Updated: March 2, 2017
Let’s face it: people make a lot of stupid mistakes.
You see it every day: they turn on to the freeway without signaling. They fall for obvious scams. They throw money away on useless things.
But here’s the good news: It’s possible—even easy—for savvy investors to profit from humanity’s lousy judgment.
How? By being a contrarian.
Contrarian investing means heading away from the crowds: buying heavily when everyone is fleeing in fear and selling when everyone says the asset is a sure thing. (I’ll show you 2 unloved funds ready to pop—plus 2 overbought names ready for a fall—in just a moment.)
Contrarian investors bet big against housing in 2007–08, like hedge fund mogul Michael Bury, who became famous thanks to the film The Big Short. …