock Market
    ISFM – Best Stock Market Training School – Gurgaon is looking for Trainer Empanelment at pan India level
    04Feb2023
    Pre Budget Rally Stocks
    Pre Budget Rally Stocks 2021
    20Oct2022

    Subscribe our Newsletter

    About ISFM

    ISFM has become a center for excellence of  stock market training in Gurgaon, Delhi / NCR. We have a very well designed 6 stage wise courses on securities market which covers from Equity, Derivatives, Commodity, Currency, Mutual Funds and Technical Analysis. 

    Company
    • Blog
    • About Us
    • Contact
    • Become a Trainer
    Quick Links
    • All Courses
    • Option Trading School
    • Free Literacy Workshop
    • Study Material
    • Other Links International
    • Other Links Local
    Edit widget and choose a menu
    Contact Us
    • 0124-2200689
    • (+91) 8168573253
    • (+91) 9310231337
    • (+91) 7015237224
    • Email: [email protected]
    Recent Post
    Mohnish Pabrai net worth 2024,

    Mohnish Pabrai Net Worth 2024: A Deep Dive into His Investment Journey & Wealth

    April 11, 2025

    ISFM PVT. LTD © 2025. All Rights Reserved.

    WhatsApp us