The central idea of The Art of Contrary Thinking is to accept, humbly, that most opinions are ill-formed--including our own. Opinions are emotional, imitative, and usually driven by contagion, either from other people or from propaganda. Worst of all, opinions are usually built upon embarrassingly little thought, yet we aggressively defend, justify and rationalize them.
The practice of contrary thinking "is a way out" as the author puts it. The techniques of contrary thinking range from automatically adopting the opposing belief, to reversing the arrow of cause and effect, to flipping a problem around several different ways to consider it from several angles.
In other words, this book teaches you to install a deceptively simple, preemptive subroutine into your thinking--a near-miraculous subroutine that automatically causes you to resist herd thinking, prompts you to seek opportunity where none seems apparent, and even helps you resist propaganda.
Charlie Munger, one of my investing idols, frequently used the phrase "Invert, always invert!" which tightens the essential ideas of this book down to three words. Investment writer Cody Willard uses an even tighter verbal prompt with his phrase "flip it." Both expressions act as cues to think in a contrary way: to change around your perspective or assumptions to get you to think more deeply. In investing, remember, there is always somebody on the other side of your trade. If you're buying a stock, by definition someone else is selling. So what is that guy thinking? If you can't flip around an investment idea and rigorously consider all the contra-arguments, you'll be quickly and rudely separated from your money.
Author Humphrey B. Neill goes so far as to say that if you become a contrary thinker "you become more contented in your everyday life, and more relaxed in your thinking." It's true! Once you realize, deeply, how malnourished your (and everyone else's) thinking really is, you start to form far fewer opinions. You start to make far fewer predictions--which, if we're really honest with ourselves, are just going to be opinions that we misremember in the future so they match the reality that actually happened. Thus it trains you away from falling in love with your thoughts, predictions and opinions, and therefore helps you adapt more quickly and efficiently to reality.
Best of all, it frees you from the traps of others' opinions and predictions too. It's like a delicious red pill that helps you tune out (or as we would say in the investment world, "fade") the entire punditocracy.
This is a goddamn Swiss army knife of thinking.
A word of caution: people may interpret contrary thinking as a lazy form of automatic disagreement (thus the expression "a knee-jerk contrarian," which is one of the more condescending things you can be called on Wall Street). In fact a genuinely cynical reader might say it's a thinking habit that presumes people are idiots. But I'd counsel readers instead to see contrary thinking as a sort of fundamentals drill like you'd use in a sport: think of it like a mental kata that you practice every day, to avoid the all-too-common habit of thinking that you're thinking when you're not.
The Art of Contrary Thinking can be repetitive: it's a collection of short essays, and from time to time they touch on similar ideas. But as with other books reviewed on this site, this repetition is a help and a blessing: it helps you groove the ideas and techniques, making them natural and habitual.
Finally, the author offers readers a wonderful reading list over the course of the book through various little comments dropped throughout the text ("make sure you get a copy" of that book, or "this wonderful book is hard to find," and so on). I've assembled all the recommended titles into a convenient list at the end of this post.
Notes:
1: "Sameness of thinking is a natural attribute... Obvious thinking--or thinking the same way in which everyone else is thinking--commonly leads to wrong judgments and wrong conclusions." Thus the epigram "When everyone thinks alike, everyone is likely to be wrong."2: On distinguishing between when people act as individuals and when they act as a crowd, especially "when some occurrence arises that has wide emotional appeal." [The crowd typically has a different dynamic: more hypocognitive, more emotional, more contagious.]
4: On how history repeats: one can learn a vast amount about mob psychology by studying past episodes of manias, mob behavior, etc.
5: The art of contrary thinking consists in training your mind to ruminate in directions opposite to general public opinions; but weigh your conclusions in the light of current events and current manifestations of human behavior."
5: Also a final note in this introduction on using contrary thinking "in order to avoid being entrapped by the propagandists."
9: "The purpose is to contest the popular view, because popular opinions are so frequently found to be untimely, misled (by propaganda), or plainly wrong." "Too many predictions spoil the forecasts" because counteracting policies are adopted to offset expectations.
9-10: Contrary thinking is a way of thinking but "let's not overweigh it"... It's really just an antidote for failing to think through things carefully; it helps offset human traits of imitation, fear, contagion, habit, credulity, pride of opinion, wishful thinking, etc. Also on idea that a crowd yields to instincts that an individual acting alone would repress and that people instinctively follow the impulses of a herd, they are susceptible to "contagion" in thinking, and also people play "follow the leader." All of these things make people susceptible to suggestion and emotional motivation. Also a very good quote here: "A crowd never reasons."
11: [The author doesn't phrase it this way but he works through an example here of meta-reading propaganda or meta-reading a government speech or pronouncement]: On not thinking simply what is in the message (let's call that information layer 1) but asking information layer 2 questions like "why is the message circulated?" "What are the reasons behind it, not just the reasons in it?"
Section I: It Pays To Be Contrary
15: This chapter explains the theory behind "contrary opinion" and explains its usefulness.
15: "You will have to forgive the author if he makes generous use of the vertical pronoun because much of what follows is personal history." [Vertical pronoun, good one.]
16: "I find more and more that it is well to be on the side of the minority, since it is always the more intelligent." --Goethe [In investing, if you can become comfortable with being in the minority, as well as patient, you will do very well.]
16ff: The author's experience with Wall Street dating back to the 1920s: his frustration with chart reading, that charts can be used to say anything, or worse, they're "silent" when everyone's in a quandary about what prices will do; he learns [as we all do!] that his own judgment was often "unprofitably faulty"; he does a deep dive into old books on speculation and manias [this is something any student of investing must do: complete a reading list of the key books on the history of manias: I'd suggest starting with Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay]
19: The author sums up three lessons that he learned through his mistakes:
1) individual opinions are of little value because they're so frequently wrong
2) human traits like pride of opinion, fear, hope, greed and wishful thinking prevent one from being objective, they make people reach opinionated conclusions
3) he learned the risk of standing on one's opinion, no trait is stronger than defending one's opinion and being unwilling to admit error.
20: He uncovered the truism that the crowd is usually wrong, and then arrived at the solution to simply go opposite to crowd opinion.
21: On fighting against your personal viewpoints, on how you may "misjudge public opinion because of your preconceived opinions"; it enables you "to submerge the human traits that are the enemies of clear thinking" [the author doesn't say it this way exactly but somehow you have to detach and lose your egoic attachment to any view you might have about, say, an economic situation or a given political or social issue].
22: "How do I go about finding what the public opinion is?" [This is similar to trying to understand what the consensus thinking is with a given investment] By reading the news, by consuming media, but also understanding what certain groups want us to accept and believe; see for example the US President's Council of Economic Advisors, or the Chamber of Commerce of the United States, etc., these are basically interest groups that may promulgate a view that they want you to hold ["The banking system is sound" or "A strong dollar is in the interest of the United States" and so on]. [What he's getting at here is how to identify what consensus is by not necessarily asking what the people you know think: there are many, many other indirect ways to learn it; for example, what is it that your government wants you to believe? which often, unfortunately, becomes consensus. Certain "consensus" phrases like "safe and effective" come to mind here.]
24: The author tells an amusing story about how in the years following World War II there was a widely-held expectation of a slump coming and it never came; but it was always just around the corner, but it still never came. And then, "By mid 1955 the idea that 'a slump is just around the corner' had swung full circle to the thought that 'There'll never be another serious slump.'" which was a new idea that yet again could be looked at from a contrarian perspective.
27ff: The author goes through some examples of stock prices in the US and Great Britain before and during World War II to show "interesting examples of how prices reflected future developments months ahead of what was 'logically' feared or expected" [He means here the so-called logical expectations of the consensus, which turned out to be wrong]: See for example the surprise of the New York Stock Exchange going up on the day Hitler marched into Poland; Hitler then "sat out" the winter of 1939-1940, but in May 1940 he invaded Holland and Belgium; everyone thought the market would go up again, but it actually did nothing, which humbled both the consensus and the people who were contrarians. Two weeks later the market declined 45 points when Germany invaded France, everyone woke up to the realization that everyone was wrong about Hitler and the Nazis, then US and British stock prices hit bottom in June of 1940--this also should have been enlightening. Note also the British prices never stopped their advance until 1947(!) even though back in 1940 things looked hopeless for Great Britain. Likewise there was a parallel with US stock markets in that they bottomed with the fall of Corregidor. "Stock prices had a far keener foresight than we, the people!"
31ff: Discussion of the 17th century tulipmania in Holland [Note that in recent years the entire tulip mania event has been exposed as a psyop that never actually happened]; reference to John Law's Mississippi Scheme in France and the South Sea Bubble in England in the early 1700s; all examples of crowd psychology and group hysteria.
34ff: Gustav Le Bon and his book The Crowd: A Study of the Popular Mind where he explains the behavior and actions of a crowd, how it differs from an individual who is likely to reason and analyze; crowds always act on feeling and emotion and they fellow leaders "or what they assume to be the actions of leaders." [An interesting distinction right there]; Le Bon and his idea of crowd contagion: how public opinion is frequently wrong which is often illustrated in the stock market; on a crowd's susceptibility to suggestion and how suggestions also are contagious; Le Bon writes, "...a crowd, as a rule, is in a state of expectant attention, which renders suggestion easy." Crowds think in images which call up a series of other images.
38: Good quote from Le Bon's book The Psychology of Socialism: "Now the great power of beliefs, when they tend to assume this religious form... lies in the fact that their propagation is independent of the proportion of truth or error that they may contain, for as soon as belief has gained a lodging in the minds of men its absurdity no longer appears."
38ff: On inflation, which reflects crowd behaviorism and its greed, fear and cupidity; citing different inflationary periods: the fiat money inflation in France of the 18th century and "the false illusion that inflation is prosperity swept through France."
43ff: On the idea of acting contrary to government statements about inflation or government statements about interest rates: see for example 1950s USA, where the Treasury kept beating the drum for low interest rates, as low as two and a half percent for the 10-year, but rates then went higher [and by the way, inflation was higher than this throughout the entire period: you could argue that the proper play ever since World War II was to trade contrary to Central Bank interest rate policy the whole time!]
43ff: Asking the question is the public always wrong? This is the wrong question: the right question is, is the public wrong all the time? Decidedly no, in fact "the public is right more of the time than not... the public is right during the trends but wrong at both ends!" "So, to be cynical, you might say, 'Yes, the public is always wrong when it pays to be right--but it is far from wrong in the meantime.'"
45: On how you never get the timing right with the contrary opinion [and therefore to be second-order about it, you must enter into your decisions knowing you won't get the timing right]. "It is to be noted that the use of contrary opinions will frequently result in one's being rather too far ahead of events... Therefore, when we adopt a contrary opinion, as a guide, we must recognize that we may be too far ahead of the crowd." [And so you enter your decisions knowing that you're probably early...]
46: On the intangibility and the difficulties of using the contrary theory; it's often perplexing and often perverse, it is contrary to one's natural reactions, "...others with whom you discuss your contrary opinions will almost always violently disagree." [Holy cow is that ever the truth: I know this from many many personal experiences, to the point where it's actually a cue to look for: you want to see either aggressive disagreement or complete blank stares from people and then you know you're on to something: your investment idea really might have legs for example.]
48: "...it is far easier to be contrary to general opinions than it is to create original thought." [Again, what a legit cheat code to life!]
Section II: Essays Pertaining to the Theory of Contrary Opinion and the Art of Contrary Thinking
51ff: War as a type of contagion that unifies the herd against a threat; note that a prolonged or intense "war sentiment" is difficult to produce if the war is for defensive reasons: the wave of enthusiasm peters out and the people begin resisting the wartime rules, restrictions and constraints.
54: The author quotes an investment publication, "The average investor does not think--and does not wish to think." The author then predicts that "contrary opinions will remain valid as a guide until public psychology changes--and it has not changed in centuries." Ouch!
55: Reiterating that contrary thinking will often make you early to the theme, and that the crowd is not always wrong but almost always wrong at changes/reversals in market trends. "Your watch is still useful, although it may run fast; you allow for the error and recognize that you may be early for appointments, but you do not miss the train." [Nice quote.]
55-57: On using contrary thinking to keep us from bad mental habits or cognitive habits, to keep us out of "rut-thinking" [e.g., allowing our thinking to get into a rut, or be lazy or habitual].
57ff: On the psychology of inflation, referring to Frank Parker Stockbridge and his book Hedging Against Inflation; citing a long tradition in history of canceling debts and reducing the value of currency, and how there's a generalized psychology of inflation that is important to study. Interestingly the author cites the 1930s under Roosevelt, where we went off the gold standard, with "the public went serenely on its way, paying little heed" to the risks of inflation. Thus the correct play here was to fade the crowd and prepare for inflation. Then the author gives an example from the opposite direction a decade and a half later: there was a wide consensus that monetary policy was causing inflation and doubts about the dollar developed. Then, the contrary view again worked: runaway inflation didn't actually happen, there was inflation it never became catastrophic.
60ff: When there is no public opinion; "When everyone ignores a vital subject, it is likely to be important to everybody." [The idea here is meta: you pay attention to the things the crowd is not paying attention to, and--perhaps more important (and more shocking if you think about it)--never pay attention to things the crowd is paying attention to! There are so many ramifications here: you can tune out all the news, ignore all media events since they are almost certainly Daniel Boorstin-type pseudo-events, etc].
62: Also on the idea of anticipating the public's reaction later: that what is likely to happen is that the public won't pay attention to something, and then really will pay attention to it later, likely after the risk or the event is over or already fully embedded into expectations. Thus you can largely predict the likely behavior and reaction of the public, and act contrary to it before, during and after.
62ff: On [the lamentably surnamed] Gabriel Tarde's book The Laws of Imitation: talking about how history reveals that it's a fallacy that the majority set the pattern in trends of religious and social and economic life, rather the majority copies or imitates the minority and this is what establishes trends. It's the imitation that's key: you see it in criminal conduct, in development of language, art, law and institutions; [obviously we see it with people aping and imitating behavior they see in movies or on TV; certainly imitation is present in the stock market too]. See also this quote that the author shares from Tarde's book: "we do have epidemics of luxury, of gambling, lotteries, of stock speculation, of gigantic railroad undertakings, as well as epidemics of Hegelianism, Darwinism, etc." to which the author adds "today he would doubtless add Communism and Socialism."
64: From Theodore Burton's book Financial Crises and Periods of Industrial and Commercial Depressions, another book the author strongly recommends: Burton cites Clement Juglar, saying that countries that experience the most suffering from economic disturbances tend to show the greatest increase in wealth and material prosperity. [This is interesting to think about, it's sort of like thinking of a country or an economy like a high-volatility stock.]
66ff: On the "gregarious opinion" and the idea of "gregarious man": referring to the herd instinct in humans; man is intolerant and fearful of solitude, either physical or mental; he's also more sensitive to the voice of the herd than any other influence and "he is subject to passions of the pack in his mob violence and the passions of the herd in panics." Likewise he's susceptible to leadership [of the pack], and "his relations with his fellows are dependent on the recognition of him as a member of the herd."
68ff: Good and sobering quote here from Albert Jay Nock on the universal education system: "if it had done nothing to raise the general level of intelligence, it had succeeded in making our citizenry more easily gullible. It tended powerfully to focus the credulousness of homo sapiens upon the printed word..." and since we were taught to believe what "we read in our school books and what our teachers told us, we bred the habit of 'unthinking acquiescence' rather than exercising such intelligence as we may have."
70ff: Using contrary thinking to avoid thinking too short-term: different examples here of how events shape policy and decisions rather than the other way around; thus the contrary thinking metaquestion here is: "This [idea/policy/law] may be very well for the short term, but how will it work over the long term?" [This is interesting: it gets you to step out of your reaction to a thing and gets you thinking in terms of second-order consequences.]
76ff: On propaganda devices, see Clyde Miller and his book The Process of Persuasion; four simple devices to achieve the acceptance or rejection of ideas or beliefs:
1) the acceptance or virtue device: to cause us to accept by association with good words, symbols, acts
2) the rejection or poison device: to cause us to reject by association with bad words, symbols, acts
3) the testimonial device: accept or reject according to good or bad
4) the together device: using pressure of a group or of mass emotion and action
[Note once again the author makes the case that contrary thinking is valuable in seeing through propaganda]
79: Again on avoiding the trap of using a contrary opinion to defend what you already think. Don't use contrary thinking to support your personal opinions. "Let us adopt a policy of avoiding personal opinions we have to uphold!" [The cheat code here is to train yourself to automatically reject what you "already think."]
79: On rendering advice: "I believe it to be a true psychological fact that one cannot be objective and at the same time render advice. You cannot be personal and impersonal at the same time. When one offers advice his mind is naturally focused on 'hoping' to make the advice come right, rather than on the objective and realistic viewpoints that might influence the advices." [Another takeaway here: as you embrace contrary thinking, it not only teaches you to have fewer opinions and make fewer predictions, it causes you to offer less advice. Reminds me quite forcefully of Ramana Maharshi's quote "It is best to remain silent."]
82: Asking "what's right" instead of asking "what's wrong" to invert an economic or political question: see for example a conversation where someone is sure to ask "What's wrong with business today, anyway?" and instead to flip it. What's right with the stock market/what's right with the economy, etc, "you will get an entirely fresh slant on things. Your mind will travel in different channels."
90ff: The author thinks back to the 1884 election between Blaine and Cleveland: during that election cycle Blaine was caught up in a widespread revolt against the sins of the Republican party in those days. The author went through 1884-era issues of the Financial and Commercial Chronicle and saw a hardly any mention of the campaign. 1884 also witnessed a severe but brief stock market panic, note also Ulysses S. Grant's brokerage firm Grant & Ward collapsed that year, thanks to Ward's crookedness.
92ff: On the US leaving the gold standard during the Civil War and then returning to it in 1879. "There were widespread fears as the resumption date of January 2nd, 1879, drew near. Many expected to see a 'run' on gold, with greenbacks piled counter-high in banks as people demanded gold for their paper dollars. All fears were groundless. Contrary to the expectations of many groups the government actually gained gold on the first day of resumption. When folks still found they could get gold, they didn't want it! Paper was easier to carry in their pockets."
96ff: On waves of public opinion; see for example during this book's era there was a wave of internationalism which "engulfed public thought in this country"; one should cue oneself to think contrary to these waves; often society is carried away on such "waves" of thought.
97ff: On when to be contrary, and what intensity of general opinions should we look for [to be contrary to]? How to measure opinions? [Basically here the author is talking about application of the theory.] The author describes a basic usefulness of contrary opinions which is "to guard against predicting the unpredictable" and "avoid being ensnared by faulty general predictions", thus "the theory is more valuable in avoiding errors in forecasting than in employing it for definitive forecasting." [I would add here that it is incredibly difficult to train yourself to not come to conclusions about what's going to happen in the future--this is a really good epistemic exercise, a good exercise of humility to remain in a place of "not knowing" and acting accordingly.]
100: On "the law of the necessity of errors in forecasting" [well phrased!]: the author quotes an article by Albert Hahn about the "forecasting mania of our time": "Until about 1930 serious economists were not so bold--or so naive--as to pretend to be able to calculate the coming of booms and depressions in advance." Note also how "the forecasting mania of our time" assures the usefulness of the contrary opinion of not making forecasts.
103: On elections and mass opinion: as much as 1/4 to 1/3 of votes can be undecided leading up to an election and this group of people may move as a herd, typically as a result of emotional motivation, not reasoning, thus the undecided mass may move in one composite direction when the election happens. Thus with a movement of this kind either candidate may win by a landslide and thus a general opinion of "there will be a close election" will be wrong.
105ff: [Tangent here on "money minds," people in the tiny minority who are money-makers in any given community. It's not quite clear how this pertains to contrary thinking however.] "Nature has been frugal in dispensing this [money-making] aptitude, but has seen to it that it appears sparingly within groups wherever situated." On money making as a mental characteristic: difficult to acquire, one is typically born with it, if you have this aptitude "it makes little difference whether 'conditions' are rising, falling, or stabilizing [you will still make money/find opportunity]." Many with this aptitude are uneducated, education has nothing to do with it.
107: More on forecasts, and a really good self-referencial heuristic right here: "...the more prominence predictions receive the more inaccurate they are likely to be." Also: "If you believe the predictions, you act against them to protect yourself."
108ff: On revolutions, how they require a long view; see Gustav Le Bon in his book The Psychology of Revolution where he says "The true revolutions... are most frequently accomplished so slowly that the historians can hardly point to their beginnings." Basically the author shoots down the idea that there would be some sort of revolution in Russia to undo Communism, the system there is now simply well entrenched [which it was in the 1950s when this book was published].
110ff: Laws of imitation and contagion, again bringing up Gabriel Tarde's book The Laws of Imitation: the importance of paying attention to people's tendency to imitate and the typically involuntary imitation that happens: either we imitate or we anti-imitate [basically we do the opposite, counterimitating, a kind of reactance I guess you could call it]. Typically people do not show volition in either of these cases.
113ff: Interesting notion here about how the early entrepreneurs in the early decades of the USA were so successful that they created these large enterprises that turned into instruments of conformity. Suddenly you're looking at an employee who is being considered for advancement and you're asking "is he a company man?" In other words, is he an individualist or will he conform? Jeez, what a paradox. "As the majority are happier when they conform, there will always be a supply of 'company men.'"
116ff: On looking two ways at once, on thinking contrary to the consensus about, say, the economy, but then automatically thinking about the recovery that would follow a downturn (or vice versa, a slowdown that would follow a boom). Here, thinking contrary helps you think about the inevitable change that will happen, the response to the current trend. Again as always this isn't a prediction and it certainly doesn't have an element of timing, it's just preparing for both of these eventualities, the one trend leading to the other. Thus contrary thinking trains us to recognize that there will be change in the current cycle, leading to the next part of the cycle.
121ff: Again on how the prevailing conditions produce the collective opinions (not the other way around as everyone seems to think); how "what was happening at the time was looked upon as the cause of events continuing to happen in the same pattern." [In other words, if there's a boom going on, most opinions will also be bullish, and vice versa.]
121ff: Another insight here on government intervention: it is usually caused by a prior condition or maladjustment (like a central bank cuts rates because of a slowdown). "Yet it is often looked upon merely as a current event, the reason for the interference being overlooked or disregarded." Contrary thinking here will get your probe behind the surface events to get at the causes, and will be "a constant reminder you that the present is a forerunner of change."
124ff: On how events are unpredictable and not knowable, and this confusion gives us an excuse for not thinking. "I, contrarily, believe there is value in bewilderment." Note that the opposite of uncertainty and confusion is dogmatism, and far more errors arise from dogmatism. On the idea that during those times when you're confused and uncertain, you want to put the matter in the back of your mind and let it sort itself out over time. Basically don't "solve" or "resolve" the matter to resolve epistemic discomfort, instead, sit with the "not knowingness."
132: "When you analyze 'opinions,' to learn how they germinate, you find they commonly sprout from influences outside the mind. Seeds of (cursory) thought are planted by some happening, or propaganda, from which they often blossom into colorful opinions. Thus it is that mass opinions tend to follow, rather than to lead, 'events.'"
134: "The crowd is most enthusiastic and optimistic when it should be cautious and prudent; and is most fearful when it should be bold."
136: Three types of opinions: thoughtful, thoughtless, emotional. On determining under what circumstance the popular views originate, also on distinguishing also between an offhand reply or a thoughtful opinion in response to a question. "Emotional and thoughtless opinions spread widely from imitation and contagion."
136-7: Very interesting section here on how to cultivate a war spirit in a people: "The government doesn't go around quietly asking people if they wish to go to war. A series of charges against the 'enemy state' is trumped up; cries against the aggressor go fourth, as the propaganda machine gets in motion. An image is fashioned in the people's minds of this dangerous, armed 'imperialist' who is about to take their homes and ruin their existence." [This sure sounds familiar right now doesn't it? Various governments of the west have been doing this with either China or Russia for years now...]
142ff: Applying a Hegelian dialectic to contrary thinking: thesis, antithesis and synthesis: the thesis would be the generally-held opinion, the antithesis would be the contrary or skeptical analysis of that opinion, and the synthesis would be the conclusion that you arrive at which synthesizes the prevailing and the opposing viewpoints. "...the more I learn about the use of contrary thinking, the more I come to the conclusion that I have not always given enough weight to the idea of synthesis."
146ff: Applying notions of momentum and inertia: in psychology, in economics, etc. Usually in psychological influences the momentum (pushing or influencing someone) has to be subject to increasing intensity or the stimuli may tire or irritate people, or become unfashionable, etc.
150ff: On "depth manipulators": practitioners of "motivation research" to try to understand our motivations, who skillfully manipulate opinions or get you to buy products, take on beliefs, etc. See Vance Packard's book The Hidden Persuaders. On using contrary thinking to resist this.
152ff: On mass mesmerism [or as we might call it today mass formation in the language of Matthias Desmet]. Brought about by leaders (Hitler, Robespierre, etc.), or by ideas, like (Keynesian economics, communism, etc.) that are adopted by the crowd through constant affirmation and repetition. "Tell 'em again and again, without explanation or proof, and in time the crowd will believe what you tell 'em." ["Two weeks to flatten the curve" or "safe and effective" seem to come to mind here, I can't imagine why...]
156ff: The problem of knowing and measuring the prevailing general opinions: usually you do this by extensive reading and checking of newspapers magazines [today it would be television news and social media] in order to gauge opinion. Also you have to continually ask yourself: is this truly a generalized viewpoint, or is it perhaps a composite of my own views which the mirror misleads me to think are those of the crowd? Also note that people (especially business leaders, major CEOs or politicians) may express an opinion that they wish to be thought of as their beliefs, it doesn't reflect their actual true thoughts. [More thoughts on this: usually among your circle of acquaintances there will be a range of thinkers: some are very consistently consensus thinkers, others are a little ahead, others a little behind. You can actually observe the movement of an opinion across your social circle this way and use it to gauge or estimate prevailing public opinion.]
160ff: On how the theory of contrary opinion is not a system of forecasting, it is a method of working toward thought- conclusions. A "think stimulator" and a "sedative for over prophesying."
164: Another application of contrary thinking: investigating subjects or events of which the general public has little or no knowledge: see for example the study of money--people don't think about it at all, they just use money without considering the underlying monetary policies or economics.
166: Interesting example here of working through a consensus view that "rentable housing is a great inflation hedge" and then working out the contra case, which helps you arrive at all the things that can go wrong. This is a great example of working out the nuances of an investment to help you decide if it's worth doing or not.
169: On the uses and dangers of extrapolation: extrapolating statistical things like birth rates versus extrapolating crowd activity; also on the fallacy of automatically expecting today's trends to continue. Thus if the consensus view is extrapolatory, if it is "more of the same" then the contrary views would be "better than expected" or "worse than expected" for example.
1) establish the extrapolation
2) consider any conditions which conflict or nullify this trend
3) consider conditions or circumstances that would activate an even stronger trend than the consensus view
[I think if this like what would be the base case, bull case and bear case, and what might be the various drivers of each case? Note also, and note that the author also says this elsewhere in the book: that sometimes the crowd is right (thus "more of the same" is also often what happens), just remember that the crowd is usually really wrong at inflection points.]
176: The money-minded person who is well balanced thinks out money angles, probabilities for loss as well as profits, considers the risks, etc. Also such a person employs contrary opinions to guard against impetuous action. [Yep: you want to install mental subroutines to avoid FOMO for example!]
177ff: Conflicts, geopolitics, war applications of contrary thinking: a discussion here on how the Soviets handled the West/East relationship; this is an example of using contrary thinking as well, working out probable steps the West would likely take and then figuring out as many responses and procedures as they can; also in war where a good battle tactics involve general conceptual frameworks like "don't be where the enemy expects you" and "be where the enemy doesn't expect you" and "do the unexpected," etc.
182ff: Contrary thinking as a mechanism to practice association of ideas, moving from idea to idea in a chain reaction which is part of the art of creativity, concentrating and observing counter angles on news, on commentaries, on all the predictions that bombard us, etc.
183: "...others will often disagree (sometimes violently!) with your contrary viewpoints." [See the note for page 42 above as well. Over the years I've discovered that with investing and with specific investments the more rattled or angry or emotionally incontinent your view makes other people, the more potential it has...]
184ff: Interesting snippet here on focusing on words: in order to observe the workings of propaganda for example; also note that all opinions are expressed in words, they may have nothing to do with facts or they may mislead or distort facts, so being contrary to the words used can be extremely helpful. See for example company management reporting poor profits (which is a fact) but quickly pointing out all the conditions that forced those "poor profits" on them--that management isn't at fault, that some external factor is responsible, etc.
188: On detecting techniques of writing about business, finance or other topics as an indicator for both consensus thought and as a trigger for contrary thinking, and protection against brainwashing. "...adopt the plan of mentally checking everything we read."
Epilogue: Slaves to "They" by Samuel B. Pettengill
[This author was a former member of Congress in the 1930s who helped vote down FDR's "Court packing" plan, he's also a fellow Vermont resident with the author. The essay is cantankerous and forgettable, to put it diplomatically]
193: "The old time editors, country lawyers and David Harums have been laid away and their places taken by merged newspapers and centrally controlled nationwide television and radio chains." [Interesting to see this from the 1950s...]
To Read:
Garfield A. Drew: New Methods for Profit in the Stock Market
Humphrey B. Neill: Tape Reading and Market Tactics (1931)
Alexander Dana Noyes: The Marketplace--Reminiscences of a Financial Editor
Gustave Le Bon: The Crowd: A Study of the Popular Mind
Gustave Le Bon: The Psychology of Socialism
Robert L. Smitley: Popular Financial Delusions
***Wilfred Trotter: Instincts of the Herd in Peace and War
Everett Dean Martin: The Behavior of Crowds
William Henry Mikesell: Mental Hygiene
***Frank Parker Stockbridge: Hedging Against Inflation
***Gabriel Tarde: The Laws of Imitation
Theodore E. Burton: Financial Crises and Periods of Industrial and Commercial Depressions (1902)
Carl Snyder: Capitalism the Creator
Clyde R. Miller: The Process of Persuasion
Harry Elmer, ed: Perpetual War for Perpetual Peace
George Katona: Psychological Analysis of Economic Behavior
Francis Delaisi: Political Myths and Economic Realities, 1927
Ferdinand Zweig: Economic Ideas: A Study of Historical Perspectives
Herbert Spencer: Man Versus the State
Robert P. Crawford: Think for Yourself
Abram Lipsky: Man the Puppet: The Art of Controlling Minds
Vance Packard: The Hidden Persuaders
Stuart Chase: Guides to Straight Thinking
Edith Hamilton: The Greek Way
Edith Hamilton: The Roman Way