A familiar saying among investment circles is that “everyone is a genius in a bull market”. Even though a bull market is reflective of significant optimism about stocks, in the stock market for every up, there is usually a down and it is fascinating to look at investor behaviour whenever markets go to extremes in one direction or another. For that reason, contrarian investing interesting in that it is an approach that relies on the idea that more money can be made selling to the crowd instead of trying to chase it. In the second part of our Vancouver Resource Investment Conference interview with Ben Stadelmann and Benj Gallander of ContraTheHeard.com, we got their perspective on how beginner investors can think about getting started in the markets and how they can navigate investor conferences (to read part 1 of our interview click here).
Know what type of investor you are
Both Ben and Benj have been investing for quite some time and as a result they’ve learned what approaches suit them best. In their case, value investing is the approach they are most comfortable with and in particular contrarian investing is what they enjoy and are good at. As Ben Stadelmann pointed out, “there are lots of ways to make money in the market”. Each investor needs to figure out where their own comfort zone is and what type of investing is right for them. The key, therefore, is to be willing to experiment, to make some mistakes and most importantly to learn from those mistakes.
With so many options to choose from, exploring all of them can not only seem overwhelming, it could also get very expensive. According to Benj Gallander, the best approach is to take it slow, especially when you’re stepping into the markets for the first time. Since the odds favor beginner investors making more mistakes at the outset, if you “go in whole hog, you’re much more likely to get hurt”.
These days, taking it slow may be a challenge especially for beginner investors or those stepping into the stock markets for the first time. Technology has drastically changed how individual investors can find out about market information but also how fast they can act on it. Mobile trading, for example, now allows investors and traders alike to place trades from virtually anywhere their smartphone gets reception. The hazard, according to Benj, is that with all of this instant access, investors might forgo patience and instead expect that stocks go up in price quickly or they might be inclined to risk
too much too soon.