Average Reviews:
(More customer reviews)The author puts tremendous weight on using popular media headlines to gauge whether a bullish or bearish crowd has emerged and/or predominates. However, this no long works. The author himself states that determining whether the sentiment is bullish or bearish through the media has not worked after the tech bubble burst in 2001. Perhaps this is due to the incredible speed and fickle nature of print media, CNBC talking heads, and bloggers in the modern era. It's no longer slow, old-fashioned print media.
If you follow his method, you have a choice of (1) not being fully invested at the bottom of the bear market and missing an upswing (his conservative contrarian method) or (2) jumping in during sizeable pullbacks with the risk of trying to catch a falling knife and getting burned (his aggressive contrarian method). HOWEVER, the author also says that the worst mistake of the contrary investor is not being fully invested when there is a bull market, especially in the earliest stages (as the bear market turns very unexpectedly and abruptly skyrockets). This is a contradiction in philosophies. Also he even states that the "aggressive contrarian" got wiped out by this method during the Great Recession of 2008.
Overall, the author suggests some bizarre combination of momentum trading, using old fashioned market technicals, keeping your pulse on the media, and then breaking the rules you set up because they don't really work anymore.
Click Here to see more reviews about: The Art of Contrarian Trading: How to Profit from Crowd Behavior in the Financial Markets (Wiley Trading)
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