CONTRARIAN INVESTMENT STRATEGIES THE NEXT GENERATION

Rating:
Summary: Correct premise, but boring, good for novices
Review: The basic principles of this book could be boiled down to a paragraph, but Dreman spends more than 400 pages. I agree with contrarian investing, so this book is an essential read if you're a novice, in school, or maybe just starting to risk capital, but not recommended for experienced professionals. A plus is that the book offers practical advice and real life examples, but it is somewhat dated since it was written pre-Internet crash. Another warning is that this book is extremely dry and reads like an academic textbook--reminds me of AIMR's Financial Analyst's Journal, but not as substantive.

Rating:
Summary: Correct premise, but boring, good for novices
Review: The basic principles of this book could be boiled down to a paragraph, but Dreman spends more than 400 pages. I agree with contrarian investing, so this book is an essential read if you're a novice, in school, or maybe just starting to risk capital, but not recommended for experienced professionals. A plus is that the book offers practical advice and real life examples, but it is somewhat dated since it was written pre-Internet crash. Another warning is that this book is extremely dry and reads like an academic textbook--reminds me of AIMR's Financial Analyst's Journal, but not as substantive.

Rating:
Summary: Rational Advice from Dreman
Review: Though Dreman's tome was written in '97-'98, it has proven prescient. Note that while value investors suffered from '98 to early '00, Dreman has won out in the end with his Kemper-Dreman High Return Fund returning 71% from March 2000 to March 2001 (while the NASDAQ lost 60%+ - a 130% spread), and has beaten the S & P over the long term. As someone who has their master's degree from the University of Chicago, I should take offense at Dreman's thorough and convincing debunking of the Efficient Markets Hypothesis, but I don't. In fact, it gives me great pleasure to see the efficient marketers twist and turn, esp. in light of the Nasdaq's crashing and burning, crafting rather facetious and silly reasons as to why the extreme market run-up was in fact "rational." It reality, it was a bubble of truly unprecedented proportions made up of egregiously priced concept stocks and vastly overpriced companies built on a foundation of momentum investing, greedy delirium and a wide lack of any notion of underlying business valuations among institutional and retail investors alike. Dreman has remained one of the only true disciples of the Graham and Dodd heritage and prefaced the rise of the "behavioral school" of finance, which attempts to explore some of the same ground Dreman has been covering for many years. Dreman points out that human psychology, when it comes to markets, is actually fairly predictable in a macro sense and shows that valuation has and always will matter in the end. Get this book -- you and your portfolio won't regret it. Anybody who even superficially followed suggestions in this book and tracked holdings in Kemper-Dreman easily returned 50%+ in 2000.