Two weeks ago in Thoughts From the Frontline, I mentioned a piece by one of my favorite contrarians and behavioral finance analysts, James Montier of Dresdner Kleinwort Wasserstein. It was going to be the Outside the Box last week, but a previous letter by Montier was sent instead.
I normally try not to use the same author two weeks in a row, but this was an exceptional letter and I wanted to bring it to my readers. James pulls together research and observations from many sources in order to prove his point and show that being a contrarian is not always the easy path to follow. I have always said that the time to own equities will be during the next recession when everyone else has given up on them, but that will also be the hardest time to buy. James helps explain why it is so hard to be contrarian and that is why it is this week's Outside the Box.
John Mauldin, Editor
Outside the Box
On The Contrary: Why It Pays To Be Different
Once a year we go through a totally pointless exercise in box ticking known as performance appraisal. As part of this internal navel gazing we receive 360° feedback on a variety of aspects of our jobs. One of the categories asks whether we "Challenge the consensus". Here is a selection of comments from responses that I have received in…