Contrarian Investment Strategies - The Classic Edition Hardcover – May 18, 1998

Dreman's book is a very accessable resource for the Value Investor's philosophy on why the market isn't effective at pricing securities and how you can use this to your advantage. Readable, engaging and funny- 400 pages of investment market analysis and theory never went down so easily.With that said, a person already sold on the effectiveness of value investing will find lots of preaching to the choir. D. spills alot of ink to disprove the Efficient Market Hypothesis and discredit the likes of Eugene Fama, and other efficient market advocates. Dreman definitely has an axe, and spends lots of pages grinding it.(see E. Schneider's review)He's both methodical and convincing but boil it down and you get to the same bottom line as Benjamin Graham's "Mr. Market" metaphor and Buffett's superb essay, "The Super Investors of Graham and Doddsville": that the markets sometime price things in an inefficient way and buying value securities gives you an edge in the long run.If you are on board already with this line of thinking, other books will help you implement a practical strategy much faster and in more detail: a couple to recommend are Joel Greenblatt's "The Little Book the Beats the Market" and Seth Klarman's "Margin of Safety" - to his credit, Dreman says as much if you read long enough.If you are undecided on whether Value Investing works and want to hear a compelling well documented contemporary argument you probably won't find anything better.What you also won't find in Dreman is instructions on exactly HOW to pick these wonderful undervalued securities out, which is a big shortcoming in a book with the word "strategy" in the title. Aside from some hints that low P/Es and high dividends can be a sign of value you don't get much in the way of practical advice. The titles mentioned above are a better resource for you if practical methods of selecting value securities are what you are after.

Dremer provides a very insightful read on how think about Contrarian Investment Strategies and their applications in a portfolio. It is clear that he holds a high level of disdain for academic economists who espouse the primary portfolio management theories that pervade the industry. As a result, at times, he belabors his points about the weaknesses in their arguments. That aside, I found his thought process and strategy explanations easy to understand and appreciated the effort applied to explain tactical execution in a portfolio. For those that are serious about understanding broader points of views on how to invest, this is a must read in my opinion.

I was bummed out before I read this book- had just read A Random Walk Down Wall Street and had become a believer in a)the efficient market hypothesis and b)the inability to beat the market over the long term.Then comes this book. Chapter by chapter, Dreman dissects efficient market arguments that I saw as fact and showed that they were folly. Dreman states that the market is not efficient because investors are many times not rational. In fact, they are predictably irrational. And then Dreman gives data to prove this. He presents research to show that investing in a certain way allows you to beat the market.And he gives more research and data. And more, and more. Some people will complain that this is boring and overwhelming, but he does so to prove the validity of his methods. I've read many investment books, and usually an author will give his guidelines for picking stocks, with return numbers taken at a certain point in time, and holding stocks for a certain period, and maybe a few other stipulations. And in the end, I never trusted the author enough to invest any real money in his strategy.Not so with Dreman. The wealth of research convinced me that Dremans methods were not datamining and were not limited to certain market environments.Its the most imporant investing book I have read. Dremans method is very similiar to value investing preached by a number of other famous investors. The difference is that Dreman proves to you through his research that value investing works. Everybody addicted to Mad Money and Jim Cramer needs to give this book a peek.

Of all the investment books I have on my shelves, I would say that this book has been more influential than any other when it comes to investing in stocks.I have read it at least four times over the years and referenced back to it more than that. I will say that not all periods of time are best to be in the stock market. More recently precious metals have been better and that is where I have been instead of stocks. At some point it will be time to switch and be back in stocks and at that time I again will use what David Dreman promotes, buying undervalued out of favor stocks and holding them till they are more dearly valued. Has it worked for me? My 20 years of investing has allowed me to retire at 55 if that is any indication and I have already said that this book has been the most influential of any I have read, so yes, value investing has worked for me. I do not always invest in stocks, but when I do, they are value stocks based on what he teaches. The results have been favorable.Investing is an art rather than a science. Dreman gives one the information needed to help perfect the art of value investing. It is not a paint by numbers book or something that will guarantee success, but good fundamental education and a way of looking at investing. Everyone likes to buy things when they are on sale......except in the stock market where they seem to prefer to pay top price. I like to buy stocks when they are on sale. That is what contrarian investing is all about.There are periods of time when the stock market is not the best investment vehicle to be in. When it is the best place to be, the ideas in this book work, as long as a person has the mental discipline to allow them to work.