THE LEGENDS ; DAVID DREMAN

Continuing with my efforts to familiarize the readers of this blog with the lives and times of some of the greatest investors ever, today we shall look at DAVID DREMAN.

• Born in Manitoba, Canada in 1936, David Dreman graduated from the University of Manitoba (Canada) in 1958. After graduating, he worked as director of research for Rauscher Pierce, senior investment officer with Seligman, and senior editor of the Value Line Investment Service. In 1977, he founded his first investment firm, Dreman Value Management, Inc., and has served as its president and chairman.
• Dreman in terms of investment style, is often talked of as the 'guru of contrarian value investing'.His first book, "Contrarian Investment Strategy: The Psychology of Stock Market Success" (1980) is an investment classic. He has also written the highly respected "The Contrarian" column in Forbes magazine for many years.
• His investing approach is best described in his own words wherein he says"  "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." Sounds simple doesn't it, but is actually not so, as most Market participants will readily vouch; but then I guess, that is what separates legends from lesser mortals!!!

Famous Quotes of DAVID DREMAN:

• Patience is a crucial but rare investment commodity
• I buy stocks when they are really battered.
• Take advantage of the high rate of analyst forecast error by simply investing in out-of-favor stocks
• Favored stocks underperform the market, while out-of-favor companies outperform the market, but the reappraisal often happens slowly, even glacially.
• Psychology, no matter how much you’ve studied it or think you know it, can reduce both your ego and your net worth very quickly.
• It is one thing to have a powerful strategy; it’s another to execute it.
• One thing I can predict: it is almost axiomatic that the wild enthusiasm of today will be met with the equally unwarranted pessimism of tomorrow.
• The success of contrarian strategies requires you at times to go against gut reactions, the prevailing beliefs in the marketplace, and the experts you respect
• Not only do investors go wrong, they go wrong in a systematic and predictable manner. So predictable, in fact, that consistent investment strategies can be built on their mistakes.
• Getting in near the bottom and out near the top is not as easy as market timers or asset allocators would have you believe.
• Psychology is probably the most important factor in the market – and one that is least understood

FOR MORE INSIGHTS ON MORE LEGENDS SEE HERE