Contrarian Investment Strategies: The Psychological Edge



[BOOKS] ✭ Contrarian Investment Strategies: The Psychological Edge Author David Dreman – E17streets4all.co.uk In this major revision of his investment classic, one of the premier investment managers introduces vitally important new findings in psychology that show why most investment strategies are fatally fl In this major revision of his Strategies: The PDF/EPUB ¶ investment classic, one of the premier investment managers introduces vitally important new findings in psychology that show why most investment strategies are fatally flawed and his contrarian strategies are the best way to beat the marketThe need to switch to a new approach for investing has never been urgent The Crash ofrevealed in dramatic fashion that there are glaring flaws in the theory that underlies all of the prevailing Contrarian Investment MOBI :ò investment strategies efficient market theory This theory, and all of the most popular investing strategies, fail to account for major, systematic errors in human judgment that the powerful new research in psychology David Dreman introduces has revealed, such as emotional over reactions and a host of mental shortcuts in judgment that lead to wild over and under valuations of stocks, bonds, and commodities and to bubbles and crashes It also leads to horribly flawed assessments of Investment Strategies: The PDF É risk Dreman shows exactly how the new psychological findings definitively refute those strategies and reveals how his alternative contrarian strategies do a powerful job of accounting for them He shows readers how by being aware of these new findings, they can become saavy psychological investors, crash proofing their portfolios and earning market beating long term returns He also introduces a new theory of risk and substantially updates his core contrarian strategies with a number of highly effective methods for facing the most pressing challenges in the coming years, such as greatly increased volatility and the prospect of inflation This is every investor s essential guide to optimal investing.Contrarian Investment Strategies: The Psychological Edge

David Dreman is a noted investor, Strategies: The PDF/EPUB ¶ who founded and is the Chairman of Dreman Value Management, an investment company His father, Joseph Dreman, was a prominent trader on the Winnipeg Commodity Exchange for many years David Dreman graduated from the University of Manitoba in 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 Dreman was awarded a Doctor Contrarian Investment MOBI :ò of Laws Degree from the University of Manitoba in and is a member of the Board of Trustees of the universityDreman has published many scholarly articles and he has written four books Dreman also writes a column for Forbes Magazine Dreman is on the board of directors of the Institute of Behavioral Finance, publisher of the Journal of Behavioral Finance.

Contrarian Investment Strategies: The Psychological Edge
    Contrarian Investment Strategies: The Psychological Edge effective methods for facing the most pressing challenges in the coming years, such as greatly increased volatility and the prospect of inflation This is every investor s essential guide to optimal investing."/>
  • Hardcover
  • 496 pages
  • Contrarian Investment Strategies: The Psychological Edge
  • David Dreman
  • 15 August 2019
  • 0743297962

10 thoughts on “Contrarian Investment Strategies: The Psychological Edge

  1. says:

    Overall I liked this book The strategy is to invest in low P E companies for an industry It seemed like the first half of the book covered this and supported it with a great deal of research The second half of the book wasn t as good useful It was a bit long winded and several chapters areappropriately technical papers for an investing journal It felt like Dreman has a personal vendetta with many economists and kept repeating his points against their work I get it, you don t believe Overall I liked this book The strategy is to invest in low P E companies for an industry It seemed like the first half of the book covered this and supported it with a great deal of research The second half of the book wasn t as good useful It was a bit long winded and several chapters areappropriately technical papers for an investing journal It felt like Dreman has a personal vendetta with many economists and kept repeating his points against their work I get it, you don t believe efficient market theory These arguments didn t help me invest better so much after I already understood and agreed

  2. says:

    The book is fairly in depth in psychology of the markets But it does an excellent job of explanating the meat behind the theory The later parts of the books are easier to follow and lay out excellent examples of what the author is convening I highly recommend this book for any one in the financial services industry or the individual investor.

  3. says:

    A little lengthy and repetitive but GREAT information If I can verify the data from other sources, I ll definitely be putting this into practice ASAP

  4. says:

    During the summer InvestingByTheBooks will review some older books that we never got around to writing about although we think they are important Canadian born value investor David Dreman founded New Jersey based Dreman Value Management in 1977 after having served as a senior editor of Value Line Investment Service Apart from being his firm s president and chairman until 1997 Dreman has written several books on investing A number of these books, including this one, are continuations, updates During the summer InvestingByTheBooks will review some older books that we never got around to writing about although we think they are important Canadian born value investor David Dreman founded New Jersey based Dreman Value Management in 1977 after having served as a senior editor of Value Line Investment Service Apart from being his firm s president and chairman until 1997 Dreman has written several books on investing A number of these books, including this one, are continuations, updates and expansions of the author s Contrarian Investment Strategy from 1980 Dreman is often considered the dean of contrarian investing.The book contains three main themes investment psychology, criticism against the efficient market hypothesis EMH and value based investment advice Since the core of being contrarian is that investors overreact, this is to a large extent a book on behavioural finance seen from a practitioner s perspective Plenty of materials from the likes of later day luminaries such as Daniel Kahneman and Amos Twersky, Richard Thaler, Vernon Smith and Robert Shiller are presented In this Dreman, who published his first book on investment psychology in 1977, was truly before his time and he not only discusses individual biases among investors but also group dynamics, social validation and herding leading to wider market miss pricings.A number of common investment strategies and practices on the financial markets are presented and discarded in a factual but entertaining way Dreman presents academic evidence that technical analysis doesn t work but has no hope of convincing anyone of its followers As the price patterns are so complex that chartists often disagree on their meaning there is always lingering hope Growth investing is dismissed as human ability to forecast long term growth is close to non existent In this Dreman s discussion on the outside view and inside view is reminiscent of Michael Maboussin s 2012 bestseller The Success Equation Further central bankers and analysts are shown to deal with too complex areas for them to be forecasted with any accuracy Anyone s ability for market timing is thoroughly trashed Even the absolute rigidity of Benjamin Graham s screening methods receives some criticism.Compared to what consensus forecasts something unexpected always pops up The interesting thing is that these surprises affect different types of stocks differently Positive surprises only lead to minor outperformance for high PE stocks while low PE stocks soar Negative surprises leave low PE stocks almost unaffected while high PE stocks get thrashed Dreman shows that low multiples over time leads to higher returns and that this is not the consequence of higher risks.The investment strategy that the book presents is the same as Dreman Value Management display on their web site We invest in undervalued companies that exhibit strong fundamentals, above market dividend yields and historic earnings growth, which our analysis indicates will persist Specifically, investing among the lowest quintile PE stocks is advocated Dreman advises to sell stocks when their PE ratios rise to the average market level or when corporate fundamentals show long term degradation All strategies are in a great way backed up with academic evidence that they actually do work.The critique against EMH is justified but perhaps less necessary today than two decades ago Instead it is the early and deep insights in practical behavioural finance combined with how to use this in real life value investing that deserve the most credit in the text Paradoxically, the multitude of theoretical information in this 400 page book also obscures Dreman s personal investment experiences as one of the most successful investors of the 1980s and 1990s The text becomes a bit impersonal.This book is jam packed with insights and it was far ahead of its time Most investors still haven t caught up make sure you have

  5. says:

    The first 60% is solid investing advice.The last 40% isof a rant against regulators, investment banks and unfair trading relationships The diss track on Goldman is perhaps the most epic dis on any investment banks that I have ever read Good stuff Also, Dreman completely exposed Greenspan with absolute no mercy RIP, Greenspan It takes a lot of courage to go after ex Fed Chairman like that Respect The last chapter is devoted to international trade China and the outlook of America The first 60% is solid investing advice.The last 40% isof a rant against regulators, investment banks and unfair trading relationships The diss track on Goldman is perhaps the most epic dis on any investment banks that I have ever read Good stuff Also, Dreman completely exposed Greenspan with absolute no mercy RIP, Greenspan It takes a lot of courage to go after ex Fed Chairman like that Respect The last chapter is devoted to international trade China and the outlook of America in the coming decades To my surprise, Dreman almost laid out the ongoing China vs US trade war play by play in his book It is actually scary how accurate his call was on this issue from 2011 The book is to be honest a little bit on the long side If you are reading it for investing advice, you might as well stop at the 60% mark The last 40% is just his takes on different issues Very fascinating read

  6. says:

    Dreman presents ample statistical evidence for the effectiveness of contrarian strategies and condenses his derived insights into psychological guidelines to help ordinary mortals to overcome their built in intuitive inclinations and common sense but erroneous preconceptions This could have been achieved in aconcise fashion, but overall quite an enjoyable book.

  7. says:

    I am happy to have read this book derived from a booklist from Patrick O Shaunessy There are some key insights which have helped me to understand a few concepts that I would not have otherwise thought of If you are a value investor and in need of articulating a few turn of phrases, concepts, or market behaviors then this book may have what you are looking for.

  8. says:

    About 75% of this book is fluff, it seems a lot of books today don t have a good editor to cut out the junk.

  9. says:

    You already know most of what you read, if you are a value investor However reading the book will give you a restraint on what and when to involve in a trade.

  10. says:

    I agreed with much of this, but it didn t seem too relevatory

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