AuthorZeb Pilcher |
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Week 105/16/2021 For week 10 I read chapters 8 and 9 of The Art of Invest Lessons from History's Greatest Teachers by; John Longo. Chapter 8 was all about buying global stocks. I listened to his chapter but I didn't take any notes on it because the basics don't require me to learn about foreign trading. As a I continue to invest and learn I might read more into it but right now it isn't a priority. Chapter 9 focus on the stock trader David Derman who was a contrarian. A contrarian is someone who goes against the crowd most of the time. Stock prices are based on the herd and who is buying them along with the fear and greed of those people. If the heard is fearful of a stock they sell off and the stock goes down. If the herd is optimistic they buy the stock making it go up. David Derman knew this and he exploited it in his favor. He would buy stocks that had dropped off in hopes that they would soon be bought back. This is a hard way of investing because it is much easier to be wrong with a thousand people than to be wrong alone. Contrarian investing is also a form of value investing which is buy low and sell high. David Derman is a very successful investor and at one point was managing 22.2 billion dollars.
The images below show the contrarian style of investing. Crowd vrs. Singular.
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