Buy New Orleans real estate. No, I don't necessarily mean to actually buy New Orleans real estate, although it might be a very good idea. The point is that it is a good example of how extremely successful investors think.

You see, most very successful investors are contrarians. A contrarian is an investor who deliberately decides to go against the prevailing wisdom of other investors. Contrarians are not going to follow the crowd. In fact, they're going to invest in whatever is being shunned by the majority of investors. That's where they know they can find value. That's where they know they can make huge profits.

Contrarians are the kind of investors that would be looking to buy New Orleans real estate and shares of New Orleans businesses when the post-Katrina conventional wisdom is that New Orleans is a disaster area that should be avoided at all costs and never to recover.

Contrarians were buying Google (GOOG) when it first went public in 2004 at $85. The conventional wisdom was that Google wasn't worth more than $85 a share. Contrarians looked at Google's pristine balance sheet, considered the fact that the company had a business model that was dominating the Internet, and bought. The rest is history. Google shares soared over 400% from the price of the original offering.

Contrarians were buying oil in 1999 when crude was less than $15 a barrel -- there was supposed to be an oil glut, you know -- and the crowd was buying ridiculously overpriced dot com stocks.

And now, I'm sure that there are some future billionaires looking seriously at investments like New Orleans real estate.

Michael Lewis, writing for Bloomberg, wrote a very interesting column about the wisdom of being a contrarian. The concluding paragraph is particularly noteworthy:

"But someone, somewhere is about to make a killing in New Orleans. Somewhere there is a hedge fund manager stealthily buying up New Orleans real estate, or a venture capitalist quietly creating a New Orleans fund, or a 26-year-old would-be entrepreneur who, having been rejected by Harvard and Stanford business schools, is deciding to make his empire in the ruins. And, as loathsome as he will seem in retrospect, I find him hard to dislike right now."

Indeed.