by Timothy Lutts
I’ve been married for more than 32 years, to a wonderful woman.
I have three grown children who have added immeasurable richness and pleasure to my life.
And I have the good fortune to own and lead a publishing company that provides investment advice to tens of thousands of individuals and professional investors, all over the world.
This is good not only because helping people achieve financial security is a worthy goal but also because it enables me to embrace my passion for ideas, particularly unpopular or contrary ideas.
The connection, you see, is that the best investors are those who are contrary. They buy after major declines, when escalating fear causes most people to sell assets at ridiculously low prices, and they sell when all is rosy and increasing greed fuels a growing demand for assets at ever-higher prices. They don’t buy what is popular; they buy what is unpopular.
It’s an easy strategy to discuss, but it’s exceedingly difficult to implement because it means thinking and acting contrary to almost everyone around you, including friends, colleagues and the media.
Yet it attracts me.
Way back in the eighth grade, my history teacher, Max Pofcher, once called me an iconoclast. I had to go home to look the word up. But it turns out he was right. I don’t like following crowds. I’ve always preferred to question the common wisdom—in a quiet, non-confrontational way—and my decades of experience in the investment industry have reinforced this trait.
So today, in addition to searching for contrary wisdom in the stock market, I enjoy looking for contrary wisdom all around me. This blog is my attempt to share some of that process.
And if some of what I write is not particularly contrary, it’s because contrariness is not appropriate everywhere.
Most of us agree that good health is worth pursuing, that a strong and stable family is a wonderful thing, and that we should make the most of each day we have, whether it’s by working to make the world a better place, or simply enjoying what that day brings us.
Timothy W. Lutts