David Dreman Quotes

102 David Dreman Quotes (Dreman Value Management Quotes)

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Patience is a crucial but rare investment commodity.
David Dreman

I buy stocks when they are really battered.
David Dreman

[On owning Philip Morris in January 2000] You’ve got to have a Teflon bottom to take the heat on this stock.
David Dreman

Take advantage of the high rate of analyst forecast error by simply investing in out-of-favor stocks.
David Dreman

Positive and negative surprises affect ‘best’ and ‘worst’ stocks in a diametrically opposite manner.
David Dreman

Favored stocks underperform the market, while out-of-favor companies outperform the market, but the reappraisal often happens slowly, even glacially.
David Dreman

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.
David Dreman

It is one thing to have a powerful strategy; it’s another to execute it.
David Dreman

No matter how often you’ve been there or how much you’ve read, you can’t escape the fear.
David Dreman

[On Benjamin Graham] All fundamental analysis sprouts from the same tree…
David Dreman



Do not use market-timing or technical analysis. These techniques can only cost you money.
David Dreman

A good marketer and a good forecaster are different animals.
David Dreman

Do not make an investment decision based on correlations. All correlations in the market, whether real or illusory, will shift and soon disappear.
David Dreman

Industry laggards often tighten their belts, improve their management and find ways of increasing their market share or developing new products, which results in their continued outperformance of the market for long periods… Now when earnings surprise pleasantly the market applauds and awards higher prices.
David Dreman

[In late 1990 after Iraq invaded Kuwait] There was sheer panic, and that’s what we like.
David Dreman

All the statistics boil down to this: Too many investors are trying to find the next Home Depot. Too few are trying to find the next Chrysler… There are at least three-dozen academic studies showing the long-term superiority of value strategies.
David Dreman

[Benjamin] Graham’s observations that investors pay too much for trendy, fashionable stocks and too little for companies that are out-of-favor, was on the money… Why does this profitability discrepancy persist? Because emotion favors the premium-priced stocks. They are fashionable. They are hot. They make great cocktail party chatter. There is an impressive and growing body of evidence demonstrating that investors and speculators don’t necessarily learn from experience. Emotion overrides logic time after time.
David Dreman

How quickly investors flock to better-performing mutual funds, even though financial researchers have shown that the ‘hot’ funds in one time period very often turn out to be the poorest performers in another.
David Dreman

You should have a method to know that it is time to dive into the nearest bomb shelter, or better yet, evacuate from the market in an orderly fashion.
David Dreman

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.
David Dreman



People were buying art, collectibles, diamonds, precious metals – anything but stocks. All this, as hindsight tells us, just before the greatest bull market of the century began in the late summer of 1982.
David Dreman

It seemed so obvious. Like a miner who had struck gold, I believed the ‘claim jumpers’ would arrive in droves. The contrarian ideas would be scooped up immediately… Today I know nothing is further from the truth.
David Dreman

If contrarian strategies work so well, why aren’t they more widely followed?… It is not enough to have winning methods, we must be able to use them. It sounds almost simplistic, but it isn’t.
David Dreman

Most investors, whether professional or individual, even with the best of intentions, cannot follow through.
David Dreman

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.
David Dreman

It is hard to stay unaffected by psychological pressures, as I’ve too often found in free-falling markets. No matter how often you’ve been there or how much you’ve read, you can’t escape the fear.
David Dreman

Nobody beats the market, they say. Except for those of us who do.
David Dreman

Generations of investors have passed up sure things to buy losing investments.
David Dreman

The great majority of money managers have consistently lagged behind the market averages.
David Dreman

In the 1987 crash, the individual investor was scarcely involved. According to SEC records of the crash, almost all of the selling was done by professionals.
David Dreman



The market panic in the third quarter of 1990, following the Iraqi invasion of Kuwait, demonstrated once again that professional, no individual, investors were the largest, and often most desperate, sellers.
David Dreman

When advisors go one way, markets go the other.
David Dreman

Skeptics have cheerfully suggested that blindfolded chimpanzees heavily fortified with margaritas could outperform the experts by throwing darts at the stock pages.
David Dreman

Knowledge that professionals do not outperform the market has been widely known for a generation.
David Dreman

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.
David Dreman

Experts are often wrong – sometimes remarkably so.
David Dreman

The banker who counseled his client against investing in the Ford Motor Company was giving sage advice. The automobile was an unreliable and costly machine. Hundreds of manufacturers had already tried to introduce a car for the average man and failed. This included Henry Ford, who had already gone bankrupt twice… Viewed with the luxury of hindsight, many of the economic and financial forecasts look ridiculous, but the outcomes were far more difficult to project at the time.
David Dreman

Ingesting large amounts of investment information can lead to worse rather than better decisions.
David Dreman

People, when swamped by information, may select only a small portion of the total, and reach a dramatically different conclusion than what the entire data set would suggest.
David Dreman

[On one of the triggers to seek out value investing] Experts and average investors all agreed this market was ‘unique’. It wasn’t. Within months many of these sizzlers were down as much as 80% or 90%… I was luckier… I came out alive, but still left the better part of my gains on the table. This humbling experience increase my curiosity about markets.
David Dreman



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