Markets Down for The Week on Tough Talk From Fed But Bounce on Friday

“Whenever you find yourself on the side of the majority, it is time to pause and reflect.”- Mark Twain

There’s a lot of complex jargon and intimidating math associated with markets, as there should be. When someone’s managing many billions of dollars, obviously you’re going to attempt to get the A-team on it and to have as much quantitative justification as possible for the decisions that are made. At the end of the day, though, you can make money if you stay ahead of the crowd, all that complexity aside. If you do the work and find out who will benefit from inexorable trends like demographics, you can get alpha, particularly if you have the time to let compounding work for you.

What Mr. Twain eloquently said above applies especially to markets. Contrarian investing requires contrary action—action that is distinct from that of the crowd. That is rarely an easy prospect, and it rarely feels like the right move. It requires grit, determination, and confidence. If you saw or read The Big Short, please recall that most of the movie was the protagonists losing money and being chided by their investors for a foolhardy and naïve investment decision that turned out to be as startlingly prescient as it was lucrative.