David Dreman

David Dreman studied psychology and finance and built his career as an investment manager and academic researcher. He founded Dreman Value Management, which manages assets using systematic contrarian and value-oriented strategies. He wrote "Contrarian Investment Strategies: The Classic Edition" and several follow-up volumes that provide extensive empirical evidence for the long-term outperformance of low-P/E, low price-to-book, and neglected stocks. His research framework argues that analysts and investors systematically overreact to positive and negative news, creating excessive optimism about high-P/E "glamour" stocks and excessive pessimism about low-P/E "value" stocks — and that patient investors who buy the neglected securities earn superior long-term returns. This work predates and complements the Fama-French factor research, providing a behavioural explanation for the value premium. Dreman was a Forbes magazine columnist for over 25 years, writing regular pieces on contrarian investing that reached a large retail investor audience. His integration of psychology and investing theory contributed to the early development of behavioural finance as an investment discipline.