How to Find Contrarians on the Web
by Cara Scatizzi
Contrarians dont typically search for like-thinking investors. But there are a number of Web sites that offer a common meeting ground for contrarians, as well as useful information and education on the contrarian approach to investing.
A contrarian investor makes investment decisions contrary to prevailing beliefs—for example, buying when most other investors are pessimistic and selling when most others are optimistic. Contrarian investing tends to emphasize out-of-favor securities that are selling at low price multiples to some measure of value, such as low price-earnings or price-to-sales ratios. Some of the most famous contrarian investors include Benjamin Graham, Warren Buffett and David Dreman.
The sites listed below offer advice and educational information about contrarian investing, with either all or a portion of their information free to registered users.
Contrarian Investing Association
The Contrarian Investing Associations Web site is an independent network of contrarian investors who all participate in the upkeep and freshness of the site. Members are encouraged to post commentary and articles they find interesting as well as discuss their current stock holdings and those they are considering for future purchase. Basic membership is free with registration.
The site outlines four contrarian strategies. Each strategy is explained in detail, with supporting historical data shown. The strategy section also includes market entry and exit tips.
The site also allows members to post their own stock tips and ideas as well as read others suggestions. Members can discuss these ideas with each other via a message board. Lists of articles posted by other members can be accessed as well as a monthly update with commentary, market news and an article of the month.
Money magazine has called Bearmarketcentral.com one of its favorite cranky contrarian Web sites. The site is devoted to bear-market-minded investors and supports a contrarian investing style. Periodically, an updated commentary is posted on the home page that discusses the current market in relation to the bear market philosophy. Archived commentaries are available as well.
The sites Hair of the Bear forum allows registered users to post questions and comments and have discussions about topics such as the market, bear funds, short selling and the economy. Registration is free. The sites Bear Cub section offers a free financial education center presented by Online Trading Academy that is geared toward individual investors of all skill and knowledge levels. Links to useful Web sites and answers to commonly asked bearish investing questions are given as well. The site also offers links to bearish and contrarian investing articles and commentary, free quotes and charts, and related books. The Fotley Mule offers daily jokes and cartoons poking fun at contrarian and bearish investors.
Contra the Heard
Contra the Heard calls itself an information service for independent individual investors. The sites creators are Benj Gallander and Ben Stadelmann, who write columns for various publications and appear as financial guests on various TV shows. The site gives their stock-picking philosophy. Commentaries from January 2000 and year-in-review articles since 1997 are available for free on the site. An investing glossary and a list of related links are also given.
Similar to Bearmarketcentral.com, the PrudentBear advocates a contrarian style of investing. The site offers up-to-date market commentary and news as well as articles, presentations and arguments for a current bear market. Every other day, a guest commentator writes their opinion on the current market and how bearish investors can make profitable decisions. There is also a link to current statistics on the S&P 500, the Russell 2000 index and Amex sector indexes including pharmaceuticals, gold, and oil.
The Bear Case section offers a slideshow presentation called A Bear Tour, which explains why investors should take a long-term bearish stance on the market. Other presentations include: Is the Dollar at Risk? and The Case for a Secular Bear Market. The site also has a mutual fund section that shows performance data and other information on mutual funds in the Prudent Bear family.
Access to the site is free.
by Cara Scatizzi, associate financial analyst at AAII