There are certain times when being a value investor also implies taking a contrarian approach. However, the terms “value investor” and “contrarian investor” are not always synonymous. On the other hand, when faced with a significantly overvalued marketplace like we see today with blue-chip dividend growth stocks, value investing and contrarian investing tend to become one and the same.
The simple fact is that when faced with a strong bull market, true fairly valued dividend growth stocks become very hard to find. In a strong market, value typically comes about for a reason, and that reason is typically associated with problems. However, the key to long-term investing success is when you find fair value due to a temporary problem, and not a permanent impairment of the underlying business.