The Citigroup Economic Surprise Index, which measures how current economic data is comparing to expectations, is on the rise along with investor confidence regarding the expanding economy, writes Validea CEO John Reese in a recent article for Forbes. Historically, however, markets perform best not during times of economic expansion, but rather when the economy is improving despite lower expectations, writes Reese. When things are going relatively well, he argues, “forecasters tend to extrapolate forward using… Read More
The famous investor David Dreman, who Kiplinger once referred to as the “consummate contrarian”, follows a strategy which capitalizes on the emotional, knee-jerk reactions that make unpopular stocks underpriced, writes Validea CEO John Reese in TheStreet. This is no coincidence, given Dreman’s knowledge and experience in the area of behavioral finance. Dreman identifies such undervalued companies, Reese explains, by comparing their share prices to four different financial variables that gauge the strength of the underlying… Read More
David Dreman of Dreman Value Management says, “the outlook for the market couldn’t be murkier” in a Forbes column. He notes that corporate revenues and profits for the S&P 500 are slightly down from 2014 to 2015, but that the P/E ratio for the S&P 500 is above its long-term average. Overall, he predicts “that 2016 will be a year without significant movement up or down.” Further, he recommends value stocks, particularly in cyclical, energy… Read More
Contrarian guru David Dreman says that, while he sees a couple of big economic risks for the US right now, he’s still bullish on the stock market. Why? Because there just aren’t other attractive options. In his latest Forbes column, Dreman says that the lack of wage growth for the middle and working classes and misguided Federal Reserve policies are big concerns. But there’s nowhere else to turn for decent returns, he says. “The chance… Read More
Contrarian guru David Dreman says that, while he sees a couple of big economic risks for the US right now, he’s still bullish on the stock market. Why? Because there just aren’t other attractive options. In his latest Forbes column, Dreman says that the lack of wage growth for the middle and working classes and misguided Federal Reserve policies are big concerns. But there’s nowhere else to turn for decent returns, he says. “The chance… Read More
Can a single page of a book change your investment life? We believe it can. Periodically, we highlight some of the Great Pages that have had a great impact on our investment philosophy. Today, we look at a page in David Dreman’s classic “Contrarian Investment Strategies”, in which Dreman shows that the stock market is far more resilient than many give it credit for — which has tremendous implications for how to invest when crises occur.
Contrarian guru David Dreman says policymakers have created “a form of financial Ebola” that is threatening to wipe out the savings of many Americans.
Contrarian guru David Dreman says the Federal Reserve has been playing a dangerous, unsuccessful game by keeping interest rates so low for so long. But he says there are ways for investors to cure the “easy money hangover.”
In an interview with Steven Halpern for MoneyShow.com, Validea CEO John Reese recently talked about the Guru Strategy he bases on noted contrarian investor David Dreman.
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 6.5% annualized returns since its inception more than 10 years ago, beating the S&P 500. Below is an excerpt from today’s newsletter, along with several top-scoring stock ideas based on the Dreman-based investment strategy.