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Be Right and Be Contrarian

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updated 07 Feb 2023

Be right and Be Contrarian is term thrown around in investing and in Venture Capital on understanding a what a good investment is. It highlights that being right is not enough in investing, because if you are right about something that everyone agrees upon, that is already priced into the stock or valuation of a company, there is no edge or advantage. Being contrarian also is not enough, if your contrarian and wrong you just lose your money. Being right and being contrarian means you know something to be true that other investors do not YET know, but will know in the future as the investment plays out, and when it does, the price of the asset you invested in prior to everyone knowing how valuable it was, has gone up to its fair value. At that point in time, now that everyone knows the contrarian part of the investment thesis, it is no longer contrarian, and potentially a good time to exit the position, since you are only right, and not contrarian.

Resources

Tim Ferris and Bill Gurley discuss Being Right and Contrarian | 8:02