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How contrarians got it wrong in 2013

How the contrarians got it wrong in 2013
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How the contrarians got it wrong in 2013

Being against the mood of the market can often reap huge dividends – as George Soros or Warren Buffett could tell you.

"The time to get interested is when no one else is," the Sage of Omaha's famous rubric goes. This is the ultimate goal of contrarian investors, who believe that markets peak just when the majority of investors say they are going to continue rising. The best spots – like John Templeton's shorting of tech stocks during the 1990s bubble or George Soros's calling of the sterling crash in 1992 - make both fortunes and reputations.

(Read more: Why you shouldn't listen to contrarians)

Yet 2013 was far from a vintage year for the contrarian investor, as the continuation of the global equities rally led to one of the biggest momentum years since 1998, according to strategists at Citi."While simple contrarian strategies often perform very well at big macro turning points, they tend to underperform the rest of the time," the Citi strategists argued.

(Read more: Outrageous predictions for 2014)

The main contrarian calls for 2013 were to buy commodity-related stocks and emerging market countries, according to Citi. Unfortunately, emerging markets suffered a rout following the panic about the end of the U.S. Federal Reserve's asset-buying program, a process known as tapering. And commodities were hit by declining prices for oil and gas.

(Read more: Emerging markets can't fight the Fed)

Sticking your head above the parapet can be tricky. Last week, Australia's Westpac Bank said there wouldn't be a Fed taper in 2014 – which has already been proved wrong.

(Read more: Westpac's contrarian Fed call)

However, underperformance this year doesn't mean contrarian investors are going to lose their nerve. The biggest contrarian plays for 2014 are likely to be emerging markets and commodities stocks again, according to Citi.

"Contrarian strategies have been trampled underfoot," they wrote. "However, that won't stop the contrarians trying."

- By CNBC's Catherine Boyle. Twitter: @cboylecnbc.