Buy Hold Rant
Going Against the Grain: Benefits of Contrarian Investing
9/25/2025, 7:00:37 PM
Economic Summary
- Contrarian, value-driven investing can uncover buying opportunities when high-quality companies are temporarily written off by the market, implying potential for strong recoveries (examples: META, NFLX).
- Headline-driven events (e.g., Netflix DVD separation, IPO volatility) often trigger sell-offs that present easier-to-find investment opportunities for active researchers.
- Post-IPO price swings can lead to prices below recent private funding rounds, creating mispriced opportunities for investors willing to act quickly (example: HOOD).
Bullish
- Buy quality companies when market has written them off for extraneous reasons.
- Buying after headline-driven sell-offs can produce outsized long-term returns (e.g., NFLX, META).
- Post-IPO dips that trade below private round prices create attractive entry points.
Bearish
- Widespread negative sentiment toward Facebook/Meta during post-IPO and other drawdowns.
- Post-IPO volatility and hype-driven sell-offs creating rapid price declines (Robinhood example).
- Companies getting written off after headline events or strategic changes (e.g., Netflix DVD separation).
Bullish tickers
METAHOODNFLX
Bearish tickers
METAGMEHOODNFLX
META
Bullish
Bought into Meta when market sentiment was extremely negative, viewing the sell-offs as durable buying opportunities.
Bearish
Public and investor backlash around Facebook/Meta at various points caused deep drawdowns and skepticism.
HOOD
Bullish
Seen as a buying opportunity when IPO pricing dipped below prior private-round valuations shortly after listing.
Bearish
Sharp post-IPO volatility and hype followed by rapid price declines left early public investors wary.
NFLX
Bullish
Bought after the market largely wrote Netflix off in 2012 and again in 2022, with strong subsequent recoveries.
Bearish
Strategic shifts (like the DVD separation) triggered headline-driven sell-offs and narratives that Netflix was dying.
GME
Bearish
Associated with intense public anger and extreme volatility, contributing to a broadly negative narrative.
People mentioned
Mark Zuckerberg