{"id":49430,"date":"2014-04-04T20:07:42","date_gmt":"2014-04-05T00:07:42","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=49430"},"modified":"2014-04-04T20:07:42","modified_gmt":"2014-04-05T00:07:42","slug":"why-you-should-avoid-the-fake-contrarians-and-do-nothing-investors","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2014\/04\/04\/why-you-should-avoid-the-fake-contrarians-and-do-nothing-investors\/","title":{"rendered":"Why You Should Avoid the \u2018Fake Contrarians\u2019 and \u2018Do Nothing Investors\u2019"},"content":{"rendered":"

By MoneyMorning.com.au<\/u><\/a><\/p>\n

It has been a heck of a week.<\/p>\n

We can see now why we don’t organise these events more often.<\/p>\n

The World War D<\/strong><\/a> conference in Melbourne had a star-studded lineup of big thinking contrarian investment<\/strong> experts.<\/p>\n

Also on show were our own band of investment pros, such as Greg Canavan, Sam Volkering and Vern Gowdie. And of course, yours truly was there too, giving big government a well-deserved poke in the eye.<\/p>\n

Not everyone liked our presentation. One gentleman scored us a two out of 10. We received the lowest score at the After America conference two years ago too. We’ll start to get a complex at this rate.<\/p>\n

Was it really that bad? No. But we get why he gave your editor a rock-bottom score…<\/p>\n

In total, the show was a resounding success.<\/p>\n

How often do you get to see the likes of Dr Marc Faber, Jim Rickards, Richard Duncan and Satyajit Das on the same stage?<\/p>\n

Not often.<\/p>\n

Every conference organiser in Australia would give their right arm to secure a line-up like that.<\/p>\n

Conference goers got to hear from the keynote speakers their views on where the global economy is heading next. It wasn’t always the most uplifting of subjects. That’s why some people can’t bear to hear about the doom and gloomy stuff.<\/p>\n

But that wasn’t why one attendee scored our presentation so low. In fact, it was for precisely the opposite reason — we were too bullish for his liking.<\/p>\n

\n

Not everyone wants stocks to go up<\/strong><\/h2>\n<\/p>\n

There’s no doubt that your editors presentation was the most bullish and optimistic on the direction of the Australian and world stock markets<\/a>.<\/p>\n

We even revealed to attendees at the exclusive Alliance* cocktail party that we were actively looking to recruit an analyst to explore one of the most exciting and beaten-down sectors in the world economy — emerging markets<\/a>.<\/p>\n

(* The Port Phillip Publishing Alliance is an exclusive membership option that entitles members to receive all of Port Phillip Publishing’s current and future investment research — except trading services — for life with the payment of a one-off joining fee. The Alliance program is currently closed to new memberships.)<\/p>\n

That’s bullish. We certainly laid ourself open to criticism for daring to talk about a rising Australian stock market<\/a> when most of the other presentations were pointing the other way.<\/p>\n

But as we noted in our presentation, that’s the key to being a good contrarian investor. You have to be prepared to buck the trend. Or as resources and military technology<\/a> expert Byron King noted during his presentation, it pays to go after the most ‘hated’ stocks on the market.<\/p>\n

Out of interest, he says that junior resources stocks<\/a> are among the most hated stocks right now. It’s hard to argue with him on that point.<\/p>\n

For many people, going to a conference like World War D isn’t about learning something new, it’s about hearing confirmation of what you already know.<\/p>\n

The term for that is ‘confirmation bias.’<\/p>\n

In other words, if you have a bullish tendency then you’re more likely to approve of speakers who are bullish. If you have a bearish tendency then you’re more likely to approve of speakers who are bearish.<\/p>\n

That’s our take on the negative feedback to our presentation. The gentleman didn’t approve of our view that the Australian stock market<\/a> was heading towards 15,000 points…a move that would see the index triple from its current level.<\/p>\n

He also probably didn’t like the way we took a swipe at so-called contrarian investors.<\/a> We called them ‘fake contrarians’ and ‘do nothing investors’.<\/p>\n

Our point was that being a contrarian investor wasn’t all about taking a bearish view of the markets, buying gold<\/a>, and grumbling about central bank money printing.<\/p>\n

Real contrarian investing involves anticipating a future market move before other investors catch on. That means buying ‘hated’ stocks<\/a> now before others get the same idea.<\/p>\n

\n

Bias or opportunity?<\/strong><\/h2>\n<\/p>\n

The truth is that anyone on the bullish side would have struggled to achieve any confirmation bias as most of the presentations were on the negative side — except your editor’s of course.<\/p>\n

But that’s good news for real contrarian investors<\/a>. The last thing you want to hear at this sort of event is that everything is fine and dandy with the world.<\/p>\n

As a contrarian, you want to hear that things are bad, and could get worse.<\/p>\n

The only time a real contrarian should panic is when the big bearish investors finally give up and decide to join the bulls. That’s when real contrarian investors should look to sell stocks.<\/p>\n

But that time doesn’t look like happening anytime soon. The bearish analysis was about as doom-laden as we’ve ever seen it. And that’s not a criticism. We get their concern.<\/p>\n

The world economy<\/a> is in a terrible shape. Central bank money printing has only covered up the problems. It most certainly hasn’t fixed anything. And yet, despite it all, as we pointed out in our presentation (and doubtless to the annoyance of the gentleman who scored us two out of 10), the stock market has continued to go up over the past six years.<\/p>\n

In fact this week the US S&P 500 index took out another high.<\/p>\n

So, maybe we’re guilty of ‘confirmation bias’ too. Perhaps everyone is. You see in the markets what you want to see, and then you invest accordingly.<\/p>\n

But one thing is for sure. Whatever your view of the markets, whether you’re bearish or bullish, there’s no doubt that the World War D conference was the best investment show in Australia this year.<\/p>\n

If you were there, we hope you enjoyed it. If you couldn’t make it, you can put your name down to snap up a video recording of the event here<\/a>.<\/p>\n

Cheers,
\nKris<\/strong>+<\/a><\/strong><\/p>\n

PS:<\/strong> <\/strong>Next week Sam Volkering’s Tech Insider<\/em> will have exclusive coverage of digital expert and author of Brave New War<\/em> John Robb’s speech at WWD – where he revealed how to decrease your ‘wealth burn rate’ by tapping into a new online asset trend…you can sign up to Tech Insider here<\/a>.<\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au It has been a heck of a week. We can see now why we don’t organise these events more often. The World War D conference in Melbourne had a star-studded lineup of big thinking contrarian investment experts. Also on show were our own band of investment pros, such as Greg Canavan, Sam Volkering … <\/p>\n

Continue reading “Why You Should Avoid the \u2018Fake Contrarians\u2019 and \u2018Do Nothing Investors\u2019”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-49430","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/49430","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=49430"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/49430\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=49430"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=49430"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=49430"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}