Going against human instinct and taking a contrarian approach to investing is not for everyone. It takes practice, and commitment in your convictions as well as restraint and patience. For a contrarian investor, getting 60% of your investments right is a good result. But by definition, that means getting it wrong 40% of the time.

Of all the times things haven’t worked out, the most unsuccessful investment was that in materials conglomerate Arrium, explains Simon Mawhinney, Chief Investment Officer at Allan Gray Australia. When looking at what went wrong, Simon distils it down to three core issues:

“It did have too much debt, it wasn’t generating cashflows, and it didn’t have a competitive position in some of its businesses.”

Watch the video to find out what the lessons from this investment were, and why contrarian investing is like “a graveyard for egos.”

Find a diamond in the rough

Contrarian investing is not for everyone, however there can be great rewards for the patient investor who embraces Allan Gray’s approach. For further information hit the contact button below. 

Jacob ballard

Love that you come out and state your worst investments so transparently. Very refreshing to see that from a fund manager. Good stuff.

Sebastian Correia

Great interview Simon, thanks for the sincere and transparent discussion.

James Marlay

A great explanation of the rarely discussed realities of investing.