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Crisis Contrarian Investment Framework

Reusability

Investment approach that involves buying assets when everyone else is selling during market crashes or crisis periods

How It Works

Works because markets overreact to negative news, creating temporary mispricing of fundamentally sound assets. Fear drives prices below intrinsic value.

Components

1

Identify quality assets trading at discount due to market fear

2

Analyze whether problems are temporary vs structural

3

Dollar cost average during the downturn

4

Maintain conviction during continued decline

5

Hold through recovery cycle

When to Use

During market crashes, sector-specific crises, or when quality assets face temporary headwinds but underlying business remains strong

When Not to Use

When fundamental business model is broken, during structural industry decline, or when you lack conviction in asset quality

Anti-Patterns to Avoid

Trying to time the exact bottomInvesting without understanding the fundamentalsPanicking and selling during continued declineNot having sufficient cash reserves to average down

Example

Father bought real estate for $150k that sold for $225k three months prior. When it dropped to $75k sixty days later, he bought more instead of panicking. One duplex bought for $88k now generates $1900/month rent.