Discover the Untapped INVESTING Potential of Contrarian Investing

Famous contrarian investors who became very wealthy

Let’s examine famous contrarian investors and their unique investing approaches used to make fortunes. They’ve also written best-seller books.

Warren Buffett needs no introduction, as he is often in the news. CEO and chairman of Berkshire Hathaway, Buffet, is well known for his deep value investing approach. His approach is finding undervalued companies with solid fundamentals and long-term potential. They say some companies he bought he never set foot in. He studied the company and management before deciding to buy in. This approach made him a billionaire many times over.

George Soros: Another well-known hedge fund manager and philanthropist. He’s famous for a trade he did shorting the British pound in 1992.
His approach – Soros identifies mispriced markets, taking positions against the trend. Here is a famous example.

He was skeptical of the UK’s decision to join the European exchange rate mechanism, the ERM. It was established in 1979 to stabilize the exchange rates of European currencies in preparation for adopting the EURO currency.

On “black” Wednesday, 16th September 1992, speculators forced the UK government to withdraw the pound from the ERM. This tipped the scale for the pound, and it started losing value.

He placed a $1.5 billion position to short the pound and later increased it to $10 billion. He walked away with more than $1 billion.
Five years later, in the Asian financial crisis, he placed a selling position on the Thai Baht, believing it was overvalued. It’s estimated he made about the same profit as he did with the pound.
Read more about his story here. https://www.investopedia.com/ask/answers/08/george-soros-bank-of-england.asp

Sir John Templeton was a pioneer in the global investing arena.
His approach: Founder of Templeton Growth Fund. He believed in finding distressed stocks in unpopular markets with growth potential and buying at a point of pessimism at its lowest.

Carl Icahn, the corporate raider: A fascinating and controversial Wall Street figure. He became known as a vulture capitalist. This came from taking considerable positions in public companies and then demanding extreme corporate structure leadership and management style changes. As a result, he often became the recipient of “greenmail” money. Quite a good way of getting paid!
(https://www.investopedia.com/terms/g/greenmail.asp )

His strategy mellowed from a vulture capitalist to a shareholder activist. He was lobbying for the rights of shareholders to bring positive change in a corporation.

Peter Lynch, a former fund manager of Fidelity's- Magellan Fund. He firmly believed in understanding what you own and adapting to the economic environment at the time. His fund reached an annualized return of 29.2 %, almost twice that of the S&P500. Best-selling author of “One Up on Wall Street’ and “Beating the Street.”

Bill Ackman, a hedge fund manager, Founder, and chief of Pershing Square Capital Management. The basics of his investing were like Carl Icahn. They were taking up prominent share positions in companies with the potential for significant improvement. Like Carl Icahn, Ackman became an activist investor.

Jim Rogers is an American investor known as the co-founder of the Quantum Fund with George Soros and Soros Fund management. He also created the Rogers International Commodities Index.

He achieved two extraordinary feats.

He traveled 100,000 miles around the world. He covered 16 continents on a motorcycle and later in a Mercedes with his wife, Paige Parker. Both journeys made the Guinness Book of World Records.
These trips inspired him to write a book for each journey. (he’s written a few more books).

In less than ten years, the fund he founded with Soros, the Quantum fund, returned an astonishing 4200%. He was decimating the mediocre 47% return of the S&P500.

His primary focus is on commodities, hence the index he set up and invests in gold and silver. He also focuses on a specific country, entity, or theme he believes has the potential to profit. He was very bullish on commodities and emerging markets when they were widely unpopular with investors.

David Dreman: An investor and founder of an investment company, Dreman Value Management. Author of 4 books on contrarian strategies. He wrote one called “Contrarian Investment Strategies: The Next Generation.”

His strategy is a refinement of strategies used by Sir John Templeton and Warren Buffett.
Namely, buying unpopular, undervalued stocks with low price-to-earnings ratios. And identifying companies out of favor with the public but have strong fundamentals.

Read more on his strategy here:
https://www.brokenleginvesting.com/david-dreman-ultimate-guide/#      

You can see Templeton, Buffett, and Dreman found stocks in distress with deep value in unpopular markets. With Dreman also putting emphasis on thorough research into the company’s balance sheets.