Investment style: Going Against the Grain

Investment style

February 12, 2023

Investing is a complex and multifaceted field, with various methods and strategies to choose from. Among the popular approaches are mass psychology and contrarian investing, which are based on completely opposing philosophies. In this article, we will delve deeper into both methods and analyse the core differences between them.

Mass psychology investing is a style of investing that takes into consideration the emotional and psychological state of the masses. This approach is based on the notion that market movements are driven largely by the masses’ emotions and collective behaviour, and that these emotions can be used to forecast market trends. Investors who follow this style will often wait for a peak of panic or euphoria before making a move, either buying when prices are low or selling when prices are high. This approach has been utilised extensively by individuals such as Sol Palha, William J. O’Neil, etc who have written extensively on the topic.

Contrarian investing, on the other hand, is an investment style that entails going against the flow and taking positions that are contrary to those of the masses. This approach is founded on the belief that the masses are frequently wrong, and it is possible to profit by taking positions that are opposite to their beliefs. Contrarian investors often enter positions early, before the masses have fully embraced a particular market, and they are willing to hold these positions even as the market moves against them. Prominent investors like Warren Buffett and Benjamin Graham, who have shown that a contrarian approach to investing can lead to long-term success, have popularized this investment style.

So, what distinguishes mass psychology and contrarian investing? The key difference lies in the fact that mass psychology investing is based on the masses’ emotions, while contrarian investing is based on taking a position opposite to the masses. Another critical difference is that mass psychology investors often wait for a boiling point of panic or euphoria before making a move, while contrarian investors enter positions early and are willing to hold them even as the market moves against them.

In conclusion, both mass psychology and contrarian investing are valid investment styles, and both have proven effective in specific market conditions. However, it’s crucial to remember that no single investment style is always the best, and the ideal investment style will depend on several factors, including your personal investment style and current market conditions. If you are thinking about adopting one of these styles, it’s essential to do your due diligence and seek the advice of a seasoned investment professional. Remember, your investment style should align with your goals, risk tolerance, and personality.


These articles provide a comprehensive overview of Mass Psychology and Contrarian investing, explaining the key differences between the two approaches and the pros and cons of each. Additionally, they provide examples of how these approaches are applied in the real world and offer insights into how you can use these strategies to achieve your investment goals.

Mass Psychology in Investing” by Richard Smitten

Mass Psychology; the missing ingredient to Financial Success by Sol Palha:

Contrarian Investing: The Pros and Cons by Haris Anwar

Contrarian Investing: What It Is and How to Do It by Nicholas Rossolillo

The Psychology of Mass Movements in Investing by Daniel Cross

Contrarian Investing: Capitalizing on Fear and Greed by Billy Duberstein

O’Neil, William J. “How to Make Money in Stocks: A Winning System in Good Times or Bad.” McGraw-Hill Education, 2009.

Buffett, Warren E. “The Essays of Warren Buffett: Lessons for Corporate America.” Council Oak Books, 2008.

Graham, Benjamin. “The Intelligent Investor.” HarperBusiness Essentials, 2006.


Other Articles of Interest

Delving Deeper: Exploring the Question – What Is Inflation?

What is Inflation? Unveiling Effects and Strategies for Mastery

 Decoding Inflation: Unraveling the Complex Effects Aug 25, 2023 Inflation, which refers to the general increase in prices and fall ...
Investor Sentiment Data Manipulation

Investor Sentiment Data Manipulation: Unveiling Intriguing Insights

Unveiling the Impact: Exploring Investor Sentiment Data Manipulation Aug 12, 2023 The significant manipulation of sentiment data has serious long-term ...
"Stock Buybacks Unmasked: Unraveling the Adverse Consequences

Stock Buybacks: Exploring Their Detrimental Effects

Unveiling the Downsides: Dissecting the Negative Impacts of Stock Buybacks Updated Aug 8 2023 We will delve into history to ...
Is US Dollar soaring?

US Dollar Rally: Is it Ready to Rumble?

US Dollar Rally: Riding the Wave of Resurgence Updated Aug 02, 2023 The weekly chart (below) shows a positive divergence ...
strategy in investing

Investment Pyramid: A Paradigm of Value or Risky Hail Mary?

What is an investment pyramid? Updated July 2023 An investment pyramid, also known as a risk pyramid, serves as a ...
Learn How to Trade Options: Unlock the Secrets of Financial Freedom!

Unlock the Secrets: Learn How to Trade Options like a Pro!

Learn How to Trade Options: A Step-by-Step Guide to Maximizing Profits July 2023 Before we delve into the effective strategies ...
Psychological Manipulation Techniques; The art of brainwashing

Psychological Manipulation Techniques: Directed Perception

Deceptive Tactics: Psychological Manipulation Techniques Updated June 18, 2023  Everything you process is based on Perception & perception is based ...
Tomorrow's Stock Market Prediction: silly and dumb idea

Tomorrow’s Stock Market Prediction: A Silly Pursuit?

Tomorrow's Stock Market Prediction: A Silly Endeavor or Precise Insight? July 26, 2023 Before delving into the "Tomorrow's Stock Market ...
When is the Best Time to Buy Stocks: when the market crashes

When is the Best Time to Buy Stocks: Key Insights

When is the Best Time to Buy Stocks: Essential Tips July 22, 2023 The optimal moment to invest in stocks ...
The Stock Market Forecast for Next 3 months: its better than you think

Stock Market Forecast For Next 3 months: Buckle Up

Unravelling the Secrets of Stock Market Success Updated August 1,  2023 Before attempting to predict the stock market's direction for ...
Unveiling Mass Psychology: The Essential Element for Sustainable Triumph

Mass Psychology & Financial Success: An Overlooked Connection

An Introduction to Mass Psychology: Understanding Group Behavior? Updated July 15, 2023 Mass psychology is a branch of social psychology ...
Stock Market Crash 2023: Plans and course of action

Stock Market Crash 2023: Navigating the Turbulence Ahead

Stock Market Crash 2023: Navigating the Risks and Opportunities July 10, 2023 The MOAB  (mother of all buys) signal has ...
The Level Of Investment In Markets Often Indicates the Financial Pulse

The Level Of Investment In Markets Indicates Fear Or Joy

Editor: Vladimir Bajic | Tactical Investor The level of investment in markets often indicates Panic or? Updated July 2023 The ...
right side of trend

Winning with Nasdaq 100 ETF: Riding the Right Side of the Trend

Unlocking the Potential of the Nasdaq 100 ETF: A Comprehensive Guide July 7, 2023 It is crucial to bear in ...
Sentiment investing

Investor Sentiment Survey Defies Stock Market Crash Outlook

 Investor Sentiment Survey Challenges Stock Market Crash Predictions Updated July 2023 Let's take a fascinating journey through history to explore ...