The 13 greatest contrarian investors of all time have used their unpopular opinions to beat the market countless times and make incredible returns.
Contrarian investing makes up a wide scope of ideas and investment styles. Ultimately, it boils down to making financial decisions and investments fully against the greater market sentiment.
These contrarian investors are the bulls during bear markets, the bears during bull markets, and anyone bold enough to stray far away from public opinion with millions of dollars at stake.
Contrarians have famously predicted the crash of 1987, the housing market bubble of 2008 and many more historical events to make their best investments. They are unafraid to buy when the market is at its darkest place, and smart enough to sell when they sense the optimism has gone too far.
Here are the 13 greatest contrarian investors of all time.
The 13 Greatest Contrarian Investors of All Time, #13:
John Neff is widely considered a contrarian, although he would likely question the title. Neff describes himself as a value investor and saw the most undervalued companies in areas overlooked by the market.
Neff ran the Vanguard Windsor fund for 31 years and averaged 13.7% growth per year, beating the S&P 500 by an average of 3%. He was considered the “professional’s professional.” Despite many of his more contrarian investments, many money managers trusted their personal portfolio to him, believing it would be safer with him than anyone else.
The 13 Greatest Contrarian Investors of All Time, #12:
In the early days of the U.S. stock market, accurate and up-to-date information was rare, meaning the best data required a massive operation to obtain and market manipulation was everywhere. Jesse Livermore saw this problem and was an early pioneer of technical analysis as a basis for his trades.
Livermore took huge huge short positions before the 1906 San Francisco earthquake and the Wall Street Crash of 1929. Many of his bold moves are considered legendary today — in a time where analysis was a largely new concept, breaking away from market sentiment and public opinion was far less common and far more risky. And yet, Livermore’s biggest and riskiest moves paid off in full.
The 13 Greatest Contrarian Investors of All Time, #11:
Ray Dalio, famously quoted as saying “You can’t make money agreeing with the consensus view,” is a powerhouse investor running the largest hedge fund in the world. His contrarian style of investing allowed him to predict and act defensively regarding several market drops, including the housing crisis of 2008.
Barron’s magazine wrote in 2007, “Nobody was better prepared for the global market crash” than Bridgewater’s clients and subscribers to its Daily Observations. The company “began sounding alarms… in the spring of 2007 about the dangers of excessive financial leverage.”
The 13 Greatest Contrarian Investors of All Time, #10:
Dr. Marc Faber was a Swiss-born investor who received his PhD from the esteemed University of Zurich at the young age of 24. The man rallied against popular opinion to forecast Black Monday in 1987, the Japanese bubble in 1990, the gaming stock crash of 1993 and the Asia Pacific Crisis of 1997. Other predictions and lamentations of his can be found in his publication, The Gloom, Boom & Doom Report.
Faber’s contrarian investment philosophy is seen in his personal motto, “Follow the course opposite to custom and you will almost always be right.”
The 13 Greatest Contrarian Investors of All Time, #9:
Sam Zell is a real estate investor who is considered by many as the father of Real Estate Investment Trusts (REITS). He began buying real estate in the 1960s through economic turmoil and continued to increase his position during market crashes and corrections. The investor perfectly predicted economic growth patterns and held much of his portfolio for over 40 years — his mantra “stay alive ‘til 95” encapsulated his faith in the real estate market’s long-term viability despite short-term market pessimism.
The 13 Greatest Contrarian Investors of All Time, #8:
Eduardo Elsztain is an Argentinian investor who has worked closely with George Soros. The man first connected with Soros when walking into his office and asking him for a $10 million investment. By Elsztain’s charm and charisma, Soros accepted, and the Argentinian grew the $10 million into a $500 million portfolio within a matter of years.
Elsztain bet heavily in favor of the bearish Argentine real-estate market — despite popular belief, the Argentinian economy recovered after 2002 and the pair made a fortune. He and Soros developed the Dolphin Fund together and used it to purchase more Argentinian land and shopping centers at the depth of the market corrections and crashes since then.
The 13 Greatest Contrarian Investors of All Time, #7:
David Dreman authored what is considered by many to be the Bible of contrarian money management — his book, “Contrarian Investment Strategy: The Psychology of Stock Market Success,” is considered a must-read for all serious investors. Anyone interested in contrarian investment philosophies will likely find this book to be a valuable starting place.
Dreman continues to write for more adversarial investors today. The author has published a highly-popular column in Forbes magazine for over 20 years. In “The Contrarian,” he discusses some of his own investments, as well as issued anti-market warnings, having become a voice for much of the contrarian investment community.
The 13 Greatest Contrarian Investors of All Time, #6:
Mark Ripple is the author of the book “Handicapping the Wall Street Way,” describing in detail the process of contrarian investing and how to bet against market sentiment successfully.
The money manager graduated from Hudson Valley Community College and began studying at Rensselaer Polytechnic Institute before being drafted as an investment banker. Ripple was, at the time, the youngest investment banker in New York at the age of 21 — a few months later, he was recruited by Merrill Lynch.
The investor currently serves a very small clientele through PVR Investment Holdings, where he takes a number of contrarian positions alongside more traditional investments.
The 13 Greatest Contrarian Investors of All Time, #5:
Investor David Tepper is said to be the sole reason Goldman Sachs survived the 1987 market crash. Tepper saw the crash as an opportunity to purchase bonds of the financial institutions crippled by the economic collapse — when the economy recovered, the bonds soared in value.
After this feat of brilliance, Tepper was surprised to see he was passed over for partner at Goldman, largely due to his reportedly “loud and profane” manner disconcerting the current executives.
David Tepper opened his own fund and generated returns of 61% in 2001. He focused on distressed bonds and took advantage of the financial struggles faced by S&P 500 companies. The investor prioritizes what he refers to as the “diciest of companies,” making significant returns on those investments considered too risky for the rest of the market.
The 13 Greatest Contrarian Investors of All Time, #4:
Sir John Templeton began managing the Templeton Growth Fund in 1954 and continued to guide its investments through 1992. An investor trusting Templeton with $10,000 when his management began — assuming the dividends are reinvested — he amassed $2 million at the end of his tenure in 1992.
Templeton’s contrarian investment philosophy was eminent in both domestic stocks as well as international investments, for which he was an early pioneer. The investor argued the best time to buy into a company or country was “at the point of maximum pessimism.”
In 1939, Templeton borrowed money to purchase shares of every European company as a reaction to World War II. Many of these companies were fully bankrupt when he purchased them, but four years later, the investor sold his shares for an enormous profit.
The 13 Greatest Contrarian Investors of All Time, #3:
Michael Burry is most famous for his prediction of the 2008 housing bubble collapse and is featured in the hit movie, The Big Short. This was not the first time Burry had bet against the market, however: in 2001, the investor shorted overvalued tech stocks at the peak of the internet bubble, leading his firm Scion Capital to outperform the S&P 500 by nearly 70%.
In the following two years, the S&P 500 continued to lag while Burry’s investments skyrocketed. In 2002, the S&P 500 fell 22.1% while Scion Capital rose 16%. In 2003, the S&P 500 gained 28.69%, an impressive number dwarfed by Burry’s 50% returns. By 2004, the investor had more than $600 million under his management and was turning away money.
The 13 Greatest Contrarian Investors of All Time, #2:
Warren Buffett is widely considered the greatest investor of all time, and much of his investment strategy relies on a contrarian philosophy. Buffett advises to “be fearful when others are greedy and greedy when others are fearful.”
The investor argues that the best time to invest in a stock is when the shortsightedness of the market has beaten down the price. This has led Berkshire Hathaway to make many of its most profitable investments during bear markets when quality companies are sold at a discount. Likewise, when markets are booming, Buffett holds cash — and a lot of it. Securing the best value, for Buffett, means pouncing on the undervalued stocks ignored by the market.
The 13 Greatest Contrarian Investors of All Time, #1:
George Soros is often cited as the greatest contrarian investor of all time. While Warren Buffett may have amassed more money using this strategy, Soros is famed for taking the contrarian ideology to an extreme. His conviction in ultra-risky investments that largely are frowned upon by others in the market has been the driving force behind his multi-billion dollar fortune.
Soros’s fame as a contrarian investor was secured by one of his first and biggest bets to date. The investor borrowed billions of dollars in British pounds and immediately converted them to German marks in order to short the British economy. This move tipped the British market just over the edge, and within hours, the pound had plummeted in value. Soros profited nearly $2 billion in a single day and earned the nickname “the man who broke the Bank of England.”
This event, alongside his prediction of the 2008 market crash and several other bold short positions, makes us confident in saying George Soros is the greatest contrarian investor of all time.
Jonathan Wolfgram is an investment analyst who writes website content at Eagle Financial Publications. He graduated from the University of Minnesota with Bachelor’s degrees in Finance and Philosophy. Jonathan writes for www.DividendInvestor.comandwww.StockInvestor.com.
As an enthusiast with a deep understanding of contrarian investing and the profiles of prominent contrarian investors, I can provide valuable insights into the concepts mentioned in the article. My expertise in finance and investment strategies aligns well with the subject matter, allowing me to shed light on the significance of contrarian approaches and the notable figures mentioned.
Contrarian investing is a strategy that involves making financial decisions and investments contrary to the prevailing market sentiment. This approach requires the investor to go against popular opinion, often buying when the market is pessimistic and selling when optimism is excessive. The article highlights 13 of the greatest contrarian investors of all time, showcasing their ability to make successful investments by challenging conventional wisdom.
John Neff (#13):
- Described as a value investor.
- Managed the Vanguard Windsor fund for 31 years, beating the S&P 500 by an average of 3%.
Jesse Livermore (#12):
- Pioneer of technical analysis.
- Made bold moves, including shorting before the 1906 San Francisco earthquake and the Wall Street Crash of 1929.
Ray Dalio (#11):
- Famous for his quote, “You can’t make money agreeing with the consensus view.”
- Successfully predicted and acted defensively during market drops, including the 2008 housing crisis.
Marc Faber (#10):
- Forecasted events like Black Monday in 1987 and the Asia Pacific Crisis of 1997.
- Known for his contrarian investment philosophy, as reflected in his motto, “Follow the course opposite to custom.”
Sam Zell (#9):
- Real estate investor and considered the father of Real Estate Investment Trusts (REITS).
- Successfully predicted economic growth patterns and maintained long-term faith in the real estate market.
Eduardo Elsztain (#8):
- Worked closely with George Soros and successfully bet on the bearish Argentine real-estate market.
- Developed the Dolphin Fund with Soros and made significant profits during market corrections.
David Dreman (#7):
- Authored the book "Contrarian Investment Strategy: The Psychology of Stock Market Success."
- Known for his column in Forbes magazine and considered a voice for the contrarian investment community.
Mark Ripple (#6):
- Author of "Handicapping the Wall Street Way" and an advocate of contrarian investing.
- Managed contrarian positions alongside more traditional investments through PVR Investment Holdings.
David Tepper (#5):
- Played a key role in Goldman Sachs surviving the 1987 market crash.
- Generated significant returns by focusing on distressed bonds and investing in the "diciest of companies."
John Templeton (#4):
- Managed the Templeton Growth Fund and had a contrarian investment philosophy.
- Believed in buying at the "point of maximum pessimism" and made profitable investments during World War II.
Michael Burry (#3):
- Famous for predicting the 2008 housing bubble collapse, featured in "The Big Short."
- Outperformed the S&P 500 by nearly 70% in 2001 by shorting overvalued tech stocks during the internet bubble.
Warren Buffett (#2):
- Widely considered the greatest investor of all time.
- Emphasizes a contrarian philosophy, advising to be greedy when others are fearful and vice versa.
George Soros (#1):
- Often cited as the greatest contrarian investor of all time.
- Famed for extreme contrarian bets, such as shorting the British economy and profiting $2 billion in a single day.
In conclusion, contrarian investing, as exemplified by these 13 remarkable individuals, involves defying market sentiment to achieve exceptional returns. Each investor has employed unique strategies and insights to navigate markets and make successful contrarian moves, contributing to their reputation as the greatest contrarian investors of all time.