The hardest thing over the years has been having the courage to go against the dominant wisdom of the time, to have a view that is at variance with the present consensus and bet that view.

The markets are always changing, and the successful trader needs to adapt to these changes.

Time and again, in every market cycle I have witnessed, the extremes of emotion always appear, even among experienced investors. When the world wants to buy only [bonds], you can almost close your eyes and [buy] stocks.

Just as outright euphoria is often a sign of a market top, fear is for sure a sign of a market bottom. Time and time again, in every market cycle I have witnessed, the extremes of emotion always appear, even among experienced investors. When the world wants to buy only treasury bills, you can almost close your eys and get long stocks.

One of the most important analytic tools when assessing an investment is an intellectually advantaged disparate view. This includes knowing more and perceiving the situation better than others do. It is also critical to have a keen understanding of what the market expectations for any investment truly are. Thus, the process by which a disparate perception, when correct, becomes consensus should lead to meaningful profit. Understanding market expectation is at least as important as, and often different from fundamental knowledge.

The hardest thing over the years has been having the courage to go against the dominant wisdom of the time, to have a view that is at variance with the present consensus and bet that view.

When your views are truly contrarian, they are inevitably uncomfortable. Courage and the ability to withstand pain are required.