Warren Buffett’s contrarian advice

[Smokystache]

...
When you make contrarian moves against your family and friends and end up being correct, your world becomes lonely. Your family and friends will not rally behind you and celebrate you. Even though you were correct, your resistance to the social pressure will create social fractures. This point was beautifully illustrated in the movie, "The Big Short"....

I didn't want others to miss this nugget near the end of your post. I have found something similar is also true when you quit a "good" job and go into business for yourself. They will almost always think you're crazy ... and then they will be frustrated when you succeed. I think it creates a weird dissonance in them, they think "Well they did it, so does that mean I should be able to do it, but I'm scared .... I think they just got lucky and it was still a bad decision (even though they are very successful)"

[SeattleCPA]

I find, as I trim winners and close out shorter term positions (GLP-1 anti-hype in medical devices) that I also have a high cash position.  It's not a strategy to time the market, but I don't find a lot of new ideas that excite me.

The fact that I can park it at 5% also helps make me picky.

You're intuitively applying Nobel laureate Robert Merton's formula here... saying basically if I can get 5% riskless return why bear a bunch of risk to reach for 6%.

I kind of think Buffett is (wisely) doing the same thing.

[marcus_aurelius]

OP here. Considering the big downward move in the market today, is anyone applying Buffett's contrarian rule and buying? Or is the market not "fearful" enough yet?

[GilesMM]

Fearful is more like giant banks collapsing, a global pandemic, that sort of thing. The end of the financial world. That is when you should buy and perhaps risk losing a lot.

[MustacheAndaHalf]

CNBC's Halftime report features several professional investors, discussing their thoughts on the market.  The claim they made is that the "yen carry trade" had to be unwound in light of recession risk in the U.S. (and specifically in YEN-USD).   None of them were panicked by the S&P 500 drop... which, by the way, has been recovering since the market open.

[Telecaster]

OP here. Considering the big downward move in the market today, is anyone applying Buffett's contrarian rule and buying? Or is the market not "fearful" enough yet?

I'm retired so I'm a net seller.  However, this whole thing is a big yawner.   The markets are back where they were in what, May?    The S&P is up "only" 10% year to date and the Nasdaq is about the same.   

But yes, there seems to be lot of panic in the markets today.   

[reeshau]

I was interested in a couple things, early in the morning.  The Schwab shit the bed.

Certainly not a day that will get a label, or even be remembered 2 years from now,  after a stellar July, some give back is to be expected.

[lhamo]

I have a fairly large chunk of money from my divorce settlement sitting in a MM fund in my trad IRA.  I've been buying 10k tranches of VTSAX during market dips.  Put in an order on Friday for a purchase on Monday.  Yes, I am a dirty market timer....

[Financial.Velociraptor]

Yes, I am a dirty market timer....

You do you.  Won't get any 'kink shaming' from me!