1. Greatest Investors: Introduction
  2. The Greatest Investors: John (Jack) Bogle
  3. The Greatest Investors: Warren Buffett
  4. The Greatest Investors: David Einhorn
  5. The Greatest Investors: Stanley Druckenmiller
  6. The Greatest Investors: David Dreman
  7. The Greatest Investors: Philip Fisher
  8. The Greatest Investors: Benjamin Graham
  9. The Greatest Investors: William H. Gross
  10. The Greatest Investors: Carl Icahn
  11. The Greatest Investors: Jesse L. Livermore
  12. The Greatest Investors: Peter Lynch
  13. The Greatest Investors: Bill Miller
  14. The Greatest Investors: John Neff
  15. The Greatest Investors: William J. O'Neil
  16. The Greatest Investors: Julian Robertson
  17. The Greatest Investors: Thomas Rowe Price, Jr.
  18. The Greatest Investors: James D. Slater
  19. The Greatest Investors: George Soros
  20. The Greatest Investors: Michael Steinhardt
  21. The Greatest Investors: John Templeton
  22. The Greatest Investors: Ralph Wanger
David Dreman

Born: 1936 (Winnipeg, Manitoba, Canada)

Key Positions: Rauscher Pierce Refsnes Securities Corp.

J&W Seligman

Value Line Investment Service

Dreman Value Management, LLC

Personal History:
The son of Joseph Dreman, a prominent investor in Winnipeg, David Dreman studied at the University of Manitoba, graduating in 1958. Upon graduation, Dreman worked as director of research for Rauscher Pierce Refsnes Securities Corp., then continued his career as senior investment officer with J&W Seligman, and later as senior editor of the Value Line Investment Service.

Dreman founded Dreman Value Management in 1977 on the basis of his developing contrarian investment style. The fund saw success throughout the 1990s, bolstered by Dreman’s popularity as a columnist for Forbes. In spite of a long track record of success, Dreman was forced out of the fund when it was purchased in 2009 by Deutsche Bank.

Investment Philosophy:
Dreman may have come to his iconic contrarian investment style as a result of his own bad bets early in his career. As a junior analyst in 1969, Dreman reportedly went along with popular investment opinion and bought into stocks of companies with questionable earnings as prices were climbing. He later indicated that he “invested in the stocks du jour and lost 75% of my net worth.” As a result, Dreman became acutely aware of the power of psychology in investment behavior and began to develop his philosophy as a contrarian.

Dreman explained his approach in an interview with Kiplinger’s Personal Finance in 2001: “I buy stocks when they are battered. I am strict with my discipline. I always buy stocks with low price-earnings ratios, low price-to-book value ratios and higher-than-average yield. Academic studies have shown that a strategy of buying out-of-favor stocks with low P/E, price-to-book and price-to-cash flow ratios outperforms the market pretty consistently over long periods of time."

Noteworthy Publications:

  • "Contrarian Investment Strategy: The Psychology of Stock Market Success" by David Dreman (1980)
  • "The New Contrarian Investment Strategy" by David Dreman (1982)
  • "Contrarian Investment Strategies: The Next Generation” by David Dreman (1998)
  • “Contrarian Investment Strategies: The Psychological Edge” by David Dreman (2012)

Quotes:

"Psychology is probably the most important factor in the market – and one that is least understood."

"I paraphrase Lord Rothschild: ‘The time to buy is when there's blood on the streets.'"

"One of the big problems with growth investing is that we can't estimate earnings very well. I really want to buy growth at value prices. I always look at trailing earnings when I judge stocks."

"If you have good stocks and you really know them, you'll make money if you're patient over three years or more."

 

 

 

 

 

 

 

 

 

 

 

 

 


The Greatest Investors: Philip Fisher
Related Articles
  1. Investing

    Why Contrarian Investing Is Not Very Smart

    Like most allegedly sure-fire methods in the investment industry, this one has its flaws too.
  2. Investing

    Five ETFs for Contrarian Investors

    Here are five ETF ideas that can be used by the contrarian investor.
  3. Investing

    Rich Returns: How Contrarian Investors Are Winning

    Bright Profits: contrarian investing has returned 31% this year, triple the S&P 500. Will it work in 2017?
  4. Investing

    Finding Solid Buy-And-Hold Stocks

    Find out how to look at the big picture - even when the market's short-term outlook is less than rosy.
  5. Investing

    Does Active Value Investing Pay Off?

    Learn about a well-researched paper that explores why active value investors underperform, and how value investing might be beneficial for your portfolio.
  6. Investing

    What Is The Value In Value Investing?

    Value investing has its advantages, but it also has significant drawbacks. We look at the pros and cons.
  7. Investing

    Mutual Funds for a Low Growth Environment (JSVAX, MJFOX)

    Learn about investing in mutual funds that employ strategies aimed at optimizing returns when slow U.S. economic growth is forecast.
  8. Investing

    How to Make Money With Just $10,000

    Find out how five leading investors recommend investing $10,000, including top contrarian, dividend-focused, value investing and emerging market ETF picks.
  9. Investing

    How Value Investors’ Patience Has Been Tested

    Investors in value stocks are finding their patience tested. Does this strategy still work?
  10. Investing

    What Is Contrarian Investing?

    Learn the method and reasoning behind this contradictory investment strategy.
Frequently Asked Questions
  1. Is There a Difference Between the Equity Market and the Stock Market?

    The terms equity market and stock market are synonymous
  2. What Are the Components of a Risk Premium?

    Learn the five main risks that comprise the risk premium and how they affect investors.
  3. What Is an Odd-Lot Buyback?

    Odd-lot buybacks involve lots of less than 100 shares. Learn how companies get these shares back.
  4. How is a company's share price determined?

    Understand the concept behind the Gordon growth model and what it is used to measure. Learn how a company's share price is ...
Trading Center