The market rally off its recent lows is paying off for some contrarian investors (see WSJ article). While contrarian investing can mean many things, it often involves buying out-of-favor and beaten-down stocks, or selling those that are over-extended after a nice, and often too-far, too-fast, rally. Essentially, contrarian investors often go against the grain of market sentiment. Of course, given the massive sell-off, some could argue that the markets had no were else to go but up, but timing is important, and hindsight is 20-20. Whom among us was 100 percent certain late last year that the markets were not going lower, or for that matter, were going to recover at all anytime soon, even for a quick bear rally? Even successful contrarian investors such as Warren Buffett, Bill Miller, and David Dreman had a difficult 2008, with Buffett himself adding to down investments prematurely. While those with less than perfect timing may eventually be proven to once again beat the market if held long enough (often a requirement for contrarian investors who have low levels of turnover and high levels of patience), those that are most successful understand both timing and value. It is important to remember that beaten down companies can go lower, or even fail, while those running up too fast can keep soring as the markets remain irrational longer than your ability to remain solvent. But now, in the mists of a nice bear (or new bull) rally, it is easy to once again have stars in our investing eyes. Yet while we dream, contrarian investors may already be looking for those stars that are ready to fall back to earth after a nice, and possibly unjustified, run. After all, summer is often a good time for spotting shooting stars, which are really not stars at all, but bits of dust and rock burning up as they fall from the sky. Maybe now is the time to start enjoying the show.