A selective contrarian investment strategy. A contrarian investment strategy is one in wchich the investor is motivated to invest by a falling stock price. Contrarian investors invest in what other investors find unattractive, thereby ensuring a low price, which will hopefully equate to huge profits once the company’s fortunes, and stock price, recover.
Just becouse a company’s stock price is in the dumps is not in itself reason enough to invest in a company. Only when the company has exceptional business economics working in its favor and a contrarian stock price.
Attractive pricing of these exceptional companies is the result of the stock market’s pessimistic shortsightedness. The company must have exceptional businesses or durable competitive advantage, this requires the investor to go against the basic human instinct to make a quick buck.
It also requires that the investor have loaded into his or her brain the software that will help determine what a company with great economics working in its favor looks like and when it is selling at an attractive price.
Stock Paper Trading 