David Dreman (Trades, Portfolio), founder, chairman and CIO of Dreman Value Management, has a reputation for being a contrarian investor who takes a low P/E approach to his stock choices. He believes markets are not perfectly efficient and that investor actions are influenced by behavioral psychology.
Dreman’s preference is stocks in financial services, and many of his first-quarter buys fall in that category, but some do not. “When temptations to change course are at their worst,” the Dreman Value Management website proclaims, “we're at our best.” It looks good on paper, but how does it hold up in practice? Dreman made 23 new buys in the first quarter, which may prove instructive as time goes by. Continue Reading »