Quite the Contrarians

McManus remains bullish. While he says there is no consensus on the market these days, he sees three groups on investors: "Outright bulls, outright bears and those who think we are in a trading range." Because the range-bound folks think we have hit the peak of the trading range on the S&P 500 when it briefly closed about 1000, he says two of the three groups root against further gains -- making bulls like him contrarians.

He cautions, however, that he isn't extraordinarily bullish -- "we're not going to make all-time highs on the S&P 500 anytime soon." Companies like Nortel(NT Quote), JDS Uniphase(JDSU Quote) and Broadcom(BRCM Quote) have lost billions of dollars in market capitalization. "We're still down about $4 trillion in market cap. If it doesn't come back in these companies" -- which doesn't look likely -- "we have to look at the rest of the S&P 500 and realize it's going to take time," McManus says.

While expecting 15% stock market returns when long-term rates are at 5% is folly, McManus thinks stocks should deliver 9% to 10% on average, "and you can do better than that if you're contrarian -- buy more stock when people are downbeat and lighten up when people are optimistic."

McManus anticipates broad-based gains, meaning investors don't need to spend a great deal of time fretting about which sectors or stocks will post the biggest gains. But he did mention his firm's 10 First Money Focus stocks as potential winners. Among the companies on the list are Boeing(BA Quote), Carnival Cruise(CCL Quote), Clorox(CLX Quote), Comcast(CMCSA Quote) and Taiwan Semiconductor(TSM Quote).

Deep Value Contrarian: David Dreman

Dreman, skipper of value-oriented (KDHCX Quote)Scudder Dreman High Return Equity fund, isn't a Johnny-come-lately among contrarians: His Contrarian Investing Strategies is a great book on the subject. While more folks lay claim to the contrarian title these days, for Dreman contrarian investing is still just another term for deep value investing.