Most investors think that a smart contrarian play is to head in the opposite direction of the market, but the best way to outperform the herd is to head where there is no herd at all, said Ken Fisher, author of 'Beat the Crowd.' Fisher added that noise signals have increased with technology advances so investors can now use sentiment swings as a tool. He said markets can indeed stay irrational for a long time so investors should not bet themselves into a corner. In the current environment, Fisher said investors seeking to beat the crowd should favor European and emerging markets stocks because sentiment is still heavily overweighted in favor of U.S. stocks.

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