Contrarian investors buy and sell shares against prevailing market sentiment. Their investment strategy is to go against the crowd by buying poorly performing stocks at valuations they find attractive and then selling them at a later time when their valuations have recovered. Contrarian investors often point to research in behavioural finance suggesting that investors tend to pay too much attention to recent trends. A contrarian investor tries to determine whether the current value of an individual company, industry, or entire market is irrational—that is, undervalued or overvalued at any time—and whether that irrationality represents an investment opportunity.

Both contrarian investors and value investors who do not describe their style as contrarian aim to buy shares at a discount to their intrinsic value. The primary difference between the two is that non-contrarian value investors rely on fundamental metrics (looking at the share itself) to make their assessments, while contrarian investors rely more on market sentiment and sharp price movements to make their decisions.