When share prices fell sharply after the EU referendum, it was a reminder of how fear and panic can spread like wildfire through the stock market. In hindsight, that sudden price rout already looks like a trivial blip. Yet for many, it was a gut-wrenching moment of confusion when the outlook turned deeply uncertain. For others, though, it was a chance to pounce. It was a green light to contrarians who were fully signed up to Baron Rothschild's advice that "the time to buy is when there's blood in the streets." So what is it that separates contrarians from the stampeding masses?
On paper, contrarianism - or, going against the herd - is a simple and effective tactic in investing. But in practice, it's a discipline completely at odds with how most of us are wired up.
Following Warren Buffett's advice of being greedy when others are fearful could… Read More …