I am certain this topic will come up many times in the upcoming months as I and others are noticing a shift in market structure/mechanics. For the record, I am not calling for the end of the world. I do not know what it means yet. I just know that something is changing and people are starting to vote with thier dollars in a different way. When I have a better idea you will be the first to know.
I am putting the finishing touches on an e-book about behavior finance. The plan is that you get the e-book and give a book (easy to through amazon). If you know of any charities that accept books please leave a comment. I am not a psychologist and many of the definitions are new to me. However, the feelings and the actions that proceeded them are not. All definition are ripped from wikipedia. You can follow the links and decide what it means to you. That is the point, make the definition yours.
All that is off topic. What is the difference between a contrarian and an idiot? The term that I have found that best describe the need to be different is reactance.
Reactance – the urge to do the opposite of what someone wants you to do out of a need to resist a perceived attempt to constrain your freedom of choice.
Being a contrarian can be a very profitable point of view. What is the difference between a contrarian and an idiot? A contrarian’s reward is educational and monetary. The idiot’s reward is psychological. A contrarian makes his decision based on a set of principles, rules. A contrarian does not mind being alone but eventually he needs others around him to survive. An idiot cannot stand people with his same view. An idiot measures his success on the amount of time he is alone. A contrarian uses that time as a measurement of the size of the bubble. The idiot tells anyone how right he was and the contrarian looks for the next trade.
The goal of a contrarian and his counterpart, the idiot are different, so are the results. Like all of the pyschological rewards it feels really good but most stores don’t accept feelings as payment.
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