The Contrarian Investor: False trough spotting

I would like to introduce a brand new term called 'false trough spotting'. As a paid-up contrarian, it is my duty to find an asset class that is troughing in price and then declare it as a 'bottom fishing' opportunity.

This argument usually involves accepting that something approaching a boom has preceded this moment of opportunity, but now that everyone else has capitulated, the cycle is complete and the only way is up. So convincing does the opportunity suddenly seem that one becomes almost evangelical. A while ago, I noticed Barings was punting the idea that although China's appetite for all manner of things dug and drilled out of the ground was a tad subdued, other countries, such as Brazil, Indonesia and India, were increasing their consumption of materials. Crucially, though, we may be witness...