The time to buy is when there's blood on the streets, the legendary financier Baron Rothschild declared more than a century ago. And with markets driven increasingly by momentum, thanks to the rise of computerized trading and virtual baskets of stocks, that axiom may now be truer then ever.

It's also the bedrock investment philosophy for Lauren Templeton (pictured) and Scott Philips, who run the Global Maximum Pessimism Fund and have a new book out detailing their view of markets ranging from agriculture to oil to stocks.

Templeton's investment method has familial roots. She's the niece of Sir John Templeton, the mutual fund magnate who pioneered international investing among other things. He advised to buy at times of maximum pessimism and sell into euphoria. And the fund, which beat the market last year, has racked up an impressive track record that bolster its views.

It's All About Valuation

Big-cap, high-quality U.S. stocks are currently engulfed in undue pessimism, Philips told DailyFinance in an interview. Companies like Wal-Mart (WMT) and Hewlett-Packard (HPQ) are trading at multiples far below their historic valuations despite seeing strong business.

Being able to rigorously value a company's business is a key criterion for the firm. It helps sidestep disasters that took place in the financial crisis -- when some banks loaded their balance sheets with assets that were nearly impossible to value – where extreme pessimism may have in fact been warranted.

It seems like everyone on Wall Street claims to be a contrarian, ironic as that is. But this fund located in Chattanooga, Tenn., is building a business on it. For more on Templeton's and Philips's investing strategy, see video: