Legendary contrarian investor David Dreman is, not surprisingly, maintaining his contrarian approach these days, keying in on two unloved investments: stocks and real estate.

“Everything people are cowering away from today I would prefer to invest in,” Dreman says in a recent interview with GuruFocus.com. “If we have an inflationary environment, value stocks should do well over the next 4-5 years. And can I say this dirty word: real estate. Real estate has been hit so hard if you have a holding period of 5 years with 20-25% leverage, it is a 4-1 play on the upside.”

Dreman says he thinks that once the unemployment rate comes down below 6%, we’ll see major inflation rates of 10% to 12%. While that may take several years, he indicates it’s time to buy up inflation-beating assets now. His “number one choice would be stocks,” he says, saying that historically stocks have proven to be the best inflation-beaters.

Dreman also discusses why he’s a bit leery of overseas markets. One reason is that he thinks “[U.S.] jobs are not coming back quickly, and it’s possible 25% of jobs will never come back.” Because of that there will be pressure to create jobs in the U.S., and he thinks the country will look carefully at free trade issues and take steps to create more fair trade, which would help U.S. growth. “I think this will be a major political factor in the next five years and probably even sooner,” he says.