Whats a contrarian to do today?
If you’re contrarian today, it’s difficult to know whether that means you should be bullish or bearish. The market has put on one hell of a spurt since the beginning of March, but many companies, including big blue chips, are still at a fraction of their former values. Quite a few financial pundits believe this is a sucker’s rally. The sheer amount of bullishness around makes contrarians nervous, whilst company profits are still generally weak, and dividends are being hammered. It wouldn’t surprise you to see a correction. The rising tide seems to have lifted all boats. So while we may all be thinking we’re superb stock-pickers, the fact is that a child with a pin in the Financial Times could probably have done as well. Knowing when to sell winners, though, is tricky. Personally, I try to follow Peter Lynch’s advice in not trying to time the markets. As he says: “If you spend 13 minutes a year on economics, you’ve wasted 10 minutes.” The fact is that no-one knows where the market is he
