Go against the herd – you might reap a bonanza

For the last two months the narrative amongst hedge funds has been to reduce India exposure and increase allocation to China. While Shanghai Composite were inching higher, Indian Bourses witnessed their first serious correction of the Current Bull Run. Last week this ‘China Long and India Short Play’ was like a crescendo with near consensus opinion amongst all analysts. A consensus opinion is usually a dangerous thing and offers great opportunities for smart investors and traders. After hearing continuously and repeatedly by various wise men on business channels as to how Indian Markets were headed lower and China was the favored market for the near term, we close this week with a 3.5% unexpected gain. A bigger surprise the Shanghai Markets collapsed by  a whopping 13% - the biggest weekly drawdown in this index in the last several years. A contrarian strategy to go against the consensus opinion needs a lot of conviction and guts but in many cases, including this week, results in mind boggling gains. So next time when all noises are pointing towards one direction try and be brave and go the other way……