If you're a contrarian investor you should be looking for pessimism. The late John Templeton, one of the better investors of all time, called it "maximum pessimism."
Templeton founded a group of funds in the 1930s which in his later life he sold to Franklin, the huge fund group in northern California investors now know as Franklin Templeton. Story has it that in 1939 after WWII broke out, with borrowed money he bought 100 shares of 104 stocks on the then New York Stock Exchange selling for $1 or less.
Thirty-four of the 104 companies were in bankruptcy at the time. A few years later when he took his profits, only four of the bankrupt firms were worthless. Now that's maximum pessimism. Templeton was a value guy.
Templeton wasn't the only successful mutual fund owner to sell his firm to Franklin. Michael Price, another value guy who is still very much around and whom the business school at the University of Oklahoma's named after, did the same in the 1990s.
If there's such a thing as a pantheon for astute investors both of these gentlemen should be there. So here's a question. Looking around today do you see any maximum pessimism and if so where?
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