The Art of being a Contrarian
If all your friends jumped off a bridge, you probably wouldn't
In 1935, Solomon Asch ran a line experiment where he showed a picture of a vertical line followed by three lines of different lengths, one of which was clearly the same length. Groups of eight students participated in trying to determine which of the three lines was the same length, except there was a catch.
All but one of the eight individuals were actors. The actors purposefully worked to convince the other individual of the wrong answer. In the groups where seven of the eight individuals were actors, an error rate of 36.8% was seen. In the control group, with no pressure to conform and no actors, the error rate was 1%.
We live in a society that is built on conformity for better or worse. Being contrarian and standing in the face of multiple individuals is a daunting, thankless path as evidenced by the 35.8% difference in the actor group and the control group, few wanted to go against the norm. Going against the grain when everyone is telling you not to is not easy and sometimes the default, agreeing with the masses, proves to be the easiest but this isn’t how the earth moves forward.
Mamba Mentality
Kobe Bryant is arguably considered one of the greatest basketball players to ever grace this earth. Regardless of what you think of his basketball skill, he probably is the greatest competitor this earth has ever seen. His work ethic and competitive nature were unmatched. He was defiant in the face of normality and few, if any, were like him. Pau Gasol spoke on Kobe in the foreword of The Mamba Mentality: How I Play,
“One of the qualities that has made Kobe so successful, and always will, is his attention to detail. He always used to tell us: if you want to be a better player, you have to prepare, prepare, and prepare some more. His dissection of the game was at another level … In my entire career, I have never seen a player as dedicated to being the best. His determination is unparalleled. He unquestionably worked harder than anyone else I have ever played with. Kobe knew that to be the best you need a different approach from everyone else.”
In 2008, he was a part of the “Redeem Team”. The Redeem Team was the 2008 USA Men’s Olympic Basketball Team that was on a path of redemption after back-to-back bronze medals at the 2004 Olympics and then the 2006 FIBA World Championship, a rather disappointing showcase for the country deemed to be the pinnacle of international basketball. Kobe understood the gravity of the situation and the importance of the United States re-establishing itself as the dominant country. A Carlos Boozer quote for the Redeem Team documentary on Netflix encapsulates it,
"We came back to the hotel about 5:30 or 6:00 in the morning, and guess who's in the lobby on his way to the gym? Kobe. We asked 'Where you going, bro?' He said 'I'm going to the gym'. As we're going in the elevator up to our rooms, we're like 'Did you hear that? We're all talking like this guy's really dedicated. Next thing you know, it goes from just Kobe at 5:30 in the morning to LeBron James and Dwayne Wade and by the end of the week, the whole team was getting up every morning and we're on Kobe's schedule."
What allowed Kobe to be great was he was a contrarian. He went where others wouldn’t. He got up at 5:30 to chase a dream despite no one else being there. Kobe is held in such high esteem and is a living embodiment of greatness for a reason. He did what few others are willing to do. Kobe is an anomaly. He sought to defy the norm, something that has become so rare. Yes, it is daunting, and I’m sure the clubs were a better time, but everyone can do it.
What Moves Us Forward
Being contrarian is ultimately what changes the world or the sphere in which you operate. Kobe righted the path of USA men’s basketball by not conforming. The world has never changed by continuing to do things that previously existed. The world is changed through progress and innovation. Just imagine if we continued to do things that were considered normal years ago.
We would still have smoking and non-smoking parts of the planes and smoking cigarettes would still be allowed everywhere
Cars would still have cigarette lighters and ashtrays
Maps would still need to be printed out for road trips
Measles, polio, etc. would still be considered deadly
The list goes on but just imagine if no one ever went against the grain. We would probably be a lot unhealthier, traveling would be much harder, and life would be shorter just to name a few things.
Musk started Tesla to create affordable mass-market electric vehicles. Jobs and Wozniak created Apple to change how people viewed computers. Gates founded Microsoft to get a computer on every person’s desk. Burry shorted the housing market in 2008 despite a large investor revolt and many disagreeing.
All of these individuals stood in the face of conformity and dealt with severe backlash for the endeavor they were undertaking but in the end, the world was better off. We need contrarians to move life forward and make our existence on this earth better.
Burry is an extreme example as he is now considered to be one of the best finance minds in the world. He stood ground in the face of an investor revolt where many wanted their money back. He saw what few could see and he went where few would go. Both Burry and Kobe are extreme examples of being a contrarian but with anything, there are levels to it. Kobe and Burry are at the top but truthfully, anyone can be a contrarian.
What it Actually Takes
Being contrarian is not as hard as it is made out to be. With anything, the thought of it seems much harder than it actually is. Keeping your new year's resolution is contrarian. Sticking to a diet is contrarian. Staying true to a workout habit is contrarian. These are simple tasks but the continual attack of them is what makes them hard. Repetition is boring but repetition is necessary. It is just a matter of repeating things enough that they become a habit and getting over the proverbial hump.
It is said that to be in the top 1% of podcasters, you need to have 21 podcast episodes. Just 21 episodes. Being contrarian doesn’t have to be hard and if you can be in the top 1% of anything, there’s a good chance you might just have something good brewing. Being a contrarian can be posting 22 podcast episodes. Being a contrarian can be just showing up to the gym for 30 minutes of quality work a day. Being a contrarian can be not buying a stock at an all-time high but shorting a stock at an all-time high.
To the Moon
Conforming is just furthered through the epidemic of fear of missing out (FOMO). GameStop spiked to $60, I need a piece of the profits. It comes back to the herd-like mentality. No one wants to miss out on the money that everyone else is making.
In markets, it is so easy to want to jump in on what seems to be the ride up but ultimately, is the top. We see it in housing markets, car markets, and the stock market, FOMO is everywhere. GameStop started the meme stock craze and took an escalator up to $80 before taking an elevator down to $10, not even a month later. Vivid memories of people trying to short squeeze the stock to infinity and people jumping in at $60, $70, $80 to only see a sharp depreciation shortly after.
What got them there was not being contrarian but instead, trying to catch the craze before it lost all of its luster. Imagine if they had shorted the stock at those levels by buying a put or selling a call, life would have been much different. Being contrarian would have got them there but instead, they wanted a taste of the craze and couldn’t resistance the FOMO.
The meme stock craze is anything but contrarian. It is littered with phrases like WAGMI, were all going to make it, and diamond hands. Phrases that imply the community is in this together, the community will continue to hold the stock and crypto until every single soul profits.
This never happens as at the end of the day, everyone is truly concerned about their own interests and not the community's, that is just the way the world works. Everyone is the main character of their own life. It is a herd-like mentality that often leaves someone damaged, someone hurt because if everyone made a profit on every trade they did, the world would be a much different place.
The stock market is a zero-sum game. As you continue to hold while your position goes against you, or have “diamond hands” as they like to say, someone is just taking your cold hard cash right from the grasp of your fingers. No one ever changed their lives by holding because everyone in their “community” is doing the same. Just like, you wouldn’t actually jump off a bridge if all your friends did, a timeless lesson from our parents. So why do we do that now? Why are herd mentalities becoming a norm?
Going the way everyone else did never changed the world or continuing to do what you always did never changed your life.
We see it all the time in mainstream media. Analysts calling for a “buy” as the stock inches past its all-time high. It is a dangerous game, one that fits the criteria of continuing to ride the wave. Gravity teaches us an important lesson here as what goes up, must eventually come down. Stocks have ebbs and flows and don’t go up forever. If only, they embraced the Buzz Lightyear mindset “To infinity and beyond!” Then maybe we would never have to work a day in our lives but until then, there is value in being contrarian.
Parting Words
We have a purpose on this earth to leave it better than we found it. We achieve progress through change and change is a direct byproduct of being a contrarian. Kobe, Burry, Musk, Jobs, all changed the trajectory of their lives, and the world for that matter, by doing what few would dare to do. They sought out change and the great thing is they are all human just like us. There is no reason why we can’t be just like them. No one ever said, “They really changed the world, or their lives, by going with the flow.”
Thanks for reading.
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