who acts contrary to conventional wisdom: he or she is bearish
when others are bullish
, and vice versa. Contrarian philosophy is based on the observation that most people who believe the market
will go up have already bought
all they could and have no purchasing power
left; hence the market has to go down when they start to sell
. Conversely, those who believe market will go down have already liquidated
and have a lot of purchasing power, hence the market has to go up when they start to buy.