David Dreman
- Kirk
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- JenL_2
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» Kirk - One of my favorite Guru's
David Dreman is getting more press lately and for good reason. He is one of the guys I have learned from and whose style is one I try to use in my investing.| <img height=140 alt="Click to order" src="http://images.amazon.com/images/G/covers/0/68/481/350/0684813505.m.gif " width=92 align=left> | Contrarian Investment Strategies: The Next Generation: Beat the Market by Going Against the Crowd by David N. Dreman: / Hardcover / Published 1998 / 464 pages Kirk's Review: One of my favorite investment books! |
He runs a fund " Kemper-Dreman High Return Equity B (KDHBX)" http://biz.yahoo.com/p/k/kdhbx.html that is one of the very few funds that have beaten the S&P500 over ALL periods between 1 month and 5 years!
Unfortunatly, the fund is not cheap with a 2% annual expense ratio and the 5 yr return doesn't beat the S&P500 enough to cover the expense ratio. Of course, value was out of favor so this could be a fund of the future. Either way, I listen to what he has to say and I don't have to own his fund. He did poorly in 1999 but had an exceptional 2000 http://biz.yahoo.com/p/mp/k/kdhbx.html.
-- posted by Kirk
» Kirk - Forbs March 5, 2001 Online Issue
Read the story at the magazie. I just want to archive it here.I like how they have the prices of the stocks he recommends listed so you can easily compare his picks to results in the future.
http://www.forbes.com/forbes/2001/0305/1...
<img src=http://www.forbes.com/images/forbes/2001... width=168 height=210 align=left>
Tech Value
David Dreman, Forbes Magazine, 03.05.01
Is now the time to buy tech stocks? That may be a painful notion following the Nasdaq collapse. My answer is a qualified yes. Buy a partial position now in a handful of good techs, then purchase the rest later as the market heads lower, which it will. Don't be tempted to jump back in and invest willy-nilly. That's pretty much what Wall Street's overly optimistic analysts would have you do.
Don't listen to them. Never have so many lost so much on the advice of so few—apologies to Winston Churchill. Forget price and fundamentals, said the Mary Meekers (Morgan Stanley), Henry Blodgets (Merrill Lynch) and a supporting cast of other bigname analysts paid millions, who never met an Internet stock they didn't like.
Meeker, often called the "Queen of the Internet," earlier this year still recommended 11 Internet stocks as "outperform." They are down an average of 83% since last spring, but that doesn't in itself make them cheap. Blodget, a god in the Internet world since his prescient 1998 forecast of a big Amazon advance, is still plugging for the online retailer, which has taken a 77% dive from its December 1999 high. The undaunted Blodget's reasoning in touting this and other fallen tech angels: "The industry has passed its low point." In other words, blue skies ahead.
The bum steers this bunch of cheerleading analysts have foisted upon us notwithstanding, there's something useful in Blodget's sunny observation. While I think the tech bear market is far from over, I also know that when a tech recovery finally does come, investors in the right stocks will be rewarded handsomely.
Value managers aren't the Colonel Blimps that some techies would have you believe. We will buy tech stocks when the prices are right. If the fundamentals are solid, they belong in value portfolios.
Yet because more trouble lies ahead for tech, you should zero in on the quality tech stocks that definitely will be survivors. The trick is to go in slowly.
Here are a number that deserve serious consideration:
Apple Computer (nasdaq: AAPL - news - people) (19), which had been the comeback kid of the personal computer and laptop industries, stumbled in its first fiscal quarter (ended Dec. 31), losing 58 cents a share, including writeoffs. The cause was a slowdown in sales that triggered a high inventory buildup, as well as an increase in promotional spending to cut the backlog. While inventories are now close to normal levels, heavy competition is likely to put Apple in the red for the full year. However, with $1.7 billion in cash and a golden brand name, Apple should ride out its current problems and bounce back strongly.
Hewlett-Packard (nyse: HWP - news - people) (32), is a leading provider of computers and imaging services. The stock is down 53% from its 2000 high, also as a result of the downturn in the PC market. Hewlett, though, has a strong position in both high-end servers and printers that should tide it over. The stock presents good value at a trailing P/E of 18 and a dividend yield of 1%.
Intel (nasdaq: INTC - news - people) (34) is the leading manufacturer of semiconductors, another business the PC slowdown has not been kind to. The stock is off 60% from its 2000 high. In a world where chips go into ever more gadgets, Intel is justifiably confident of its future and is currently budgeting a record $7.5 billion on capital expenditures for the current year.
Despite strategic missteps, Lucent (nyse: LU - news - people) (14) remains a leading designer and manufacturer of telecommunication systems. Yes, the company's overoptimistic forecasts of 2000 revenue and earnings growth did not pan out. For a high-multiple stock the outcome was deadly: Lucent dropped from last year's high of 70 to 12 before rising to its current price. The company is likely to be in the red for 2001 before reestablishing an above-average growth rate, probably in 2002.
Vishay Intertech (nyse: VSH - news - people) (18) is the largest U.S. and European manufacturer of resistors, capacitors and inductors and a producer of discrete semiconductors. The company's markets weakened suddenly and sharply in late 2000, and the stock's price is down two-thirds from last May. Even so the company's earnings should come back powerfully from 2000. The stock is cheap at five times trailing earnings.
The bumpy six months ahead offer a good opportunity to be a value investor in techland. And a winner.
David Dreman is chairman of Dreman Value Management of Jersey City, N.J. His latest book is Contrarian Investment Strategies: The Next Generation. Find past columns at http://www.forbes.com/Dreman
-- posted by Kirk
» JenL_2 - Dreman a year ago
This post copied from the "BB Discussion" thread:Author: ACousins
Date: February 21, 2001 12:23 AM
Subject: Dreman a year ago
Kirk, I did a quick check through Dreman's picks this time last year in Forbes 2/21/00
http://www.forbes.com/forbes/2000/0221/6...
It would have been good to listen to him (instead of Bob) at that time. WLP (wellpoint) 68=>97, WM (Washington Mutual) 25 => 51, LIT (Litton) 42=>78. Some of the others aren't up much but I didn't see any that were down much either.
I think he would have gagged on the October bulletin as many, many other investors would have as well. What in the world were we thinking?
+++++++++++====
Latest ideas: AAPL, VSH, HWP, LU, INTC
"Never have so many lost so much on the advice of so few"....he was talking about Blodgett and Meeker (who did great for themselves while creaming their listeners' portfolios) but he could have been talking (had he cared) about Bob.
FWIW.
Hey, let's stick to those stable and cheap QQQs shall we?
-- posted by JenL_2
» Kirk - Re: Dreman a year ago
In response to message posted by ACousins:I just read the "print" version of this article while ruleing from the throne and it made me feel good that I am not the only one that has "good value picks" that continue lower once you identify a good price to buy them.
Of his picks, 2 are up and 3 are down and some of the down picks are off 20% so they must be "really good values" now.
http://finance.yahoo.com/q?s=AAPL%2C+VSH...
Actually, I own two of these stocks.... Don't own VSH and, WOW!, it has a PE of 5.2! That is below the bear market low PE of 7.0 that many stocks hit in 1974. I wonder why so cheap?
-- posted by Kirk
» Kirk - Dreman TRASHES Beta
Nice to see someone of clout echo my beliefs.http://www.forbes.com/columnists/forbes/...
Excerpt:
I don't disagree with the arithmetic behind beta, but I disagree strongly with what the statistic is supposed to mean. The theory is that high-beta stocks are riskier than low-beta ones but reward you with better returns over the long run.
Well, they don't deliver those rewards. Even Eugene Fama, one of the early apostles of the efficient market theory built around statistics like beta, renounced his faith in the yardstick. In a paper he coauthored with University of Chicago colleague Kenneth French in 1992, Fama found that no correlation existed between risk and return. In Fama's words: "Beta is dead."
What else is there? Well, there's a more direct measure of volatility—namely, standard deviation of daily (or weekly or monthly) returns. The standard deviation will tell you whether a stock jumps around a lot, but it scarcely gets at more fundamental matters of risk. Is there a risk that the industry you are investing in will not exist in ten years? Is there risk that you are caught up in a speculative bubble and are paying ten times what the stock is worth? Neither beta nor volatility comes close to capturing risks like these.
If you want to assess risk, think about the big picture. Think about things like these:
Read the article here http://www.forbes.com/columnists/forbes/...
-- posted by Kirk
» Kirk - Top Fund for past year
Congratulations to David Dreman and the crew at Kemper-Dreman High Return Fund (KDHAX)This is a classic value fund with David Dreman at the helm. It has a load, so I don't recommend it… but it DID do 41.63% the last 12 months outperforming the S&P500 by 64.27%.
For the past 10 years, his fund outperformed by 2.74% ANNUALIZED.
Fund Comparisons
Study that link… It should give you a good reason to know why I like David Dreman's techniques.
<img src=http://www2.marketwatch.com/charts/int-a... width=452 height=366>
I've been recommending his book for over three years here. His results for 1 yr and the last 10 years should tell you why.
-- posted by Kirk
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