David Dreman’s book, Contrarian Investment Strategies, was gospel to investors when it was first published in 1979. Investors had been decimated by markets going nowhere over the prior 10 years. Stock investors were ready for something new. Dreman had produced a lot of success as an investor and wanted to share his gospel of contrarian value investing.
The perfect picture of Dreman’s gospel comes from his opening chapter. He refers to the stock market as a casino with a green wing and a red wing. Looking into the green wing, “the atmosphere is unhurried, the blackjack tables are sparsely attended, and every player sits behind a mound of green and black chips.” As he points out, everything is so mundane that “you think you’ve come to the wrong place.” The next thing you notice is the players in the room, “they’re all winning.”
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