{"id":39800,"date":"2025-09-12T14:00:00","date_gmt":"2025-09-12T06:00:00","guid":{"rendered":"https:\/\/www.tejwin.com\/?post_type=insight&#038;p=39800"},"modified":"2026-03-03T13:10:16","modified_gmt":"2026-03-03T05:10:16","slug":"when-others-fear-i-enter-anthony-melias-contrarian-strategy-for-winning-in-the-market","status":"publish","type":"insight","link":"https:\/\/www.tejwin.com\/en\/insight\/when-others-fear-i-enter-anthony-melias-contrarian-strategy-for-winning-in-the-market\/","title":{"rendered":"When Others Fear, I Enter: Anthony Melia\u2019s Contrarian Strategy for Winning in the Market"},"content":{"rendered":"\n<figure class=\"wp-block-image aligncenter size-full caption-align-center\"><img fetchpriority=\"high\" decoding=\"async\" width=\"2333\" height=\"2333\" src=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/markus-spiske-XFfnlLoBSX8-unsplash-edited.jpg\" alt=\"\u5b89\u6771\u5c3c\u00b7\u8ce3\u5229\u4e9e \u7684\u53cd\u5411\u5e02\u5834\u81f4\u52dd\u8853\" class=\"wp-image-38406\" srcset=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/markus-spiske-XFfnlLoBSX8-unsplash-edited.jpg 2333w, https:\/\/www.tejwin.com\/wp-content\/uploads\/markus-spiske-XFfnlLoBSX8-unsplash-edited-300x300.jpg 300w, https:\/\/www.tejwin.com\/wp-content\/uploads\/markus-spiske-XFfnlLoBSX8-unsplash-edited-1024x1024.jpg 1024w, https:\/\/www.tejwin.com\/wp-content\/uploads\/markus-spiske-XFfnlLoBSX8-unsplash-edited-150x150.jpg 150w, https:\/\/www.tejwin.com\/wp-content\/uploads\/markus-spiske-XFfnlLoBSX8-unsplash-edited-768x768.jpg 768w, https:\/\/www.tejwin.com\/wp-content\/uploads\/markus-spiske-XFfnlLoBSX8-unsplash-edited-1536x1536.jpg 1536w, https:\/\/www.tejwin.com\/wp-content\/uploads\/markus-spiske-XFfnlLoBSX8-unsplash-edited-2048x2048.jpg 2048w\" sizes=\"(max-width: 2333px) 100vw, 2333px\" \/><figcaption class=\"wp-element-caption\">Photo by Markus Spiske on Unsplash<br><br><\/figcaption><\/figure>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d8f5d8449a6\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d8f5d8449a6\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tejwin.com\/en\/insight\/when-others-fear-i-enter-anthony-melias-contrarian-strategy-for-winning-in-the-market\/#Introduction\" >Introduction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tejwin.com\/en\/insight\/when-others-fear-i-enter-anthony-melias-contrarian-strategy-for-winning-in-the-market\/#Strategy_Logic\" >Strategy Logic<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tejwin.com\/en\/insight\/when-others-fear-i-enter-anthony-melias-contrarian-strategy-for-winning-in-the-market\/#Retrieve_TEJ_Data_Fields\" >Retrieve TEJ Data Fields<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tejwin.com\/en\/insight\/when-others-fear-i-enter-anthony-melias-contrarian-strategy-for-winning-in-the-market\/#Link_to_Full_Source_Code\" >Link to Full Source Code<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tejwin.com\/en\/insight\/when-others-fear-i-enter-anthony-melias-contrarian-strategy-for-winning-in-the-market\/#Further_Reading\" >Further Reading<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tejwin.com\/en\/insight\/when-others-fear-i-enter-anthony-melias-contrarian-strategy-for-winning-in-the-market\/#Related_Links\" >Related Links<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Introduction\"><\/span>Introduction<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In financial markets,&nbsp;<em>Contrary Thinking<\/em>&nbsp;is a timeless strategic wisdom. It stems from a simple yet profound observation: when most people are overly optimistic, the market is often overheated; when the crowd falls into fear, it may actually present a buying opportunity. However, contrarian investing has long remained at the level of a proverb, lacking concrete and quantifiable standards of action, making it difficult to implement in practice.<\/p>\n\n\n\n<p>Anthony M. Gallea and William Patalon III, in their book&nbsp;<em>Contrarian Investing<\/em>, were the first to translate contrarian strategies into executable, quantitative stock-picking methods. Gallea, a Senior Portfolio Management Director at Salomon Smith Barney, led a team of more than 14 professionals managing over $600 million in assets. Patalon, an experienced business journalist, is a four-time recipient of the New York State Associated Press Business Writing Award. Together, they leveraged their extensive practical and observational experience to construct a stock selection methodology that combines theoretical depth with practical applicability.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Strategy_Logic\"><\/span><strong><strong>Strategy Logic<\/strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>This strategy employs a multi-layered screening logic that integrates technical, ownership, and fundamental factors to identify stocks with medium-term growth potential.<\/p>\n\n\n\n<p>First, on the&nbsp;<strong>technical side<\/strong>, it screens for stocks whose closing price over the past year is less than 50% of their 12-month high, treating them as candidates with potential for reversal momentum.<\/p>\n\n\n\n<p>Next, under&nbsp;<strong>ownership conditions<\/strong>, if directors or executives have increased their holdings by at least 5% in the past six months, or their shareholding has already reached over 10%, the stock is considered as having clear insider confidence and is included in the selection. In addition, significant buying activity from institutional investors carries the same weight.<\/p>\n\n\n\n<p>If the ownership conditions are satisfied, the company is further evaluated for&nbsp;<strong>fundamental advantages<\/strong>, requiring it to meet at least two of the following four criteria:<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Price-to-Earnings (P\/E) ratio below 85% of the industry average<\/li>\n\n\n\n<li>Price-to-Free Cash Flow ratio &lt; 1.0<\/li>\n\n\n\n<li>Price-to-Book Value (P\/B) ratio &lt; 0.8<\/li>\n\n\n\n<li>Price-to-Sales (P\/S) ratio &lt; 1.0<br><\/li>\n<\/ul>\n\n\n\n<p>After selecting the target stocks, the total capital is allocated on an equal-weighted basis to achieve risk diversification and to avoid concentrating excessive funds in a single stock.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Retrieve_TEJ_Data_Fields\"><\/span>Retrieve TEJ Data Fields<br><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Data Code<\/strong><\/td><td>close_d<\/td><td>adjfac<\/td><td>fld005<\/td><td>qfii_pct<\/td><td>fd_pct<\/td><td>ri<\/td><\/tr><tr><td>Field Name<\/td><td>Closing Price<\/td><td>Adjustment Factor<\/td><td>Director Shareholding %<\/td><td>Foreign Institutional Ownership %<\/td><td>Mutual Fund Ownership %<\/td><td>Recurring Income<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Data Code<\/strong><\/td><td>shares<\/td><td>per<\/td><td>cscfo<\/td><td>cscfi<\/td><td>r307<\/td><td>r19<\/td><td>open_d<\/td><\/tr><tr><td>Field Name<\/td><td>Outstanding Shares<\/td><td>P\/E Ratio<\/td><td>Operating Cash Flow<\/td><td>Investing Cash Flow<\/td><td>Net Asset Value per Share<\/td><td>Revenue per Share (TTM)<\/td><td>Opening Price<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"566\" src=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/\/ee-1024x566.png\" alt=\"\u5b89\u6771\u5c3c\u00b7\u8ce3\u5229\u4e9e \u7684\u53cd\u5411\u5e02\u5834\u81f4\u52dd\u8853\" class=\"wp-image-38423\" srcset=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/ee-1024x566.png 1024w, https:\/\/www.tejwin.com\/wp-content\/uploads\/ee-300x166.png 300w, https:\/\/www.tejwin.com\/wp-content\/uploads\/ee-150x83.png 150w, https:\/\/www.tejwin.com\/wp-content\/uploads\/ee-768x424.png 768w, https:\/\/www.tejwin.com\/wp-content\/uploads\/ee-1536x849.png 1536w, https:\/\/www.tejwin.com\/wp-content\/uploads\/ee.png 1790w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td>Performance Metric \/ Strategy<\/td><td>Benchmark<\/td><td>This Investment Strategy<\/td><\/tr><tr><td>Annualized Return<\/td><td>13.91%<\/td><td>14.53%<\/td><\/tr><tr><td>Cumulative Return<\/td><td>156.29%<\/td><td>166.60%<\/td><\/tr><tr><td>Annualized Volatility<\/td><td>17.54%<\/td><td>23.93%<\/td><\/tr><tr><td>Sharpe Ratio<\/td><td>0.83<\/td><td>0.69<\/td><\/tr><tr><td>Calmar Ratio<\/td><td>0.51<\/td><td>0.33<\/td><\/tr><tr><td>Maximum Drawdown (During Period)<\/td><td>-27.37%<\/td><td>-43.47%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Based on the backtesting results, this investment strategy slightly outperforms the market in terms of&nbsp;<strong>annualized return (14.53%)<\/strong>&nbsp;and&nbsp;<strong>cumulative return (166.6%)<\/strong>, compared to the benchmark&#8217;s&nbsp;<strong>13.91% \/ 156.29%<\/strong>.<br>However, its&nbsp;<strong>risk-adjusted performance is relatively poor<\/strong>. The strategy&#8217;s&nbsp;<strong>annualized volatility reaches 23.93%<\/strong>, significantly higher than the market&#8217;s 17.54%, resulting in a&nbsp;<strong>Sharpe ratio of only 0.69<\/strong>, which is lower than the market\u2019s 0.83. This indicates that the return per unit of risk is actually worse.<\/p>\n\n\n\n<p>In addition, the strategy suffers from a&nbsp;<strong>maximum drawdown of -43.47%<\/strong>, compared to the market&#8217;s -27.37%, reflecting a&nbsp;<strong>lack of sufficient defensive capability<\/strong>&nbsp;during periods of market turbulence.<\/p>\n\n\n\n<p>The&nbsp;<strong>Calmar Ratio<\/strong>&nbsp;of the strategy is&nbsp;<strong>0.33<\/strong>, also lower than the market&#8217;s 0.51, suggesting that the&nbsp;<strong>return achieved for each unit of maximum loss is relatively low<\/strong>.<br>This is also evident in the chart, where the&nbsp;<strong>&#8220;Excess Return&#8221; remains negative for a prolonged period<\/strong>, especially between&nbsp;<strong>2021 and 2024<\/strong>, during which the strategy clearly underperformed the market.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Link_to_Full_Source_Code\"><\/span><a href=\"https:\/\/github.com\/tejtw\/TQuant-Lab\/blob\/main\/example\/TQ_%E5%AE%89%E6%9D%B1%E5%B0%BC%C2%B7%E8%B3%A3%E5%88%A9%E4%BA%9E%E5%8F%8D%E5%90%91%E6%93%8D%E4%BD%9C%E7%AD%96%E7%95%A5.ipynb\" target=\"_blank\" rel=\"noopener\">Link to Full Source Code<\/a><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><br>We welcome all investors and interested readers to review this strategy.<br>We will continue to share insights on building various indicators using the&nbsp;<strong>TEJ database<\/strong>, as well as backtesting their performance. If you&#8217;re interested in quantitative trading and strategy development, consider subscribing to the&nbsp;<strong>TQuant Lab<\/strong>&nbsp;solutions \u2014 use high-quality data to build strategies tailored to your own investment style.<\/p>\n\n\n\n<p>\ud83d\udccc&nbsp;<strong>Disclaimer:<\/strong><br>This analysis is for informational purposes only and does not constitute investment advice or recommendations for any specific financial product.<\/p>\n\n\n\n<div style=\"border: 1px black; border-style: solid none; text-align: center; border-color: #296580; padding: 24px; margin-top: 24px; margin-bottom: 24px;\">\n<p style=\"margin: 0px; font-size: 24px; font-weight: bold; line-height: 1.5;\">\u3010TQuant Lab Backtesting System\u3011Solving Your Quantitative Finance Pain Points<\/p>\n<div style=\"margin-top: 32px;\"><a style=\"border: none; border-radius: 4px; background-color: #296580; color: white; font-size: 20px; width: fit-content; text-decoration: none; padding: 12px 30px 12px 30px;\" href=\"https:\/\/tquant.tejwin.com\/\" target=\"_blank\" rel=\"noopener\">Click here to sign up and start your free trial<\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Further_Reading\"><\/span>Further Reading<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><a href=\"https:\/\/www.tejwin.com\/en\/insight\/from-business-cycle-indicators-to-asset-rotation-a-quantitative-strategy-to-avoid-bear-markets\/\">From Business Cycle Indicators to Asset Rotation: A Quantitative Strategy to Avoid Bear Markets<\/a><\/p>\n\n\n\n<p><a href=\"https:\/\/www.tejwin.com\/en\/insight\/michael-murphys-risk-assessment-rules-for-investing-in-high-tech-stocks\/\">Michael Murphy\u2019s Risk Assessment Rules for Investing in High-Tech Stocks<\/a><\/p>\n\n\n\n<p><a href=\"https:\/\/www.tejwin.com\/en\/insight\/charles-brandes-value-investing-principles-building-a-portfolio-with-a-margin-of-safety-nemo\/\">Charles Brandes\u2019 Value Investing Principles : Building a Portfolio with a Margin of Safety<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Related_Links\"><\/span>Related Links<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/github.com\/tejtw\/TQuant-Lab\" target=\"_blank\" rel=\"noopener\">TQuant GitHub<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/tquant.tejwin.com\/\" target=\"_blank\" rel=\"noopener\">TQuant \u5b98\u7db2<\/a><\/li>\n<\/ul>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In financial markets, Contrary Thinking is a timeless strategic wisdom. It stems from a simple yet profound observation: when most people are overly optimistic, the market is often overheated; when the crowd falls into fear, it may actually present a buying opportunity. However, contrarian investing has long remained at the level of a proverb, lacking concrete and quantifiable standards of action, making it difficult to implement in practice.<\/p>\n","protected":false},"featured_media":38407,"template":"","tags":[2962,3176,2988,3007],"insight-category":[3509,1356],"class_list":["post-39800","insight","type-insight","status-publish","has-post-thumbnail","hentry","tag-market-data","tag-python-2","tag-quantitative-analysis","tag-tejapi-data-analysis","insight-category-fintech-en","insight-category-tquant-lab-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/insight\/39800","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/insight"}],"about":[{"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/types\/insight"}],"version-history":[{"count":6,"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/insight\/39800\/revisions"}],"predecessor-version":[{"id":39807,"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/insight\/39800\/revisions\/39807"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/media\/38407"}],"wp:attachment":[{"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/media?parent=39800"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/tags?post=39800"},{"taxonomy":"insight-category","embeddable":true,"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/insight-category?post=39800"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}