It’s ingrained in human DNA to back the winners. Winners present the safer bet and offer investors safety and security. Contrarian investors do the opposite. When they ‘zig’, you ‘zag’. We asked Allan Gray’s Sudhir Kissun to explain this recently when we sat down:
“As contrarian investors, we actually want to be buying the stuff that's on the opposite end of the spectrum, where companies are very disliked, the so-called ‘losers’ in the industry. Because those prices often get bid to well below what their intrinsic value might be”.
Kissun went on to illustrate this strategy with a company that has faced some major headwinds that he believes should blow over, thus offering deep value today.
Contrarian investing is not for everyone, however there can be great rewards for the patient investor who embraces Allan Gray’s approach. To find out more, hit the contact button below.