Contrarian Investing: Peak Asset Management in Louisville, CO

“If you don’t know who you are, [the stock market] is an expensive place to find out.”
—Adam Smith, The Money Game

At Peak Asset Management, one of our core values is Independence: Don’t Follow the Herd. For over 30 years, our Louisville, CO investment management team has worked hard to put that value into practice through our disciplined approach to contrarian investing.

Contrarian investing strategies are often misunderstood. It’s not about being different for the sake of being different. From our perspective, it’s about having the emotional fortitude and discipline to follow a sound investment strategy regardless of what’s happening in the broader markets, economy, or wealth management industry.

In practice, that strategy means owning the individual stocks of high-quality businesses—companies with strong management teams, fortress-like balance sheets, and consistent free cash flow generation even if they’re temporarily out of favor.

The Many Flavors of Contrarian Investing

There’s more than one way to be a contrarian investor, and our approach blends elements from several different styles:

1. Value Investing: Seeking out stocks with depressed valuations or temporarily out-of-favor companies.
2. Quality or Growth at a Reasonable Price: Buying exceptional businesses when sentiment has turned against them and stock prices diverge from the underlying fundamentals.
3. Event-Driven: Taking advantage of market overreactions to news, corporate earnings, restructurings, or spin-offs.
4. Behavioral Discipline: Staying the course and even adding to positions when headline news is overwhelmingly negative.

The common thread: markets are not perfectly efficient, and from time to time, asset prices can become mispriced.

While analysis matters, we believe having a contrarian edge is often emotional rather than purely analytical. Knowing “who you are” as an investor—and sticking to that identity when the crowd is running in the opposite direction—is what enables contrarian strategies to work over time.

Peak Asset Management’s Contrarian Investing Philosophy

“The big money is not in the buying or the selling, but in the waiting.”
—Charlie Munger

At Peak Asset Management, our contrarian investing philosophy rests on three core principles:

1. Keep it simple. Often, doing less—or “sitting on our hands”—is the best approach.
2. Be independent. Avoid the herd and stay focused on businesses, not fads.
3. Buy cash flow, not just stock tickers. The reason to buy a business is to own a share of the cash flow it generates.

These principles guide us away from the endless churn of “products” created by Wall Street. Investment fads come and go, but companies that produce goods or services people need and want is the backbone of true wealth creation.

In a world full of complex strategies and short-term noise, our contrarian approach favors individual stock selection and high-conviction, low-turnover portfolio management.

Our Contrarian Stock Selection Process

Our process starts with narrowing the field, utilizing the following techniques:

• Fundamental Screens: We identify a short list of high-quality businesses with strong management teams,  healthy balance sheets, and durable cash flows.
• Margin of Safety: Our goal is to identify gaps between a stock’s market price and our assessment of the business’ intrinsic value—often created by temporary pessimism or market dislocations.
• Concentrated Portfolios: We typically hold 20–25 stocks. That’s enough for diversification, but also focused enough for each position to matter. Many active managers hold 40–50 stocks, creating “closet index” portfolios.
• Low Turnover: Patience is central. The compounding effect Munger referred to in the quote above works best over decades, not quarters.

The Benefits of a Contrarian Approach

Contrarian investing isn’t about “winning” short-term trades—it’s about long-term, sustainable compounding. Some of the key benefits include:

• Owning Quality at a Discount: Periods of fear often create entry points into outstanding businesses at attractive valuations.
• Reducing Behavioral Mistakes: Knowing what we own and having the discipline to remain invested and avoid panic-selling during market downturns.
• Minimizing Taxable Events: High-conviction, low-turnover strategies tend to generate fewer taxable events.

Why Louisville, CO Investors Choose Peak Asset Management

We invest the same way for ourselves as we do for our clients. That alignment skin in the game means we experience similar outcomes alongside you.

Our team of CFA® Charterholders bring decades of experience, but we also bring patience, perspective, and the ability to look beyond the headlines. Over a multi-decade horizon, that discipline is what allows our contrarian investment philosophy to work.

Case Study: Booking Holdings (BKNG)

Our investment in Booking Holdings in early 2022 is an example of contrarian investing in practice.

At the time, fears about a post-COVID travel slowdown and rising recession risk had negatively impacted Booking Holding’s stock. Newspaper headlines focused on inflation, an economic slowdown, and the Federal Reserve tightening interest rate policy. Many investors assumed travel demand would never fully recover. 

Our insights concluded:

“Humans are social creatures who will ultimately spend less time on Zoom and more time making dinner reservations, visiting friends and family, and adventuring around the world. Our belief is that the continued reopening of the global economy, combined with Booking Holding’s fantastic fundamentals, make it an attractive business to own for the long-term.”

Since then, travel demand has rebounded, and Booking has generated robust free cash flows.

Getting Started with Peak Asset Management

If you’re interested in contrarian investing, our team would be happy to talk.

Whether you’re looking to better understand what you currently own in your portfolio, reduce emotional decision-making, or build a portfolio of high-quality businesses for the long-term, our philosophy is built for investors who value transparency, independence and patience.

Contact us to learn more about how Peak Asset Management puts its contrarian investing approach to work.