Sentiment Indicators — Quantifying the Crowd

You cannot profitably trade the news. By the time a development is consensus knowledge, it is already priced in. What you can trade is the emotional extreme — the moment when the crowd's reaction has overshot the reality.

Why This Matters

Contrarian investing is acutely timing-sensitive. Even a perfectly correct thesis can destroy capital if entered too early — when sentiment is still deteriorating and forced selling has not yet peaked. Sentiment indicators are your quantitative read on crowd extremes. They tell you not whether the thesis is right, but whether the emotional moment is ripe.