Paul Kedrosky reminds us in an interesting post that far more people are ‘contrarian’ these days than most contrarians might imagine. Everyone wants to be smarter than the government, smarter than corporations, smarter than science, smarter than the market, smarter than whomever.
Thus it’s important to differentiate between true contrarianism which questions the commonly held beliefs of the public, and naive contrarianism, which is more of just a knee-jerk reaction.
When it comes to markets in particular, another point to consider is that contrarianism can take on any market view — at the right time. Thus while bears may be contrarian during one period, they could suddenly become consensus during the next. And vice-versa.
Infectious Greed: Why is contrarianism so appealing? It is appealing – and growing immensely in popularity – because it has so much smart-guy frisson. This naive contrarianism lets you pose outside the system, meanwhile keeping good company like Warren Buffett, John Paulson, the Freakonomics fellows, and oodles of self-declared fellow travellers, most of whom almost certainly aren’t doing what they say they are.
Contrarianism also appeals to our increasingly cynical nature. It is the superficial idea that most people are wrong about everything, especially if they are in government, on TV, among the putative intelligentsia, etc. They think that? Ha, I’ll take the other side, etc.
I was reminded of all of this earlier today in reading a piece in NY Magazine about the past decade’s burgeoning business of writing contrarian books & articles.
Easy and naive contrarianism about everything has become the new consensus – and that is a kind of bigoted and dumb consensus around which I’m happy to go the other way.
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