David Dreman’s Value Investing Strategy – Validea’s Guru Investor Blog
David Dreman is known as the “consummate contrarian” in the world of investing. As the chairman and chief investment officer of Dreman Value Management, he has made a highly successful career out of buying beaten-down, unloved stocks that the market has overreacted to and that are trading at bargain prices.
Dreman’s Contrarian Philosophy
Dreman detailed his contrarian philosophy in his 1998 book Contrarian Investment Strategies: The Next Generation. His approach centers on the belief that investors are prone to overreaction, typically overvaluing the “best” stocks and undervaluing the “worst.” Dreman believed these mispricings could be identified using certain key financial metrics like the price-to-earnings…
