QOTD: These people belong to casinos, not to markets.

A cognitive bias that plays a major role in contrarian behavior is a variation of Reactance, i.e., the desire to be different in order to prove something. This has worked well on occasions for some individuals that became famous for predicting crashes but their subsequent predictions failed miserably. However, in the meantime, these individuals enjoyed high positions and large rewards for just being lucky. Unfortunately, our society rewards luck more than skill. This is evident beyond doubt from lottery jackpots. Our society is “lottery-based.” Some in the financial field have realized that and take their chances. But in the case of bears during 2010 and 2011 this did not work out well. They took their chances and did not make it. It is a game: usually when you hear an extraordinary forecast, there is someone behind it who rolls dice in an effort to make it big. These people belong to casinos, not to markets.

- Mike Harris