Kenneth Fisher – billionaire, chairman of US money manager Fisher Investments, son of famed investor Philip A Fisher and inspiration for this week’s stock screen – has a nice line on what it means to be a ‘contrarian’.
In the preface to Beat the Crowd, his 11th book on markets and stockpicking, he notes that we often conflate being contrarian with doing the opposite to the herd. Although this is sometimes true, says Fisher, “opposite-doers have a herd-like mentality, too”. In other words, the crowd/anti-crowd dichotomy is false.
“Real life isn’t ‘herd versus contrarians’,” he writes. “It’s the mainstream herd, the opposite‐doing herd, and then the independent thinkers – real contrarians. They see what both herds think, then weigh all extant factors – pluses and minuses – and reach their own conclusions.”