Contrarian Investment Strategies: The Next Generation

David Dreman’s Contrarian Investment Strategies: The Next Generation is a definitive work on disciplined value investing rooted in behavioral finance. Building upon decades of empirical research and real-world portfolio management experience, Dreman demonstrates how systematic contrarian strategies consistently outperform market-driven and sentiment-based approaches over full market cycles.

Unlike speculative contrarianism, this book presents a data-driven framework grounded in long-term valuation metrics such as earnings, cash flow, dividends, and balance-sheet strength. Dreman explains how cognitive biases—overreaction, herding, loss aversion, and extrapolation errors—create persistent mispricings in equity markets, and how patient investors can exploit these inefficiencies with structured rules.

The book updates classic contrarian principles with modern datasets, post-bubble market behavior, and rigorous statistical validation. It examines why unpopular stocks with strong fundamentals outperform glamorous growth stocks, and how risk is often misunderstood rather than mismeasured. Dreman challenges conventional wisdom around volatility, beta, and analyst forecasts, replacing them with evidence-based decision models.

Rather than promoting market timing or short-term speculation, this work emphasizes portfolio construction, diversification, and behavioral discipline. Case studies, long-horizon performance data, and factor-based analysis reinforce the central thesis: disciplined contrarian investing remains one of the most reliable paths to superior long-term returns.

This book is an essential reference for serious investors seeking a rational, research-backed framework that thrives precisely when market emotions dominate price behavior.

✅ What You’ll Learn:

• How behavioral biases systematically distort market prices.
• Why low-expectation stocks outperform high-expectation stocks over time.
• The empirical foundations of contrarian value investing.
• How to construct portfolios using valuation-based selection criteria.
• Why traditional risk measures often misrepresent true investment risk.
• How to separate statistical evidence from market narratives and forecasts.
• Techniques for maintaining discipline during periods of market pessimism.

💡 Key Benefits:

• A research-driven investing framework validated across multiple decades.
• Clear separation between emotional contrarianism and disciplined contrarian strategy.
• Strong foundation in behavioral finance and empirical market studies.
• Practical guidance for long-term portfolio construction and risk control.
• A timeless methodology resilient across bull, bear, and sideways markets.

👤 Who This Book Is For:

• Long-term investors seeking evidence-based value strategies.
• Professionals interested in behavioral finance and market psychology.
• Portfolio managers and analysts looking to improve risk-adjusted returns.
• Serious retail investors who prefer discipline over speculation.

📚 Table of Contents:

• The Sure Thing Almost Nobody Plays
• From Technical Analysis to Astrology
• Bigger Game Ahead
• Dangerous Forecasts
• Would You Play a 1 in 50 Billion Shot?
• Nasty Surprises
• Contrarian Investment Strategies
• Boosting Portfolio Profits
• A New, Powerful Contrarian Approach
• Knowing Your Market Odds
• Profiting from Investor Overreaction
• Crisis Investing
• An Investment for All Seasons
• What Is Risk?
• Small Stocks, Nasdaq, and Other Market Pitfalls
• The Zany World of Rationality
• Beyond Efficient Markets

Contrarian Investment Strategies: The Next Generation By David Dreman