The Dreman Approach: A Contrarian Guide to Beating the Market

Every other issue of The Validea Hot List newsletter examines in detail one of John Reese’s computerized Guru Strategies. This latest issue looks at the David Dreman-inspired strategy, which has averaged annual returns of 7.2% since its July 2003 inception vs. 5.3% for the S&P 500. Below is an excerpt from the newsletter, along with several top-scoring stock ideas from the Dreman-based investment strategy. Taken from the August 16, 2013 issue of The Validea Hot List Guru… Read More

Dreman: Stocks And Housing Are Places To Be

Contrarian guru David Dreman remains concerned about major inflation, and says investors should thus focus on stocks and the housing market. In a column for Forbes, Dreman says that economic improvements and the realization that higher interest rates will come as the economy improves have driven the stock market’s performance recently. “Currently a one-percentage-point rise in yield for a 30-year bond will reduce its price by 17%. A three-point increase in yield will knock its… Read More

The Dreman Approach: Thinking Contrarian to Beat the Market

Every other issue of The Validea Hot List newsletter examines in detail one of John Reese’s computerized Guru Strategies. This latest issue looks at the David Dreman-inspired strategy, which has averaged annual returns of 6.9% since its July 2003 inception vs. 4.0% for the S&P 500. Below is an excerpt from the newsletter, along with several top-scoring stock ideas from the Dreman-based investment strategy. Taken from the September 14, 2012 issue of The Validea Hot List Guru… Read More

Contrarian Plays in the Oil Industry

In his RealMoney column, Validea CEO John Reese recently took a contrarian look at oil stocks. “Oil at the moment is on a slippery slope. Prices are at their lowest in months. In fact, they are dropping during the time of year they typically rise due to higher demand in the summer months,” Reese writes, citing several factors — Iraq re-entering the oil supply business, Libya ramping up production, a slowing global economy meaning lower… Read More

Dreman: Bond Bubble Will Hurt Many

Contrarian strategist David Dreman says a “major bubble that will hurt a lot of people” has formed in the long Treasury bond market. “Ten-year Treasuries are yielding about 2%, while 30-year Treasuries are at 3%,” Dreman tells Morningstar.com. “Adjusting for inflation and taxes, this has almost never happened before. In the rush to Treasuries after the market collapse and financial crisis of 2008, people’s only thought was to preserve their capital. What they overlook today… Read More

Getting Contrarian With A Market Guru

Most of history’s best investors have made their hay by going against the crowd. And in his latest column for Forbes.com, Validea CEO John Reese takes a look at some intriguing new research that contrarian guru David Dreman has published, and a Dreman-inspired strategy that has a strong track record of beating the market. “After more than a dozen years of studying history’s most successful investment strategies, one of the most important pieces of advice… Read More

Dreman: Best Values in 30 Years

Contrarian guru David Dreman says he’s finding stocks as cheap as they’ve been at any time since 1982. Dreman tells Forbes’Steve Forbes that he’s bullish because valuations are low and companies have good cash flows and financial positions that are as strong as they’ve been in years. (A tip of the cap to Zack Miller of Tradestreaming.com for drawing our attention to the interview.) He says investors have been running from stocks because they fear volatility and they fear… Read More

Dreman Likes U.S. & Canadian Markets

Contrarian guru David Dreman says he’s finding the biggest investing opportunities right now in North American stocks. Dreman tells Canada’s Globe and Mail that over the long term — the past 25 years — the S&P 500 has basically been in a dead heat with more glamorous foreign markets. And, he adds, “There isn’t a lot of liquidity in markets in developing countries, so you’re taking extra risk for the same gain.” Asked how he… Read More

Dreman on How To Combat High-Frequency Trading

Contrarian investor David Dreman say high-frequency trading is a “dark vulture” hovering over markets. And in his latest Forbes column, he offers a few tips on how individual investors can elude the beast. “In my forthcoming book, Contrarian Investment Strategies: The Psychological Edge … I detail the dangers of HFT firms that accentuate market movements by shorting heavily when the Dow or S&P 500 rapidly drops about 2%, or buying if it suddenly rises the… Read More