InvestorQ : What is this contrarian approach to investing all about?
manisha Kolvenkar made post

What is this contrarian approach to investing all about?

vidhya Laxmi answered.
3 years ago

When can you a contrarian. Can you be a contrarian irrespective of the level of the market? To be fair, a contrarian approach is somewhat dependent on the level of the market. When there is carnage in the market, all stocks irrespective of their pedigree correct. However, the beauty of a contrarian approach is that it can work even when the overall market is not in the midst of a bull market. Take the examples of how an Escorts or a TVS Motors performed between 2012 and 2017. The results have been absolutely stunning. While Escorts is up nearly 10 times, TVS Motors is up nearly 15 times during the same period. It would have been impossible to buy these stocks without a contrarian approach, as the tractor and two-wheelers sectors have hardly performed during these five years. Contrarian approach works best when you get the stock around the tipping point. Buying Infosys in 1995 would have entailed a long wait or buying Eicher in 2001 would have also entailed a long wait.