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Professional investors know that the best way to make it big is to believe in something that almost everyone disagrees with – and be right. That could be a business idea, an investment opportunity, or a cultural trend. If change creates opportunity, this coming year feels ripe for new big things to emerge. The country is more divided than ever. The world seems to be on the brink of war, and the one thing the incoming Trump Administration seems most committed to is massive disruption. Big changes are coming, but what will they be?
If most people think interest rates will rise, and you bet the other way, you will look like a fool or a genius. Nobody wants to look like a fool, so it takes a lot of confidence to go against conventional wisdom. However, if the idea is big enough, the payoff for betting against the grain can be enormous.
Start by asking yourself what are the big ideas in your field. The bigger, the better. Then, pick a few that most people believe are a certainty. Finally, choose one you strongly believe most people are wrong about.
Here is an example: The 2008 housing crisis left the industry in shambles. A few years later, I was appointed to the inaugural advisory for the Consumer Financial Protection Bureau (CFPB). That role gave me a behind-the-scenes look at regulatory changes being considered for the market.
The mortgage industry was blamed for starting a crisis that nearly took down the entire U.S. economy. Many people believed that mortgage brokers were primarily to blame, and most believed, including the leaders at the CFPB, that banks, not brokers, should originate mortgages. The consensus at the time was that regulators would eventually eliminate mortgage brokers. I believed that myself.
A few people disagreed, including Matt Ishbia, the CEO of United Wholesale Mortgage. Rather than pivot to a new business channel, Matt went all-in on the mortgage broker business. When he turned out to be correct, UWM became the second-largest mortgage company in the country, making Ishbia a billionaire. Today, mortgage brokers have a larger market share than in 2008.
This holiday season, do some deep thinking and determine where the big opportunities in your field of choice might be. Remember that the more certain everyone else is of a particular idea, the greater your opportunity if you are right and the consensus is wrong.
The holiday season should be about gratitude more than anything else. I am beyond grateful for my life, family, friends, and the fulfilling work I get to do.
Thank you for reading my blog. Merry Christmas and Happy Holidays!
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