Buy New Orleans real estate. No, I don't
necessarily mean to actually buy New Orleans real estate, although
it might be a very good idea. The point is that it is a good
example of how extremely successful investors think.
You see, most very successful investors are
contrarians. A contrarian is an investor who deliberately decides
to go against the prevailing wisdom of other investors.
Contrarians are not going to follow the crowd. In fact, they're
going to invest in whatever is being shunned by the majority of
investors. That's where they know they can find value. That's
where they know they can make huge profits.
Contrarians are the kind of investors that
would be looking to buy New Orleans real estate and shares of New
Orleans businesses when the post-Katrina conventional wisdom is
that New Orleans is a disaster area that should be avoided at all
costs and never to recover.
Contrarians were buying Google (GOOG) when it
first went public in 2004 at $85. The conventional wisdom was that
Google wasn't worth more than $85 a share. Contrarians looked at
Google's pristine balance sheet, considered the fact that the
company had a business model that was dominating the Internet, and
bought. The rest is history. Google shares soared over 400% from
the price of the original offering.
Contrarians were buying oil in 1999 when crude
was less than $15 a barrel -- there was supposed to be an oil
glut, you know -- and the crowd was buying ridiculously overpriced
dot com stocks.
And now, I'm sure that there are some future
billionaires looking seriously at investments like New Orleans
real estate.
Michael Lewis, writing for Bloomberg, wrote a
very interesting column about the wisdom of being a contrarian…
Buy
New Orleans Real Estate: The Mindset Of A Contrarian