This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Quite the Contrarians

Everybody's a contrarian these days.

It was hard to find one back in 1999, the good old days of the New Economy. The term "contrarian investor" turned up just 42 times in Dow Jones Interactive articles that year. More people like the moniker now -- use of the term soared to 104 mentions in 2002. But this increasingly common usage threatens to make it as absurd a term as "alternative rock" was five years ago.

You can see why it's cool to be contrarian: Fund manager David Dreman tracked market opinions of experts going back to 1929, and found that the consensus was wrong 77% of the time.

The trick is knowing what you stand for -- or, more accurately, stand against. To be a good contrarian, as the legendary Marc Faber says, "you need to know what you are contrary about." Is it contrary to be a bear these days and think the U.S. market is headed for a Japan-style slide? Or does the contrarian think the naysayers on this latest rally are just latter-day bears still stinging from being so giddily optimistic back in 1999?


Devil's Advocates
References to contrarians and contrarian investors have soared since 1999
* Projected.
Source: Dow Jones Interactive.

Will the real contrarian please stand up? To get to the heart of things, we put the conundrum to three bona fide contrarians: Dreman, Faber and Banc of America Securities strategist Tom McManus. Not surprisingly, they contradicted each other. Nonetheless, their conclusions aren't entirely at cross-purposes -- the collective recommendations to consider Japan and Asia, steer clear of frothy U.S. tech stocks, and hunt for value in the U.S. makes a lot of sense.

Dr. Doom Contrarian: Marc Faber

To folks with a limited historical perspective on the markets -- say, five years -- Marc Faber is known as an "unrepentant bear." Not so. He is merely a contrarian, and a highly effective one. But he doesn't mind being known as "Dr. Doom" -- in fact, his useful contrarian Web site is called The Gloom, Boom and Doom Report, which details his efforts to find underappreciated investments and warn against overvalued ones.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,075.55 +131.74 0.78%
S&P 500 1,979.68 +12.11 0.62%
NASDAQ 4,450.8390 +35.3490 0.80%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs