When you are long a stock you are naturally trying to seek out investors who have the same opinion, and naturally stay away from those who have contrary views. Instead, we should try to do the opposite, seeking out smart people who, after doing their research (a very important point), came to a different conclusion from ours. This point is a bit more nuanced. If I talk to a momentum growth investor about Xerox, I know exactly why he’ll be avoiding it; there is no momentum in the stock price. His view will bring me very little insight. However, the perspective of a smart fundamental investor who’s done thorough research but arrived at a different conclusion might be very valuable. When we find someone who disagrees, we need to identify exactly where the differences in opinion lie (assumptions, new/missing important data points, etc.) and then methodically and objectively try to refute those points. If you cannot, maybe you are not as right as you thought you were. (emphasis mine)Read it at Contrarian Edge
Seek out people who disagree with you; The budget deficit is a stimulus; China = post-bubble Japan?
By Vitaliy Katsenelson
(h/t Zero Hedge)
See also The Upside of Arguing.
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