Doing the opposite of everyone else is this concept that a large majority of the time everyone else is mistaken. When a herd all at the same time wants to go in one direction, the one that wants to go in a different direction could be most correct. This concept of doing the opposite of everyone else is what has allowed me to survive. At times I know this isn’t good but without doing this I know that the likeliness of being in the black 2 percent would have been greatly diminished. In this article, I’ll describe a couple of ways I’ve done the opposite of everyone else throughout life and different ways that it’s benefited me. One has to be comfortable in a room where everyone is saying left and then you come along and say wait a minute what about right. Even if you don’t say let’s go right in a convincing way and everyone else goes left. It’s still okay.
Doing the Opposite of Everyone Else on The Benches
As a teenager, our favorite thing to do in the neighborhood that I grew up in other than sports was to sit on benches and talk. Throughout the complex that we lived in there was tons of benches. We spent hours and hours sitting on these benches. Today they’ve gotten rid of a lot of these benches for various perceived reasons but back then benches were everywhere. The benches was where everyone talked about various topics, cracked jokes, and did a whole slew of other things in our teen years. I was pretty quiet growing up and could get away with not doing certain things on those benches. The things that I didn’t do on the benches is the beginnings of my contrarian lifestyle. It’s the reason I still practice doing the opposite today. It’s the basis of my own basic free will.
The Benches, Marijuana Smoke and 40 ounce Bottles
Some interesting dialog would take place while sitting on the benches. My friends and I would sit on the benches for hours. Our favorite delicatessen was pizza and quarter waters. As it got late, eventually on the benches someone would either start rolling up a joint or passing around a 40 ounce beer. The blunt or 40 ounce bottle would then go from person to person on the bench. Each person taking a puff or a swig. Eventually, it would get to me and I would wave my hand and say, “Nah, I’m good”. My friends would then pass it over me and move on to the next person on the bench. Eventually they learned to just pass it over me without even asking. To this day I still haven’t tried marijuana. I do respect my friends from the neighborhood for not pressuring harder. These moments on the benches was the beginnings of me doing the opposite of everyone else.
Opposite of Everyone Else in the Stock Market
As mentioned in “why I don’t like index investing?”, I’ve accumulated my basket of stocks over the last 20 years. I consistently buy in both good times and bad. I urge others to do the same. I’ve accumulated around 20 stocks over the last 20 years. The S&P 500 Mid Year to date return in 2018 is close to 3 percent return. My own personal return this year is closer to 30 Percent. The question that I consistent ask myself is how is it possible that the S&P has a return of close to 3 percent in 2018 while my personal return is closer to 30 Percent. There are multiple answers to this question. However, one of the larger answer relates to actions that are largely contrarian to everyone else. The answer is fairly simple. Everyone else was sellers in 2007, 2008, 2009, 2010, 2011, 2012, etc while I was still buying the entire time. Those buys in those years were relatively cheap and largely powering my portfolio today. Following the crowd seems nice but it can be very costly. At the height of the financial crisis 65 percent of American households owned stock, recently only 52 percent own stocks. The decrease in amount of American households that own stocks proves that the herd was selling big time during the years after the financial crisis. I was still buying, however. See my mid year 2018 portfolio vs the S&P below.
Fascination with Being in Smaller Groups
If there is a large group saying one thing and a smaller group saying another. I’m always fascinated with being in the smaller group. Logically it would make sense that the majority must be correct but most times the majority and even experts are off, early, or totally incorrect. I tend to listen to what the majority is stating, listen to the reasoning of the majority then based on my own free will and reasoning take a differing opinion. This may seem annoying to others but it’s something that I’ve been doing since sitting on those benches. It’s now a part of my DNA and will continue to be. I urge you to try taking the opposite position as everyone else sometimes.
Readers
Have you ever taken the opposite position as everyone else? What happened long-term? How did it benefit you or even the group?
I want to buy stocks, too…But at the same time I don’t want to invest in companies whose policies don’t align with my moral code. Where I live now, a lot of the established national companies etc were started either directly or indirectly because of the transatlantic slave trade or they do business in such a way that the environment gets ruined etc. In the end, there are not a lot left to invest in. How do you weed all of that out?
Moral code is important. I would suggest starting with the companies you buy products or services from in real life. Research those companies first. Some of my best investments come from real products or services that I use regularly.