Every day, my job is to identify where the market is offsides — where investors are most vulnerable and positioned to get squeezed.
We want to find where everyone is wrong… so we can take the other side.
That’s what this is all about. We’re not trying to be smarter than everyone else — just slightly less stupid.
As Charlie Munger once said to Warren Buffett, “If people weren’t wrong so often, we wouldn’t be so rich.”
At TrendLabs, that’s our edge.
We go out of our way to figure out exactly where the crowd is positioned wrong — and then we profit from it.
The Big Four To Fade
When I say “everybody’s wrong,” I don’t literally mean everybody. It just feels that way sometimes.
What I’m really talking about are four basic “fade groups” — the usual suspects with a consistent track record of being on the wrong side of the trade.
When these groups reach consensus, that’s our cue to look the other way.
Journalists
This one’s almost too easy. Most financial journalists aren’t even investors — many don’t have the capital to be, and some aren’t even allowed to trade because of conflict-of-interest policies.
Their job isn’t to make money; it’s to tell stories. And they’re really good at identifying what people are already talking about — what’s driving their fear or their greed.
The problem is timing. By the time a journalist catches on, writes the article, gets it edited, designed, printed, and published — the trade is usually over.
I’ve collected decades’ worth of these “magazine cover indicators,” and they’re some of the best contrarian signals you’ll ever find.
Take two classics:
- Time magazine, April 1986: “Cheap Oil.” Crude had already bottomed below $10 a barrel two weeks before that issue hit stands. Oil then went on to rally to $150. So much for “cheap.”
- The Economist, December 2016: George Washington drawn like a muscleman on the “Mighty Dollar” cover. The U.S. dollar peaked immediately after. 2017 ended up being one of the worst years for the dollar on record.
This happens all the time.
So yes, read what journalists are saying — but not for advice.
Read it as a map of where the crowd’s already standing… and then look for opportunities on the other side.
Wall Street Analysts
The conflicts of interest here are off the charts.
If you’re one of the few analysts still working for a big bank in 2025, it pays to stick with the herd. Because on Wall Street, being wrong together is perfectly acceptable — but being wrong alone is a firing offense.
If every analyst at every other bank is bullish and you’re the lone bear, you better nail it. Miss, and you’re out of a job. Same thing if the crowd’s bearish and you’re the only bull. You better be right — or you’ll be updating your résumé.
That’s what we call career risk — and it’s why telling the truth often doesn’t pay. It’s safer to hide in the herd, collect the bonus, keep little Timmy in private school, and make sure his wife Mildred’s Botox stays on schedule.
You saw this dynamic clearly heading into 2023. Every major Wall Street firm predicted the S&P 500 would fall that year — something they hadn’t done this century.
Here’s what that December 2022 “consensus outlook” looked like:
What happened next? Stocks ripped. The Nasdaq doubled in their faces. It turned into one of the strongest bull runs in market history. Classic.
The same thing happened in reverse in 2008. Analysts were unanimously bullish heading into the Great Financial Crisis. Then came one of the worst stock market crashes ever.
That’s the herd for you.
They don’t tell you the truth.
They tell you what keeps them employed.
Asset Managers
We know for a fact that some of the worst investors on the planet — with the most money to lose — are professional Asset Managers and Hedge Funds.
When this crowd reaches a consensus, history tells us to do the exact opposite.
Remember: 90% of fund managers underperform the indexes. And that’s not just a U.S. stock market problem — it’s true globally, across international equities and bonds too.
Here’s a study from Apollo showing just how consistently this group underperforms across every time horizon:
They’re not the smart money. They’re just the most confident dumb money.
And here’s the thing about Asset Managers — they’re not malicious. They’re not spinning recession fairy tales to sell ads, and they’re not lying to save their jobs at a bank.
They’re genuinely trying to make money. They’re just not very good at it.
That’s why when this group reaches an extreme position in any asset class or sector, we want to be looking in the opposite direction.
Take this summer, for example — Asset Managers were sitting on one of the largest net short positions in Small-Caps ever.
You can guess what happened next. Small-Cap stocks ripped higher.
That’s not an exception — that’s the rule.
Economists
As Warren Buffett once said, “Any organization that employs an economist has one employee too many.”
This group is one of the easiest to fade for a simple reason: they ignore reality.
Economists live in a world of theory — not the real one the rest of us trade and invest in. They focus on what should happen instead of what is happening, which is why they’re almost always wrong, especially at key turning points.
Remember when economists confidently declared there was a 100% chance of recession a few years back?
The stock market promptly went on one of the strongest runs in history.
It’s nearly 2026 now, and we’re still waiting for that recession.
I don’t think economists are bad people or even unintelligent — they’re just trapped in a fantasy world built on equations that ignore human behavior and price trends.
It’s simple: when economists agree on something, it’s usually a great time to take the other side.
Contrarian for Contrarian’s Sake
One more thing.
We never want to be contrarian just for the sake of it.
As Jeff deGraaf famously said, “If you’re always contrarian, that makes you a cynic. And if you’re always a cynic, that pretty much makes you an asshole.”
Exactly right.
Just because everyone hates an asset doesn’t mean it’s a buy. And just because everyone loves something doesn’t mean it’s time to sell.
The setup only matters when price confirms the turn.
That’s the difference between being contrarian and being early and wrong.
Take February 2020, for example. We were already selling stocks — especially Tech — and rotating into bonds as a safety trade. Then The Economist came out with this gem: stampeding robot bulls on the cover.
Perfect.
We didn’t need their validation, but it confirmed exactly what the data was already telling us. The Nasdaq fell apart shortly after. They blamed COVID. We knew better.
The signs are always there — if you know where to look.
So keep your eyes on the big four:
Journalists. Analysts. Asset Managers. Economists.
When they’re all leaning the same way…
You already know what to do.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs