Getting Contrarian With The Dreman Approach

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 6.3% since its July 2003 inception vs. 2.8% 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 December 9, 2011 issue of The Validea Hot List Guru… Read More

Dreman: Look Past the Fear — Now’s the Time to Buy

While many investors have been fleeing stocks this summer, David Dreman says it’s a good time to be buying. “No, the market volatility and the seemingly never-ending Fed follies are certainly not what makes me positive on stocks today, but there are some good reasons to be bullish right now,” Dreman writes in his latest Forbes column. He points to U.S. companies having record-high cash hoards that should “allow them to weather almost any storm”;… Read More

Dreman: Bernanke Stuck in the Past on Jobs

David Dreman says U.S. policymakers are approaching the employment problem with antiquated views, and policies that aren’t addressing the real issues with job creation. In his latest Forbes colunn, Dreman says that Fed Chairman Ben Bernanke “is fighting the monetary woes of the 1930s,” a period in which domestic stimulus led directly to increased domestic employment. “Our current employment problem is different,” Dreman says. “We currently export our jobs to lower-wage nations like India, China… Read More

Dreman: Prepare Now for Inflation

In his latest Forbes column, David Dreman says investors should be preparing now for major inflation. “Several years back I recommended not to follow the dash out of stocks into Treasurys,” Dreman writes. “The greatest risk to investors today is not stock volatility but rapidly rising inflation. Whether inflation begins to shoot up this year or is still a few years out, it will reappear with unexpected ferocity.” Dreman says the huge money-printing and quantitative… Read More

Dreman Positions Portfolio for Inflation

David Dreman says stocks are generally cheap, but he’s still expecting that the U.S. will be jolted by a “really major dose of inflation” at some point down the line. “I’m not talking about at present — this could be two, three years out,” Dreman tells Forbes.com. “But I think we’re going to have a really major dose of inflation. Will it get as bad as it was from 1977 to 1981?  That horrendous period… Read More

Putting All Your Chips in Hot, High-Growth Areas? Think Again

In a two-part series for Canada’s Globe and Mail, Validea CEO John Reese shows how chasing hot sectors or regions can lead to big trouble for stock investors. In Part I of the article, Reese looks at several back-tested portfolios to see how investors who tried to jump on stocks in hot-performing regions would have fared over the past three decades. The answer: not good. “Why does chasing the best performing markets end so badly… Read More

Dreman: Fed Laying Groundwork for “Serious” Inflation

In his latest Forbes column, David Dreman bashes Federal Reserve Chairman Ben Bernanke, and says it’s likely that the Fed’s continued quantitative easing will lead to “serious inflationary repercussions for years to come”. “As an economic elixir, printing money is a sop,” Dreman writes. “With interest rates already extremely low, it is unlikely to sway corporate executives to expand and hire more employees. Worse still, chances are high that this monetary policy gaffe will have… Read More

Navellier, Dreman, and Siebert: What to Expect in 2011

Top growth investor Louis Navellier says he’s bullish heading into 2011, and is high on multi-national U.S. firms and technology companies. “I think you can invest in a lot of big company stocks here in the States and feel good about it because such a high percentage of the S&P earnings comes from beyond our borders,” Navellier tells the Palm Beach Daily News. “You can actually benefit from that if you buy companies like McDonald’s,… Read More

Dreman-Inspired Approach Beats Market by Finding Hidden Gems

In his latest article for Seeking Alpha, Validea CEO John Reese takes a look at his David Dreman-inspired strategy, which is handily beating the market both this year and over the long haul. “While most of the gurus upon whom my ‘Guru Strategies’ are based are contrarians, one stands out among all the others: David Dreman,” Reese writes. “Throughout his long career, Dreman has sifted through the market’s dregs in order to find hidden gems,… Read More

Dreman on Why Not to Rely on CAPM & Beta

In his latest Forbes column, contrarian guru David Dreman says the capital asset pricing model — long a staple of the investing world — should be done away with. The CAPM, Dreman writes, basically says that the only way to outperform in the stock market is to take on more risk, which is usually measured by beta. “It’s time to delete the CAPM from business school textbooks,” Dreman says, adding that the theory has done… Read More