contrarian

noun

con·trar·i·an | \kən-ˈtrer-ē-ən,

kän-\

Definition of contrarian

: a person who takes a contrary position or attitude specifically : an investor who buys shares of stock when most others are selling and sells when others are buying

Other Words from contrarian Did You Know? Example Sentences Learn More about contrarian

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Did You Know?

Anyone who thinks that most of what the public believes is wrong would be called a contrarian. And contrarian is a basic term in the vocabulary of investing. In fact, most successful investors often behave like contrarians by "buying low and selling high"—that is, buying stocks that are cheap because most investors put a low value on them but that have the possibility of rising, and selling stocks that most investors are valuing highly but that seem likely to decline. The word may be most common as an adjective; so you may express a contrarian opinion, hold a contrarian view, or pursue a contrarian investment strategy.

Examples of contrarian in a Sentence

As an investor, he's a contrarian, preferring to buy stocks when most people are selling.

Recent Examples on the Web

Another group had 20 members and five contrarians—and that one extra person made all the difference. — David Noonan, Scientific American, "The 25% Revolution—How Big Does a Minority Have to Be to Reshape Society?," 8 June 2018 While Justify is the overwhelming favorite, some contrarians are pointing to a foot bruise Justify suffered during the Kentucky Derby as a reason to look elsewhere for a winner. — Jason Frakes, The Courier-Journal, "Bob Baffert 'not really worried' about Justify on muddy Preakness track," 18 May 2018 Andrew Derocher, a biology professor at the University of Alberta who has studied polar bears for more than 30 years and was not involved in the paper, said in his view, the contrarians were completely missing the big picture. — Erica Goode, New York Times, "Climate Change Denialists Say Polar Bears Are Fine. Scientists Are Pushing Back.," 10 Apr. 2018 Andrew Derocher, a biology professor at the University of Alberta who has studied polar bears for 20 years and was not involved in the paper, said in his view, the contrarians were completely missing the big picture. — Author: Erica Goode, Anchorage Daily News, "Climate skeptics say polar bears are fine. Scientists beg to differ.," 10 Apr. 2018 Of course, there are some contrarians to the female COO set. — NBC News, "Are women COOs facing a new kind of glass ceiling?," 30 Mar. 2018 Some contrarians will argue that most people don’t need life insurance because most people don’t die before their life expectancy. — WSJ, "Do Most People Need Life Insurance?," 18 Mar. 2018 Immediately, the liberal contrarians at The New Republic cried plagiarism. — Newsweek, "Analysis," 14 Mar. 2018 Mark Ein, the venture capitalist who recently bought Washington City Paper, could never be confused for the counterculture contrarians who often patronize alternative news weeklies. — Paul Schwartzman, Washington Post, "A tennis team, mansions and now an alt-newsweekly: A tycoon’s new project," 30 Jan. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'contrarian.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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The first known use of contrarian was in 1954

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More Definitions for contrarian

contrarian

noun

Financial Definition of contrarian

What It Is

A contrarian is an investor that attempts to profit by deviating from conventional wisdom or "the herd."

How It Works

Generally, the basic premise behind contrarian investment methods is that the market or "crowd" tends to overreact to information in the short-term, which causes price increases and decreases to be overdone and allows savvy investors to profit.

Contrarians zig when everyone else zags. They tend to buy when everyone else is selling, sell when everyone else is buying. The result is that the contrarian often buys a cheap security that everyone else is calling a dog and sells a security that everyone else is clamoring to get into. Contrarians often look for stocks with low price-to-earnings ratios. In fact, there is little difference between value investing and many forms contrarian investing.

The Dogs of the Dow popular contrarian strategy whereby investors purchase the highest-yielding stocks in the Dow Jones Industrial Average (DJIA). Remember, a stock has to pay a relatively high dividend and have a relatively depressed stock price to have a high dividend yield. When any of the investor's stocks rise in price so much that they are no longer in the top ten, he/she sells them, capturing the gain.

Why It Matters

It is important to note that contrarian investing often works best for investors who have thoroughly analyzed the fundamentals of the companies they invest in. Companies with solid management teams, innovative products, efficient processes, and good profit margins can often weather periods of unpopularity.

Source: Investing Answers

contrarian

noun