For me, the art of contrarian investing is a philosophical one. The words of Henry George come to mind:

 

Unless there be correct thought, there cannot be correct action, and when there is correct thought, right action will follow.

 

In the terms used by Ludwig von Mises in Human Action we might say the following; unless there is correct identification of suitable means for an end, that end cannot be correctly attained. When suitable means are identified, correct utilisation of those means for the end may take place. So, if we seek consistent profits via financial speculation, then we should think very carefully about the intellectual resources that we use.

 

Here, I discuss the common pitfalls in the consensual investor’s market philosophy, and the virtues of contrarian investing.

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An update of the Daily Treasury Statement Charts for 12/4/11:

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