Mary, Mary Not So Contrary

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While in the late 1990s it was most hip to be a "day trader," the vogue for investors these days is to style themselves as "contrarians." You know, the market's rocketing higher, and the contrarians are tut-tutting that everything is just so overvalued.

"I'm a contrarian," they say in that disdainful tone that old-school Dave Matthews fans reserve for the band's newer music. "I saw them play at the Pika House at UVa before anyone had ever heard of them," they sniff. "I'm a contrarian."

It's easy to feel contrarian when you're watching companies with marginal businesses and razor-thin floats rocket higher each day. You believe fully that this craziness is going to stop. You have your money in the new Gold ETF (NYSE: GLD), you're short the iSharesSemiconductor ETF (AMEX: IGW) or the Financial Select SPDR (AMEX: XLF), and you're fully expecting the market to tank along with the rise in interest rates, the fall in the dollar, and a myriad other problems.

You are certainly negative. You may well be correct and prudent. But a contrarian, at this moment in time, you are not. There are too many people standing right there beside you. There's a reason that one of the most hated trades in the world at the moment is going long the U.S. dollar, and it's not because everyone but you is all hap-hap-happy.

You want to be contrarian? Great -- that particular designation awaits you, but it isn't in the form of just being negative. Contrarian players at this moment are trying to figure out if Ford (NYSE: F) is actually undervalued under the weight of its financing and pension liabilities. Contrarians might be a little bit more excited than the market about what's next for Kodak (NYSE: EK) as it tries to make the transition from a film-based business to a digital photography world.

Lots of people are negative on the prospects of the economy and the markets. There is a reason why Morgan Stanley's (NYSE: MWD) chief economist, Stephen Roach, a snarling bear at the moment, gets rock-star treatment wherever he goes these days. Lots of people believe that we're in a secular bear market, and that almost every asset class is overpriced. This author included. But you're not alone -- not even close. Financial Reckoning Day was a New York Times best seller, for heaven's sake. That's either a few people with some industrial-strength crazy buying hundreds of copies apiece, or it's a whole host of people who are quite worried. You want to be a real contrarian? Look among the wreckage of KrispyKreme (NYSE: KKD) and see if you find value.

So don't worry, you're not alone. But if you want to be alone, being negative about the state of things isn't doing the trick.

See also:

• Bill Mann's Dare to Be Wrong
• Brian Graney's Contrarian Investing

Bill Mann owns none of the companies mentioned in this story.