Benj Gallander is a renowned investment guru in North America, known for his contrarian approach to investing. His unconventional methods have led to high returns, both short- and long-term, in the stock market. As co-editor of Contra the Heard Investment Letter, a columnist for The Globe and Mail, and a writer for Bloomberg and Canadian MoneySaver, Gallander has made a name for himself in the investment world.
In his book, “The Uncommon Investor: A Contrarian Guide to Investing in the Stock Market,” Gallander lays out his rules for investing that defy conventional norms. He believes that buying and holding indefinitely is not always the best strategy, and stop losses are not a smart move. He redefines the risk-reward relationship by rarely buying a stock that does not have a chance of a minimum 100 percent return. He remains unconcerned with the daily pulse of trading, which allows him to dance against the herd and capitalize on market inefficiencies.
The Contrarian Investor’s 13
Gallander’s book is divided into sections, with each section detailing a different aspect of his contrarian investment philosophy. Here are the highlights of his approach:
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A Contrarian Chooses When to Go Against the Crowd – Gallander believes that the best investment opportunities arise when the market is in a state of panic or pessimism. Contrarians do not follow the crowd, but rather they choose to go against it.
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Always Set a Sell Target – Every investment should have a predetermined sell target, regardless of whether it’s a winner or a loser. This helps investors avoid getting too greedy and making poor decisions.
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Always Think in Percentage Terms – Investors should always think in percentage terms, rather than dollar amounts. This helps investors avoid getting caught up in short-term fluctuations and focus on long-term gains.
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Analyze Your Mistakes – Investors should learn from their mistakes, and analyze them to avoid making the same mistakes in the future.
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Ask Yourself: When Is Enough, Enough? – Investors should know when to take profits and when to cut losses. Greed can be detrimental to long-term returns.
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Avoid Crowd Psychology – Crowd psychology can be dangerous in the stock market. Investors should not follow the crowd, but rather choose to go against it.
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Avoid Debt-Laden Companies – Companies with a lot of debt can be risky investments, especially in a volatile market.
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Be Lazy and Let Others Do Research for You – Investors should take advantage of the research and analysis done by others, rather than trying to do it all themselves.
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Beat the Market. Not Yourself – Investors should focus on beating the market, rather than trying to compete with other investors.
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Before Buying, Check the Order Quantities – Before making an investment, investors should check the order quantities to see if there is a large sell order that could impact the stock price.
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Before Buying, Test Your Idea on People You Respect – Investors should bounce their investment ideas off people they respect to get feedback and advice.
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Buy on Weakness. Sell on Strength – Investors should buy stocks when they are down and sell when they are up.
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Buy the Management. Check Her/His Track Record – Investors should look at a company’s management and their track record before making an investment.
- Keep Emotions in Check – Successful investing requires keeping emotions in check. Fear and greed can lead to poor investment decisions. Investors should focus on the long-term and not get caught up in short-term market fluctuations.
- Look for Catalysts – Gallander believes that a stock’s price is not always reflective of its true value. Investors should look for catalysts that could potentially unlock the stock’s value.
- Stick to Your Plan – Once an investment plan has been established, investors should stick to it. Deviating from the plan can lead to poor investment decisions.
- Be Prepared to Be Wrong – No investor is infallible, and mistakes will be made. Investors should be prepared to be wrong and learn from their mistakes.
- Monitor Investments Closely – Investors should monitor their investments closely, particularly during times of market volatility.
Gallander’s book also highlights the importance of diversification. Investors should not put all their eggs in one basket but rather should diversify their portfolios across different sectors and asset classes. Additionally, investors should focus on companies with strong fundamentals, including a solid balance sheet and a competitive advantage in their respective industries.
It is also worth noting that while Gallander’s approach to investing is contrarian, it is not reckless. He does not advocate for blindly going against the market but rather for finding undervalued stocks with strong potential for growth. He emphasizes the importance of research and analysis and urges investors to avoid making decisions based on rumors or emotions.
Overall, Benj Gallander’s “The Uncommon Investor: A Contrarian Guide to Investing in the Stock Market” is a valuable resource for investors looking to improve their returns and reduce their reliance on brokers and advisors. By embracing the principles of discipline, patience, and research, investors can learn to become successful contrarian investors like Benj Gallander.
Gallander’s approach to investing is unique and based on his experience and research. However, he is not alone in his belief that being a contrarian can lead to high returns. Experts such as Warren Buffett and Peter Lynch have also adopted a contrarian approach to investing, and their success is well-documented.
For example, during the market meltdown of 2001, Gallander’s approach led to a staggering return of 64.8 percent. This demonstrates that his methodology is not just a theory but is backed up by real-world results. Gallander’s book is not just a list of rules but also includes stories and anecdotes from his investing career, which adds to its engaging nature. He shares his successes and failures, allowing readers to learn from his experiences and mistakes.
One of the key takeaways from Gallander’s book is the importance of discipline and patience. Successful contrarian investing requires discipline and a long-term view. It’s not about making a quick profit, but rather about finding undervalued stocks that have the potential to grow over time. Gallander’s book also emphasizes the importance of research and analysis. Investors should not blindly follow the crowd or invest based on rumors but rather should do their due diligence before making any investment decisions.
Benj Gallander’s “The Uncommon Investor: A Contrarian Guide to Investing in the Stock Market” offers a unique and compelling approach to investing. His methodology may go against conventional norms, but his results speak for themselves. The book provides practical advice and real-world examples that investors can use to improve their returns and reduce their reliance on brokers and advisors. By embracing the principles of discipline, patience, and research, investors can learn to become successful contrarian investors like Benj Gallander.