First Post

This is the first post on the Contrarian Investor blog.  I have started this blog today to document my journey and use of contrarian investment tactics to achieve my financial goals.  The basic idea of contrarian investing is that the popular expectations of the majority of people in this world will almost always be proved wrong.  Hence, investing against the popular viewpoint will be very rewarding in time.

As of today, the S&P 500 is at 1304.28, and the Dow Jones Industrial Average is at 12,044.40.  The media and the masses are sure that the market will continue to rise this year and beyond.  After all, the market only has one direction and that is up!  Inflation is here today, and hyper inflation is coming tomorrow.  QE2 is here today, and that will be followed by QE3 & QE4 & .... & QE Infinity, etc.  The market has been on a roll since September 2010, and this has been the most intense two year bull market since the Great Depression.  Jim Cramer has recently proclaimed that "the sky is the limit" for this market.  Everyone I work with is long the market, and the bears have been silenced.

However, there are major storm clouds on the horizon.  Emerging markets peaked in November 2010, and the S&P 500 may have peaked on February 18, 2011 at 1344.07.  Most global risk assets appear to have begun major downtrends.  The majority of the world's population lives in a housing bubble, and history has proven that these do not end well.  I believe that the next 1.5 to 2 years will feature the largest deflationary stock market crash since the Great Depression.

I have been short stocks since September 2010, and I have been getting creamed.  But every dog will have his day.  I believe that my day is coming soon.  I am currently short the QQQQ, EEM, and SPY.  In addition, I own long dated SPY puts.